The passage of Australia’s version of the Inflation Reduction Act, known as Labor’s $22.7 billion (US$15 billion) Future Made in Australia legislation, has been hailed as a significant advancement by Treasurer Jim Chalmers. He described it as a major step forward in “making the Australian economy more prosperous and resilient” in the midst of the net zero transition.
Chalmers emphasized that the legislation will enable the unlocking of private sector investment to build a stronger, more diversified, and more resilient economy powered by renewable energy. This, in turn, will create secure, well-paid jobs across the country. He stated, “It embeds into law a disciplined and rigorous approach that will govern Future Made in Australia investments, to make the most of our net zero potential and ensure the benefits of these investments are widely shared and flow to local communities.”
Under the ambitious plan, the government aims to transform Australia into a “renewable energy superpower” by outlining criteria for projects to receive government incentives such as tax breaks, including the Hydrogen Production Tax Incentive. Additionally, the scheme will provide guaranteed statutory funding for the Australian Renewable Energy Agency to boost the country’s renewable energy sources.
The government is optimistic that it can unlock approximately $65 billion worth of investment in renewable capacity by 2030 through its Capacity Investment Scheme. Chalmers reiterated that the bills are specifically designed to enhance the investment environment and promote new industries that will lead to net zero emissions and strengthen economic resilience.
While the bill has successfully passed the House of Representatives, it still needs to be approved by the Senate to become law. Debates on the bill are expected to continue as it moves through the legislative process.
