Peter Dutton is more than happy to help billionaires, except one

A casual observer of parliament could easily assume that Peter Dutton has been reading Karl Marx since Labor revealed its budget plan to offer tax credits worth $13.7 billion for critical minerals and clean energy. The opposition leader pretends to line up with the proletariat to oppose the scheme as “billions of dollars for billionaires”.

Marx likened capitalists to vampires, so the Coalition attack lines seem mild by comparison. Even so, the thrust of Dutton’s complaint is that Australian billionaires are exploiting taxpayers to get a handout they do not need. He suddenly dislikes giving billionaires a helping hand.

A promotional video from Hancock Prospecting shows Opposition Leader Peter Dutton with Gina Rinehart and Roy Hill CEO Gerhard Veldsman last year.Credit: Hancock Prospecting

This will be news to voters who remember the Liberals and Nationals helping Australia’s richest woman, Gina Rinehart, and its richest man, Andrew Forrest, by repealing the Labor government’s mining tax in 2014. Nobody can be sure how much the big miners have saved in the years since that repeal, but it would make the tax credits look like spare change.

The Liberals still love their billionaires, of course. Dutton flew to Perth on February 29 to celebrate Rinehart’s birthday at a lavish party that night, even though this meant hours of travel for only a short time at the event. The Australian Financial Review revealed he was at Rinehart’s Roy Hill mine last November for a banquet, at which guests were served Bollinger and peach bellinis. To be fair, Dutton took commercial flights at his own expense.

Rinehart has befriended plenty of Liberals and Nationals over the years. That is no shock, given the way wealthy business figures have also cosied up to Labor leaders from Prime Minister Anthony Albanese down. Even the Greens have their wealthy patrons. And nobody matches the sheer volume of cash that mining magnate Clive Palmer gives his own party.

Even so, the friendship from Rinehart for the Liberals and Nationals has been on a mighty scale. She provided free travel and accommodation to Coalition MPs such as Barnaby Joyce and Scott Morrison before they gained ministries in the Abbott government in 2013, and in 2011 she flew Liberal deputy leader Julie Bishop to India to attend a wedding.

This influence counts. One of Australia’s biggest deals in critical minerals, a lithium mine and refinery called the Nolans project in the Northern Territory, could one day deliver a big pay-off to Rinehart, who is an investor in the developer, Arafura Resources. The project is being backed with $840 million in federal loans.

Labor announced the support last month, but the funding had its genesis in the Coalition’s time in power. Arafura says it gained in-principle support from two federal agencies, Export Finance Australia and the Northern Australia Infrastructure Facility, in May and June 2021. Rinehart bought into Arafura at the end of 2022. The Coalition cleared the way for the financial aid, then Labor sealed the deal.

Surprise! If there are billions for billionaires in this new mining boom, the Liberals and Nationals have helped to make them happen.

Everyone in parliament knows that the Coalition jibes are petty and personal. They have one billionaire, and one only, in their sights: Forrest, the executive chairman at iron ore company Fortescue and a big investor in wind farms. He has been lobbying the government hard to get a subsidy for hydrogen. For Dutton and his colleagues, however, his real crime is that he mocks their nuclear energy plan.

The Liberals used to like Forrest, but things turned sour when he started investing in renewable energy. That, apparently, is anathema. Worse, he dismissed the Coalition nuclear plan just a few months ago. He called it an idea from a “fairy godmother”. That grates so much on the Liberals that some of them yell out his name in question time.

Investors, however, seem to like the Labor tax credits. The main players in critical minerals gained a small boost in their share prices on the day after the budget. Companies such as Arafura Rare Earths and Liontown Resources were suddenly worth a little bit more for their owners, including Rinehart. There were similar gains for Lynas, Mineral Resources, Northern Minerals, Pilbara Minerals and Vanadium Resources.

Most of these companies are small players in a big arena. Northern Minerals has a market capitalisation of only $207 million. Arafura is worth $450 million. Liontown is worth more, at $3.4 billion, and Lynas is worth about $6.4 billion. Compare that with BHP, which is worth $223 billion. That puts this policy in perspective. The projects are risky and receive help only if they produce results.

Dutton can extract some political wins from this budget plan. A vote to oppose the $13.7 billion tax credits, and possibly the full $22.7 billion in the Future Made In Australia, could give the Coalition a notional budget saving. Dutton and his shadow cabinet may choose to put that towards their nuclear plan.

When Angus Taylor was asked about nuclear subsidies on ABC Radio National on Wednesday morning, he said nuclear power would have to get a direct return on capital. He did not rule out federal assistance in some form.

There is a serious argument against the tax credits, based on the economic case for a free market without subsidies – not for Rinehart, not for Forrest, not for anyone. But that is not where the Coalition has planted its flag. It has no economic blueprint to wind back government assistance, shrink the public sector and leave big business to look after itself. As the Coalition showed when it was last in power, it is more than willing to shower corporate Australia with loans and grants. It even put up a $175 million loan for a coal mine.

The argument about tax credits has largely ignored one of the key factors: national security. Australia is trying to build up a critical minerals sector that can avoid being swamped by China. The financial support has arrived after years of talks between Australia and the United States on critical minerals – starting with a pact between then prime minister Scott Morrison and then president Donald Trump at the White House in October 2019.

The fake debate about billionaires is another sign of the shallowness of so much talk about the budget. The tax credits will make a risky venture slightly less risky, with a profit for anyone prepared to take the risk. If that helps create more billionaires, who are the Liberals to complain? One day, those billionaires might even have some spare seats on their private jets. Bring on the Bollinger.

David Crowe is chief political correspondent.