Resources tax breaks opens rift between WA and federal Liberals

WA Liberal leader Libby Mettam has vowed to have a chat with her federal counterparts after a rift emerged over tax breaks for green hydrogen and critical minerals companies in the Albanese government’s federal budget.

Shadow treasurer Angus Taylor lashed the $14 billion worth of incentives on Wednesday, telling ABC it amounted to “handing out billions to billionaires”.

Shadow treasurer Angus Taylor.Credit: Alex Ellinghausen

Those comments put Mettam in an awkward position as a political leader in a resources-reliant state which would benefit from the tax measures.

It has also opened up both levels of the party to criticism from Labor, with WA Premier Roger Cook describing Taylor as “anti-Western Australian”.

Taylor said the policy was not a good use of taxpayer money and would not work.

“This is not how you get manufacturing and resources sectors really firing,” he said.

“We know that from history. It is a bizarre way to try to get those sectors going.”

Later on Wednesday, Mettam confirmed her support for the incentives and said her party often had differences of opinion, but said she would speak to Taylor and her other federal colleagues.

However, she would not reveal when she would reach out to them, what she would say, or whether Taylor consulted her team before criticising the incentives.

“We will always stand up for Western Australia, and we will support this measure,” Mettam said.

“It’s something that I will raise with my federal colleagues. We are committed to jobs and industry and new industries in Western Australia and that is my position.

“My commitment has been consistent in relation to this matter, and I’ll leave my comments there.”

The rift comes at a time when the WA Liberals have gone to lengths to point out the chasm of policy differences between state and federal Labor on the issue of sheep live export.

The tax credits have the backing of government and industry in WA, and Cook said he couldn’t believe the Coalition did not support the measures.

“I’m staggered that the Liberal opposition would oppose the production tax credit,” he said.

“It’s about creating jobs, it’s about continuing to make sure that we make stuff in Australia, and, quite frankly, it’s anti-Western Australian.

“The local opposition have to now explain why they are opposing the key feature of his budget which will benefit WA.”

Asked whether it had opened up an election issue for the Coalition in WA, Cook said West Australians understood the importance of the resources industry.

From July 1, 2027, companies will be offered a refundable tax offset of 10 per cent for the costs of processing the 31 critical minerals currently listed in Australia, including lithium.

This will cost the Commonwealth $7 billion in foregone revenue over the next decade.

From that same date, the government will also offer a $2 per kilo tax credit for green hydrogen production, expected to cost Australians $6.7 billion in foregone revenue.

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