7 June 2024
Topics: critical minerals tax credits, slow GDP figures
E&OE
Tom Connell:
Well, plenty of reaction to the budget. Probably the most interesting contest has been the Opposition’s decision to effectively oppose what is going to be tax credits for critical minerals. We all know we’ll need a lot more critical minerals in the future, in particular for renewable energy and batteries. Joining me now, Shadow Environment Minister Jonathon Duniam. Thank you for your time. We know we’re going to a lot of batteries in our future, our homes, our cars, big ones around as well. This idea from Labor processing them here in Australia, that would that add to the stockpile wouldn’t it? That would be a benefit for this sort of future.
Senator Duniam:
Well, the idea put forward by Labor to apply this tax credit for this particular sector only deals with that particular sector. It’s not something that has a benefit more broadly than that. I mean when the Productivity Commission, with Labor’s own picked head of the Productivity Commission is describing this as a policy that picks winners and entrenches such an approach as a bad one, that is something to be concerned about. There are better ways of incentivising growth in a particular sector, or indeed more broadly and providing tax credits in such a narrow way is not something we think is a good use of taxpayers money. Again, let’s remind your viewers, it’s their money, it’s your money Tom, that’s being handed over here to facilitate this growth and we think there are better ways.
Tom Connell:
Let’s step through it, I’m interested in what part of this I put forward that you would disagree with, you know, feel free to disagree with the crux of what I’m saying, if you like. So we’re already mining this stuff, that’s happening in Australia, for the vast majority of circumstances it’s not being processed here. That seems to be because it’s not as economic here compared to overseas. So these aren’t subsidies handed out, but once they’re processed tax credits, meaning more jobs here, they’ll actually get more revenue because we’re processing stuff for the first time and there’ll be more money for taxpayers because while there’s tax credits, there’s more activity. What am I getting wrong there?
Senator Duniam:
Well, you talk about it being uneconomic to do business here and I think about a million examples over the history of our nation where we’ve had to compete fiercely to attract value-add industries to Australia. Two key inputs that have gone up in cost over time that make us unattractive are the cost of energy – something this Government has not actually done anything about – hence the taxpayer-funded power bill offsets that people are getting, their $300 for households and $325 for businesses won’t touch the sides , and of course, inflexible IR laws making it very difficult for businesses to cater to their needs in a cost effective way. We price ourselves out of the market. So, to then take taxpayers money and churn it back into these businesses at a cost to taxpayers is not the answer here. There are better ways of doing it and addressing high energy costs… (interrupts)
Tom Connell:
As I said, the costs, the cost element, I mean if the activity is not happening then it does, it’s a tax cost but it’s a net benefit to revenue so when you mention those two elements, ok so energy yeah, it’s been going up a lot and that is a big reason, but we can’t change that overnight. We want to get you know this stuff going pretty quickly, and then IR laws well they’ve only just come in recently, it’s not like all the critical minerals are getting processed and suddenly new IR laws came into place. So, wouldn’t this idea still be a good idea? You can’t fix energy prices overnight, can you?
Senator Duniam:
Well, taxpayers money is a finite resource, Tom, and I think if we’re choosing between ways to assist households and businesses to try and make ends meet, there are better ways of doing it. Yes, these IR laws are only fresh off the printer but can I say though, if businesses are making decisions in boardrooms overseas, and many of these companies will be multinationals, they’ll be looking at things like our IR laws and whether that is a cost effective investment to put their money here with our energy costs, our decentralised country, and you know, getting goods to market etc and also the cost of labour, so those things do get factored in and addressing where government can those cost impediments to doing business would not cost taxpayers any money at all. Providing certainly around coal and gas existing generation would indeed assist in bringing down the cost of energy, but the government won’t do that and their IR laws we’ve already discussed are having an impact on businesses capacity to employ as they need.
Tom Connell:
Ok, the point of them as I said was it hasn’t been stopping critical minerals processing because they’re only just coming into play, anyway. Let me ask you this finally on the economy, a lot of talk around after the GDP figures, so if we do manage to avoid a recession, this is all in the lead up to the next election, and inflation that stays within the target bandwidth and unemployment hasn’t shot up, if that happens, will you give Labor some credit on a soft landing?
Senator Duniam:
Well, look I will always give credit where credit is due but I mean on any analysis this near miss of things, especially when avoiding a recession is because of the artificial prop up of migration numbers and the stimulus that provides to the economy, I don’t think that’s worth the bouquet. Again, as many of my colleagues have said and I dare say, many of your viewers would agree, you know, that one question that we’re going to be asking people, ‘are you better or worse off than you were when this government came to power’, and that’s got to be the key metrics. So, we can talk about all sorts of stats and numbers and economic indicators… (interrupts)
Tom Connell:
So, there’s no way Labor will pass. You just said an impossible test for Labor, they’ll never pass it no matter what happens. By election day you’ll say ‘no good for the economy’.
Senator Duniam:
Well, it wasn’t us that set that test, it was Anthony Albanese who 97 times said he’d bring power bills down by $275 a year by next year. That’s a test he set… (interrupts)
Tom Connell:
Yeah, they’ll say all that, fair enough. But the other stuff I mentioned.
Senator Duniam:
Well look, I mean if the economy goes gangbusters and there are great things happening and you know people are making decisions to invest in Australia and more jobs are coming here, of course credit will be given where it’s due. But I think in the scenario you’ve put to me, I don’t think there’ll be many bouquets coming from me because this country will not be better off, nor will taxpayers.
Tom Connell:
Ok, alright. Gangbusters is the parameter. Maybe hard to define. We’ll see if we can seek to do that. Jonathon Duniam, thank you.
Senator Duniam:
Thanks Tom.