Battery minerals, Commodities, Exploration/Development, Finance, News

Australia to rival Inflation Reduction Act

Inflation Reduction Act

Following an extended push from industry bodies, the Federal Government has introduced a policy to rival the US Government’s $US520 billion Inflation Reduction Act.

Prime Minister Anthony Albanese announced the Future Made in Australia Act this week, acknowledging the importance of building local clean energy and manufacturing capability.

“In this time of transformative opportunity, our Government will not be an observer or a spectator – we will be a participant, a partner, an investor and enabler,” Albanese said in an address to the Queensland Media Club.

“We will be guided by three principles. First, we need to act and invest at scale. Second, we need to be more assertive in capitalising on our comparative advantages and building sovereign capability in areas of national interest.

“Thirdly, we will continue to strengthen and invest in the foundations of economic success.”

Albanese said it is an important time for the Government to invest in the critical manufacturing arm of the country.

“Our Government is investing in manufacturing to make more things here,” he said. “We’re building the infrastructure and clean energy to power new growth. We’re training people in new technologies.

“A clear path to investing in Australia, in Queensland, in hydrogen, green metals and advanced manufacturing. And the right skills, supply chains and processes to get projects up and going and see this investment realise a return.”

Albanese suggested more details would be revealed about the Future Made in Australia Act in next month’s Federal Budget.

The Inflation Reduction Act (IRA) includes a $US30 billion advanced manufacturing production tax credit (AMPTC) that subsidises the downstream processing of critical minerals.

Back in February, a report commissioned by the Association of Mining and Exploration Companies (AMEC) and prepared by Mandala Partners suggested Australia should also introduce its own production tax credit (PTC) if it’s mining and downstream industries are to remain globally competitive.

It was suggested Australian miners should receive 10 per cent off their tax bill for the production of refined critical mineral products. This idea was tabled with the Federal Government.

The Future Made in Australia Act is a materialisation of AMEC’s efforts.

“A PTC has strong industry support and the Prime Minister’s speech shows a recognition that there is a role for government, to enable Australia’s success in a highly competitive global environment,” AMEC chief executive officer Warren Pearce said in response to Albanese’s announcement.

“The PTC is a proven mechanism that would reward those willing to take a risk in establishing new and costly industries, that if successful, will deliver a significant return on investment for the government.”

Subscribe to Australian Resources & Investment and receive the latest news on commodity prices, resource developments, executive movements and more.

Previous ArticleNext Article
Send this to a friend