Future Made in Australia tax breaks introduced

The federal government has scheduled to introduce the Future Made in Australia (Production Tax Credit and Other Measures) Bill 2024 to Parliament today, with its focus the global net zero transformation.

The legislation implements the government’s production tax incentives for renewable hydrogen and critical minerals, and also expand the role of Indigenous Business Australia.

The legislation establishes two tax incentives that apply for up to 10 years per project:

• A Hydrogen Production Tax Incentive worth $2 per kilogram of renewable hydrogen produced between 2027–2028 and 2039–40
• And a Critical Minerals Production Tax Incentive worth ten per cent of relevant processing and refining costs for Australia’s 31 critical minerals, for critical minerals processed and refined between 2027–28 and 2039–40.

The incentives will only be provided once projects are up and running, producing hydrogen or processing critical minerals used in products like wind turbines, solar panels and electric vehicles.

Recipients of the production tax incentives will also be required to deliver benefits relating to the six Community Benefit Principles included in the overarching Future Made in Australia Bill.

According to a government statement the bill is all about seizing the vast economic and industrial opportunities from the global net zero transformation and strengthening economic resilience.

“This bill will help unlock private sector investment to build a stronger, more diversified and more resilient economy powered by renewable energy that creates secure, well-paid jobs around the country.

“It’s also about making sure the benefits from the investment flow to local workers, industries and communities around Australia.”

The government said the legislation provided industry the clarity and certainty it needs to invest in Australian renewable hydrogen and critical minerals projects with confidence.

“The government recognises that the best opportunities for Australia and its people lie at the intersection of industry, energy, resources, skills and our ability to attract and deploy investment.”

Further reading:
70 economists back Future made in Australia, blast Productivity Commission
Future Made in Australia will boost sustainable growth and create jobs as far as it goes, but it doesn’t go far enough

Picture: Senator Tim Ayres, Assistant Minister for Trade and Assistant Minister for a Future Made In Australia