Coalition labels critical minerals tax credits ‘unnecessary’

The Coalition has decried a planned production tax credit to get the nascent critical minerals processing sector off the ground as an example of the Government’s “undisciplined and unnecessary spending” that it would dump.

Shadow finance minister Jane Hume said the proposal would give miners tax breaks for work they were already doing.

The Government included a $13.7 billion production tax credit as the centrepiece of its future made in Australia policy in May’s budget.

The credit would apply to output from critical minerals processing after July 2027, for up to 10 years.

It was strongly backed by the Association of Mining and Exploration Companies, which represents smaller miners, and has also won support from the Chamber of Minerals and Energy WA although the peak body says there also need to be other measures such as common user facilities to help the sector.

Senator Hume said the production tax credits was part of $315 billion the Government had spent or committed that the Coalition did not back.

“If this government thinks that there isn’t undisciplined or unnecessary spending in their budgets, well they’re fooling themselves,” she told ABC’s Insiders on Sunday.

“There’s $13.7 billion of production tax credits going to miners to do what they were already doing.”

The Opposition frontbencher said there were “plenty of ways” to support critical minerals and rare earths industries, starting with repealing many of Labor’s industrial relations changes and reducing energy costs.

“This is the productivity agenda that the Coalition will take to the next election,” she said.

“That’s what miners are crying out for, not simply a production tax credits for what they’re already doing.”