Speaker –
I move that this Bill be now read a second time.
Today I am proud to introduce the Future Made in Australia (Production Tax Credits and Other Measures) Bill 2024.
This Bill is another major step in implementing the Albanese Labor government’s Future Made in Australia agenda, to deliver our country’s next generation of prosperity.
The net zero transformation is a golden opportunity for Australia.
We have been dealt the most incredible set of cards as a country to make ourselves the primary beneficiaries of the net zero economy.
We have a unique combination of geological, meteorological, geographical and geopolitical advantages.
And we know it would be an egregious breach of our generational responsibilities as a government if we didn’t play this winning hand.
This legislation is part of how we make the most of that opportunity – but it’s not the only part.
It builds on the 2 other pieces of Future Made in Australia legislation that have already passed this House and will embed into law the disciplined and rigorous approach that will govern this agenda.
It also builds on the significant and substantial progress we’ve made in delivering cleaner and cheaper energy since coming to office:
Unlocking $67 billion in private investment through the Capacity Investment Scheme, introducing a new vehicle fuel efficiency standard, providing low‑cost finance for household energy upgrades and reforming the safeguard mechanism.
Speaker –
Our Future Made in Australia agenda is all about making Australia indispensable to the global net zero transformation.
It recognises we’ll do that by attracting and enabling private investment – not replacing it.
Well‑targeted public investment is an important and substantial part of our plan.
But it is only a sliver of the private investment needed to transform our economy.
The most important role for public investment will be to help unlock the vast amount of private sector investment we will need to deploy –
An additional $225 billion by 2050 to transition the energy system and realise net zero opportunities in heavy industries, by one estimate.
That’s what this legislation and our production tax credits are all about.
This Bill does 3 main things:
Firstly, it will establish a hydrogen tax incentive worth $2 for every kilogram of renewable hydrogen produced by eligible projects that have reached a final investment decision before July 2030.
Secondly, it will establish a critical minerals tax incentive worth 10 per cent of the value of relevant mineral processing and refining costs for the production of any of Australia’s 31 critical minerals.
Both incentives apply for hydrogen or minerals produced between 2027–28 and 2039–40 and for up to 10 years, per project.
Thirdly, it will expand the role and remit of Indigenous Business Australia to help support more investment into Indigenous communities.
These communities have some of the most to gain from the transition to net zero – and this legislation will help unlock these benefits.
Speaker –
Renewable hydrogen and critical minerals are both essential to the world’s path to decarbonisation.
The government sees them playing a central role in Australia’s net zero future and these tax incentives make that clear.
This legislation provides industry the clarity and certainty it needs to invest in Australian renewable hydrogen and critical minerals projects with confidence.
But it is not a free‑for‑all.
The incentive is only provided once projects are up and running, producing hydrogen, or processed critical minerals for things like wind turbines, solar panels and electric vehicles.
Speaker –
Renewable hydrogen will open the door to create green metals, like iron, steel, alumina and aluminium, and decarbonise other parts of industrial supply chains.
Our world class renewable energy resources make us one of the best placed countries globally to produce green hydrogen at internationally competitive prices.
Some of our biggest trading partners have already expressed a significant appetite for importing renewable hydrogen from us, including through trade in products that are produced from green hydrogen like green ammonia or green metals.
Our unique combination of geology, meteorology and geography all play a role here.
The tax incentive enabled by this legislation will complement our Hydrogen Headstart program.
Hydrogen Headstart is helping early movers invest in the industry’s development, and these tax changes provide broader support to projects that reach the production stage.
Critical minerals are the building‑blocks for our clean energy future.
From manufacturing to transport, and medicine to telecommunications, so many industries rely on critical minerals to function.
Some scenarios estimate global demand for critical minerals will increase by around 350 per cent by 2040 to reach net zero emissions by 2050.
Australia is in a strong position to supply these minerals, with some of the world’s largest reserves of lithium, cobalt and rare earths.
But we don’t intend on just digging them up and shipping them overseas.
We want to capture more value onshore by refining and processing the minerals here and that’s what this tax change will incentivise.
It will encourage more Australian critical mineral companies to create more value on our shores and create more diverse, resilient and sustainable global supply chains.
It will help critical minerals miners become critical minerals refiners and processors.
Speaker,
The final part of the Bill expands the role and remit of Indigenous Business Australia by amending the Aboriginal and Torres Strait Islander Act 2005.
We know that Indigenous communities have some of the most to gain from the transition to net zero, and the growth in our renewable hydrogen and critical minerals industries.
The community benefit principles in our other Future Made in Australia legislation are about ensuring those benefits flow to those communities.
And we want to make sure they’re well‑placed and well‑prepared to embrace the benefits – that’s what this change is about.
Indigenous Business Australia promotes First Nations economic self‑determination through lending and investment in areas like home ownership and business support.
This change will allow Indigenous Business Australia to raise capital to support investment in more First Nations individuals, communities and businesses around the country.
It will support more First Nations people to start, grow and sustain businesses, purchase homes, and invest in commercial ventures.
This change will give Indigenous Business Australia the flexibility to pursue a range of opportunities with government and private partners to support First Nations economic empowerment.
Speaker,
This Bill has been developed through a detailed and comprehensive consultation process.
We released a public consultation paper on the design of the production tax incentives in June.
It attracted more than 130 submissions from industry groups, companies and community organisations.
We took their feedback seriously and worked through it methodically and diligently – taking those views into account in the final design of the legislation.
I’d like to take this moment in the House to thank everybody for their time and contributions to this Bill.
I’d also like to particularly acknowledge the Minister for Climate Change and Energy and the Minister for Resources for being 2 of the driving forces behind the production tax incentives, along with the Minister for Industry and Science and the Assistant Minister for a Future Made in Australia for their ongoing and substantial role in the entire Future Made in Australia agenda.
I’d like to acknowledge the former Minister for Indigenous Australians, Linda Burney, for her important and tireless work on our changes to Indigenous Business Australia, now being taken forward so ably by the current Minister, Senator Malarndirri McCarthy.
Speaker,
Our production tax incentives are the biggest part of our $22.7 billion Budget investment in the Future Made in Australia agenda.
But it’s only a fraction of what we need.
Public investment will show us the path to a Future Made in Australia but private capital will pave the way.
That’s why our agenda is an investment strategy and a growth strategy.
To provide investors with the clarity, certainty and the cooperation they need.
To build and grow new industries in Australia, and make sure those benefits flow to communities all over the country.
The time to act is now.
The world is changing with or without Australia.
The golden opportunity in front of us will start shrinking if we take any longer.
To seize the vast economic and industrial opportunities which come from the global energy transformation to net zero we need to engage and invest not protect and retreat.
And that’s exactly what this legislation does.
Full details of the measure are contained in the Explanatory Memorandum.