Dear Committee Secretary
Hydrogen and Future Made in Australia are economic losers that shouldn’t be pursued
The purpose of this letter is to provide research and analysis conducted by the Institute of Public Affairs (the IPA) to the Senate Economics Legislation Committee (the committee) as it conducts its inquiry into the Future Made in Australia (Production Tax Credits and Other Measures) Bill 2024 (the bill).
The Future Made in Australia (FMIA) policy aims to maximise ‘the economic and industrial benefits’ of the net zero transformation and to make Australia a ‘renewable energy superpower’. This would require substantial government intervention and $22.7 billion in government spending on what would otherwise be economically unviable manufacturing projects, in the hope of encouraging subsidiary private funding.
This bill would introduce new tax offsets to incentivise the production of hydrogen and the processing of critical minerals in Australia, as part of the broader FMIA framework. This submission addresses the preferential treatment of hydrogen, and the FMIA and the government’s underlying commitment to net zero emissions by 2050. The analysis finds:
- Preferential government treatment of unproven and experimental hydrogen is economically unjustifiable; and
- The Future Made in Australia policy and commitment to net zero should be abandoned.
