Australia Challenges Inflation Reduction Act
TL/DR –
The Australian Federal Government has introduced the Future Made in Australia Act to compete with the US Government’s $520bn Inflation Reduction Act. The Prime Minister acknowledged that the local clean energy and manufacturing capabilities need to be developed as part of the act. The Inflation Reduction Act includes a $30bn advanced manufacturing production tax credit (AMPTC) that subsidises the downstream processing of critical minerals; a similar subsidy has been suggested for Australia to keep its mining and downstream industries globally competitive.
Australia Rivals US Government’s Inflation Reduction Act with New Policy
The Federal Government of Australia has enacted a policy to compete with the US Government’s Inflation Reduction Act, a $US520 billion initiative.
Prime Minister Announces Future Made in Australia Act
Prime Minister Anthony Albanese recently unveiled the Future Made in Australia Act, stressing the need for domestic clean energy and manufacturing development.
“Our Government will actively invest, partner, enable, not merely observe,” Albanese stated during his speech at the Queensland Media Club.
Guiding Principles of the Act
The Act’s guiding principles include large-scale investment, leveraging comparative advantages, and fostering economic success foundations, Albanese outlined.
“Our Government is boosting manufacturing, creating infrastructure and clean energy, and training in new technologies,” he added.
Future Made in Australia Act and Federal Budget
Albanese indicated that more details about the Future Made in Australia Act will be provided in the forthcoming Federal Budget.
US Inflation Reduction Act
The Inflation Reduction Act in the US includes a $US30 billion advanced manufacturing tax credit that supports the downstream processing of critical minerals.
Australia’s Production Tax Credit
An Association of Mining and Exploration Companies (AMEC) endorsed report by Mandala Partners proposed a similar production tax credit for Australia to ensure global competitiveness of its mining and downstream industries.
The suggestion was that Australian miners should receive a 10% tax reduction for producing refined critical mineral products, an idea presented to the Federal Government.
AMEC’s Reaction to New Act
The Future Made in Australia Act embodies AMEC’s efforts, according to AMEC CEO Warren Pearce. “The production tax credit is a proven method that rewards risk-taking in establishing new industries that yield significant government returns,” Pearce said in response to Albanese’s announcement.
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