Budget gifts billions to WA tycoons in bid to shore up Albanese government’s future
Perth-based billionaires are set to be biggest winners from the federal budget, as Anthony Albanese lavishes extraordinary amounts of taxpayer money on Western Australia – the state that delivered him the 2022 election.
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Perth-based billionaires are set to be biggest winners from the federal budget, as Anthony Albanese lavishes extraordinary amounts of taxpayer money on Western Australia – the state that delivered him the 2022 election.
On Tuesday night Labor committed nearly $14 billion to subsidising critical minerals and green hydrogen, thereby further inflating the WA economy that revolves around the state’s billionaires including Mineral Resources founder Chris Ellison, the nation’s wealthiest person, Gina Rinehart, and Andrew Forrest.
The subsidies are the newest and biggest-ticket items in the ALP’s Future Made in Australia policy, under which as much as $1bn has already been committed to propping up production of locally made solar panels.
The early frontrunner for funds under the solar scheme is an exploratory venture between two companies both backed by rich-list fixture Mike Cannon-Brookes, who, is an exception to the rule, does not live in Perth.
The $7bn critical minerals subsidy is a triumph for federal resources minister, Perth MP Madeleine King, and the Association of Mining and Exploration Companies (AMEC), which is also based in the WA capital.
For two years, lithium miners such as MinRes have been pushing for a tax credit. The $15bn company and other AMEC members bankrolled a study that went to federal Treasury at the start of the year and is understood to have been highly influential.
From 2027-28, lithium hydroxide makers will be able to get 10 per cent of their production costs as a tax credit.
At the moment, MinRes only digs up rock containing lithium, but it wants to get into making lithium hydroxide, which is used in electric vehicle batteries.
“This is sensible policy that will make Australia more competitive,” a MinRes spokesman said.
In 2022, WA was the world’s largest producer of lithium, the third-largest producer of rare earths, and a top-five producer of battery-grade nickel.
At the next election, due within a year, the Albanese government needs to defend four WA seats it won from the Coalition in 2022.
To make that political task easier, the west is now being promised billions more in taxpayer funds on top of its already overly generous slice of GST revenue.
Mrs Rinehart has substantial interests in critical minerals, via companies including Lynas and Liontown. Labor has also directly supported her Arafura rare earths project in the NT with an $840 million package of loans and grants.
Arguably the happiest person in all of this though is her fellow WA billionaire Mr Forrest.
His private mining company Wyloo wins from the critical minerals tax rebate.
Wyloo CEO Luca Giacovazzi said: “We thank Minister Madeleine King and Treasurer Jim Chalmers for their efforts in supporting Australia’s critical minerals sector.”
And Mr Forrest’s public green energy and metals business Fortescue scores under the other Future Made in Australia incentive – a $2 payment per kilogram of green hydrogen.
Fortescue is trialling green hydrogen technology for use in its own iron ore operations in WA.
Mr Forrest said the PM “and his government had a one-shot-in-the-barrel opportunity to ensure Australia fulfilled its potential to become the Saudi Arabia of energy production.
Through the $2/kg tax credit for green hydrogen production, the government has seized this opportunity for the Australian people.”
The $6.7bn taxpayer subsidy will make a huge difference to other projects that have costs of $6 to $10/kg in a market only willing to pay $3 to 7/kg.
The federal Opposition has said it will not support legislation to create the subsidies, both of which are ideas borrowed from the Biden administration’s net-zero focused Inflation Reduction Act.
In parliament on Wednesday, Liberal leader Peter Dutton accused the PM of “giving billions of dollars to billionaires.”
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