Politics with Michelle Grattan: Budget fight looms on Future Made in Australia tax breaks

Treasurer Jim Chalmers on Tuesday handed down his third budget. It had a second successive surplus and sweeteners, including relief on energy bills, and tax breaks for development of green hydrogen and critical minerals processing.

The opposition will back the energy bill subsidy but oppose the tax breaks in the Future Made in Australia policy.

In this podcast we were joined by Angus Taylor, who is shadow treasurer, and Chalmers.

On the $300 household energy relief, Taylor says it’s an acknowledgement of a government broken election promise:

Look, this is an admission of failure by Labor, who promised the $275 electricity price reduction. It’s clear now that it’s not going to be delivered. So, instead, they’re giving a government handout. They’re putting a Band-Aid on a bullet wound.

On the Coalition’s opposition to the tax breaks for the development of green hydrogen and critical minerals processing:

This is the biggest-ticket item in the budget, $13.7 billion. And, it’s a huge amount of money. It is inflationary to spend that kind of money at a time like this. It is part of creating what is a sea of red ink as we go out and across the budget. We do want to see a successful manufacturing sector in this country but the pathway to do that is not to subsidise every unit of production.

Chalmers tackles criticism levelled at the universal nature of the energy rebates:

First and most importantly, we work on the implementation of this with the states who receive the funding and the retailers who provide the credit. And so we’re always looking for the best way to do that.

It would have been complex and time-consuming to set up a whole new system [to determine income and thus eligibility]. Our focus here, our priority here, is on providing cost-of-living relief to millions of people doing it tough and this is the best way to go about it.

He also makes it clear that while some people will get the rebate more than once if they are paying the energy bill on more than one property, this is not the case where properties are rented out.

It’s whoever’s name is on the bill. That’s what happened last time. That’s the principle that we apply.

On the looming Senate fight on the Future Made in Australia tax breaks, Chalmers says:

We understand that any coalition led by Peter Dutton’s first instincts are going to be nasty and to be negative, and to say no and to oppose things. We’ve seen this movie before. We play the cards that were dealt in the Senate, we do our best, but our intention is to pass the package that we announced.

Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.