Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Jim Chalmers MP)General outline and financial impact
Schedule 1 - Hydrogen production tax incentive
This schedule was prepared by the Department of the Treasury.
Outline
Schedule 1 to the Bill establishes the HPTI, in the form of a new tax offset called the hydrogen production tax offset. The hydrogen production tax offset is a refundable tax offset that is available at a rate of $2 for a kilogram of eligible hydrogen for companies that satisfy the eligibility requirements.
Date of effect
Schedule 1 to the Bill commences on the first 1 January, 1 April, 1 July or 1 October to occur after the day the Bill receives Royal Assent.
The HPTI applies to hydrogen produced in income years starting on or after 1 July 2027 and before 1 July 2040.
Proposal announced
Schedule 1 to the Bill partially implements the 'Future Made in Australia - Making Australia a Renewable Energy Superpower' measure in the 2024-2025 Budget.
Financial impact
Schedule 1 to the Bill is estimated to have a cost to the budget of $6.7 billion over the ten years from 2024-25.
All figures in this table represent amounts in $m.
| 2023-24 | 2024-25 | 2025-26 | 2026-27 | 2027-28 |
| 0.0 | 0.0 | 0.0 | 0.0 | -200.0 |
Impact Analysis
The Impact Analysis relating to Schedule 1 to the Bill has been included in Attachment 1.
Human rights implications
Schedule 1 to the Bill does not raise any human rights issues. See Statement of Compatibility with Human Rights - Chapter 4.
Compliance cost impact
The amendments in Schedule 1 to the Bill are expected to result in a medium overall compliance cost impact.
Schedule 2 - Critical Minerals Production Tax Incentive
This schedule was prepared by the Department of the Treasury.
Outline
Schedule 2 to the Bill establishes the CMPTI, in the form of a new refundable tax offset, the CMPTI tax offset, to support the processing of critical minerals in Australia.
Date of effect
Schedule 2 to the Bill commences on the first 1 January, 1 April, 1 July or 1 October to occur after the day the Bill receives Royal Assent.
The CMPTI applies to expenditure incurred in income years starting on or after 1 July 2027 and before 1 July 2040.
Proposal announced
Schedule 2 to the Bill partially implements the 'Future Made in Australia - Making Australia a Renewable Energy Superpower' measure in the 2024-2025 Budget.
Financial impact
Schedule 2 to the Bill is estimated to have a cost to the budget of $7.0 billion over the eleven years from 2023-24.
All figures in this table represent amounts in $m.
| 2023-24 | 2024-25 | 2025-26 | 2026-27 | 2027-2028 |
| 0.0 | 0.0 | 0.0 | 0.0 | -300.0 |
Impact Analysis
The Impact Analysis relating to Schedule 2 of this Bill has been included in Attachment 2.
Human rights implications
Schedule 2 to the Bill does not raise any human rights issues. See Statement of Compatibility with Human Rights - Chapter 4.
Compliance cost impact
This proposal is expected to result in a medium overall compliance cost impact, comprising a medium implementation impact and a low increase in ongoing compliance costs.
Schedule 3 - Amendments relating to Indigenous Business Australia
Outline
This schedule was prepared by the National Indigenous Australians Agency.
Schedule 3 to the Bill supports the Government's Future Made in Australia agenda by amending the ATSI Act to enable IBA to leverage their capital to invest in First Nations communities and businesses.
This reflects the government's intention, as stated in the 2024-25 Budget Papers, to enhance IBA's ability to leverage their capital to invest in First Nations communities and businesses. The amendments reform IBA's borrowing powers to enable greater investment in First Nations individuals, communities and businesses, driving First Nations economic self-determination.
Schedule 3 of the Bill gives IBA the power to borrow for a purpose in connection with their functions if the borrowing is authorised under the PGPA Act or under rules agreed to by the Minister for Finance.
Date of Effect
Schedule 3 to the Bill commences the day after Royal Assent.
Proposal announced
Schedule 3 to the Bill implements, in part, the 'Future Made in Australia - Attracting Investment in Key Industries' measure in the 2024-25 Budget.
Financial impact
Schedule 3 to the Bill has been assessed to have no financial impact.
Human rights implications
Schedule 3 to the Bill is compatible with human rights. See Statement of Compatibility with Human Rights - Chapter 4.
Compliance cost impact
Schedule 3 to the Bill does not have any impact on compliance costs.