Federal Government close to deal to pass production tax credits as industry urges action

WA’s resources industry has made a fresh plea for crucial production tax credits legislation to be passed to ensure Australia can be competitive — and capitalise on global uncertainty.

It has also suggested changes in the US under new president Donald Trump to green energy production and critical minerals would mean Australia could benefit from a clear political stance.

The Federal Government is close to securing a deal with the Greens over production tax credits for critical minerals processing, with a vote tipped for early next week.

But the sector — set to be a major beneficiary of the $17.5 billion plan — warns any delay could hurt project plans and financing, especially if it ends up pushed back beyond the Federal election.

International Graphite’s chief executive Andrew Worland says the tax rebate against operating costs will make operations here “significantly more competitive against overseas producers” and give the company better capability to raise financing.

“Every little bit of support in this area that makes us more competitive against foreign competition is welcomed,” he told The West Australian.

“Any delay that would impact the implementation date would be the concern for us and our capability of funding projects on the terms that are most attractive for ourselves and investors.

“So the sooner it is passed, and the sooner . . . the effective date is set in stone better for all parties.”

Resources Minister Madeleine King said the tax breaks for miners were essential to build the new industry with the accompanying jobs and national security benefits.

“In opposing this bill, (Liberal frontbencher) Michaelia Cash is siding with east coast latte sippers against Western Australians,” she told The West.

The Coalition has opposed the policy from the day it was announced, decrying it as “billions for billionaires”, but has not proposed any alternative to industry.

Warren Pearce, head of the Association of Mining and Exploration Companies which worked to develop the tax incentives, said this was disappointing, and supporting Australia’s critical minerals processing industry was even more vital since Mr Trump’s victory.

“What’s happening with the election of President Trump and his decision to start withholding payments on the Inflation Reduction Act means there’s suddenly a real opportunity to start attracting investment that might have otherwise gone to the United States,” he told The West Australian.

“Once it’s passed in legislation, the reality is every investor, every company, knows if they do the right thing and produce a processed critical mineral, they’ll get the incentive… (It) is saying, if you come to Australia, your costs will be reduced because there’s a guarantee written in legislation.”

Sources close to the negotiations on both sides were confident the Government would be able to strike a deal with the Greens for Senate support, giving business the certainty it needed.

Greens leader Adam Bandt said negotiations were continuing but his party supported the move in principle and was hopeful of passing the legislation this fortnight.

“It would be a degree of support (for) the critical minerals in Western Australia, Queensland and other parts of the country,” he said.

“We support the principle of the bill, we want to make sure that it does what it says on the tin and is going to deliver and does provide support in the way that is needed … But our approach would be we’d like to see action.”

Independent senator David Pocock also backs the bill.

Fellow crossbenchers Fatima Payman, Jacqui Lambie and Tammy Tyrrell supported the overarching Future Made in Australia legislation when it passed in November, giving the Government confidence they will similarly back this component.