Submission to the Senate Inquiry into the Future Made in Australia (Production Tax Credits and Other Measures) Bill 2024

16 January 2025

Well-designed production tax incentives (PTls) can help provide a foundation for Australia to be a competitive destination for hydrogen production and critical minerals processing and refining.

The eligibility criteria and design of PTls must not be so restrictive as to limit support for projects that otherwise meet the policy objectives, or to prompt investment going overseas. Many potentially eligible projects will naturally deliver benefits across local communities and supply chains, and so it follows that the Community Benefit Principles must not be so narrowly or rigidly defined as to undermine the intent of the PTls. To that extent, their weighting in determining eligibility should be minimal, with the fundamental criterion for support therefore being the extent to which government assistance will help turn around our current poor productivity performance by making Australian industry more competitive and our nation more attractive for investment.

It is important to be aware that while the BCA does not object to community benefit principles in the broad sense, they risk increasing costs, duplicating other policies already in place, and offsetting competitive gains otherwise achieved through the PTls. Recent revelations regarding the alleged criminal behaviour by the Construction, Forestry and Maritime Employees Union mean it will also be essential that any Community Benefit Principles do not create an environment that enables such conduct to flourish.

The proposed dual agency model for administration of the schemes is appropriate but will be inherently complex and costly to administer and comply with - as demonstrated by the Research and Development Tax Incentive. It will therefore be critical to have settings in place to ensure the PTls are administered effectively, consistently, predictably and efficiently. This includes by clearly outlining administrator roles and responsibilities and information sharing arrangements, publishing timely and clear guidance material, and establishing a timely and efficient dispute resolution process.

Read our full submission here.

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