30 May 2024

Australian Budget looks to private and foreign investment to help secure economic future

The 2024–25 Australian Budget has measures to encourage private and foreign investment into Australia.

The 2024–25 Australian Budget will invest A$22.7 billion over 10 years to fulfil the Australian Government’s Future Made in Australia plan.

The Future Made in Australia plan maximises the economic and industrial benefits of the move to net zero and secures Australia’s place in a changing global economic and strategic landscape. The plan focuses on supporting sectors where Australia has a comparative advantage, and which contribute to decarbonisation or supply chain resilience.

The Future Made in Australia plan will realise Australia’s potential to become a renewable energy superpower, value-add to its resources and strengthen economic security by better attracting and enabling investment in priority areas.

Under the plan, Australia will use its world-class renewable resources to:

  • deliver cheaper, cleaner, more reliable energy for Australia and its region
  • build export-scale clean energy industries
  • bolster sovereign manufacturing capabilities in the national interest
  • make Australia an indispensable part of the global net zero economy. 

There are significant opportunities for investors through the plan. The plan includes initiatives to accelerate investment in renewable hydrogen, critical minerals processing, green metals (specifically iron, steel alumina and aluminium), low-carbon liquid fuels, and clean energy manufacturing (including solar and batteries). New incentive programs are coupled with streamlined processes and reforms to the enabling environment, to make it simpler and faster to invest in Australia. 

Investment in priority industries

The Government will create a Future Made in Australia Act and establish a National Interest Framework. They identify priority industries and ensure investments associated with them are responsible and targeted.

The Framework will focus on industries that contribute to the net zero transformation where Australia has a comparative advantage, and where Australia has national interest imperatives related to economic security and resilience. Through the Framework, priority industries will be identified under 2 streams:

  • Net zero transformation: priority industries that can make a significant contribution to achieving net zero, where Australia has grounds to build a comparative advantage.
  • Economic security and resilience: sectors that are critical to Australia’s resilience, vulnerable to supply disruptions and require support to unlock private capital. 

The budget identifies 5 priority sectors aligned with the National Interest Framework and the Future Made in Australia plan:

  • renewable hydrogen
  • critical minerals processing
  • green metals (specifically iron, steel alumina and aluminium)
  • low-carbon liquid fuels
  • clean energy manufacturing, including battery and solar panel supply chains. 

The Australian Government will drive growth in these sectors by investing in skills and training, research and education, infrastructure and clean energy, and advanced manufacturing.

The Australian Government will also provide significant financial incentives, regulatory changes and other enablers to help crowd in private investment.

Sectoral and innovation support

Measures announced in the Budget include a number of initiatives to attract private-sector investment and innovation. These are detailed below:

Future Made in Australia Innovation Fund

The new A$1.7 billion Future Made in Australia Innovation Fund will support innovation, commercialisation, pilot program and early-stage development of innovative technologies and facilities in priority sectors. These include renewable hydrogen, green metals, low-carbon liquid fuels and clean energy technology manufacturing.

Powering Australia’s green hydrogen industry

Renewable hydrogen opens the door to green metals that are critical to industrial decarbonisation. Australia’s world-class renewable energy resources make Australia well placed to produce renewable hydrogen at internationally competitive prices. Australia is also close to export markets that have expressed strong interest in importing renewable hydrogen.

The Australian Government will introduce a new Hydrogen Production Tax Incentive (worth an estimated A$6.7 billion over 13 years from 2027–28). The incentive will provide a A$2 incentive per kilogram of renewable hydrogen produced between 2027–28 and 2039–40, for up to 10 years per project.

The budget also provides A$1.3 billion over the next decade to expand the Hydrogen Headstart program, supporting early movers to invest in the industry’s development.

Supporting a thriving critical minerals industry

Australia is in a strong position to meet the rising global demand for critical minerals, thanks to some of the world’s largest reserves of lithium, cobalt and rare earths. The budget has measures to encourage investment in refining and processing facilities.

The Australian Government will introduce a new Critical Minerals Production Tax Incentive (an estimated A$7.0 billion from 2027–28 to 2040–41). The incentive will provide eligible recipients with a refundable tax offset of 10% for the costs of processing the 31 critical minerals currently listed in Australia. The credit will be available for a maximum of 10 years between 1 July 2027 and 30 June 2040. Eligible processing costs will be informed by consultation.

The budget also provides A$566.1 million over 10 years to Geoscience Australia to deliver data, maps and other tools that will fully map Australian resources. This initiative will accelerate the discovery of critical minerals and other resources necessary for the net zero transition.

Other investments include A$10.2 million to establish the Critical Minerals National Productivity Initiative. Under this initiative, the Australian Government will partner with state and territories to develop pre-feasibility studies of common-user infrastructure.

Australia will launch a Critical Minerals Trade Enhancement Initiative to negotiate carbon intensity benchmarks for critical minerals products with like-minded trade partners. This measure will help address the additional cost of producing Australia’s critical minerals products due to Australia’s high ESG standards.

Solar Sunshot

The Australian Government is investing A$1 billion to support the development of Australia’s solar PV manufacturing industry. The Solar Sunshot program will support manufacturers to establish and grow facilities in Australia across the solar PV supply chain.

Battery Breakthrough Initiative

A new Battery Breakthrough Initiative (A$523.2 million over 7 years) will help transform Australia’s battery industry and help manufacturers move up the battery value chain. This is a key deliverable under the recently released National Battery Strategy.

Investing in a quantum leap

The Australian and Queensland Governments are jointly investing nearly A$1 billion into frontier technology company PsiQuantum to build the world’s first fault-tolerant quantum computer. The Australian Government’s investment of $466.7 million is matched by the Queensland Government. PsiQuantum will establish a facility in Brisbane, Queensland to build and operate the quantum computer.

Separately, the Australian Government has announced a A$18.4 million grant to the University of Sydney to establish Quantum Australia. The new national centre will raise awareness of quantum technology, foster collaboration between industry and universities, encourage the creation and growth of more quantum startups, and connect quantum companies on a national and international scale.

Developing a green metals production industry

Australia is drawing on its abundant metal and renewable energy resources to develop a green metals industry. The budget provides A$18.1 million over 6 years to explore the development of green metals production. The new Green Metals Foundational Initiatives aim to position Australia as the world leader in green production of iron, steel, alumina and aluminium.

Australian 2024-25 federal budget


Attracting and enabling investment

The Australian Government is reforming its investment settings, institutions and regulatory processes to attract and enable the investment Australia needs. Details about some of the relevant changes announced in the Budget are below.

Strengthening and streamlining approvals

The Australian Government is reforming its foreign investment framework to make it work better for investors. This involves streamlining the processing regime to provide faster approvals for known investors that are investing in non‑sensitive sectors, and that have a good compliance record. This will reduce wait times and compliance costs. More robust, efficient and effective arrangements will also be introduced to scrutinise complicated or higher-risk proposals. Read more about reforms to Australia’s foreign investment framework.

The Government has also provided additional funding to:

  • prioritise approvals for renewable energy projects of national significance
  • support faster decisions on environment, cultural heritage and planning approvals.

More support will be provided for assessments and to speed up approval processes. This will reduce delays for projects and provide greater certainty for businesses.

New ‘front door’ for investors

The Australian Government will create a new ‘front door’ for investors with major, transformational investment proposals aligned with the Future Made in Australia agenda. It will provide a single point of contact for investors; deliver a coordinated approach to investment attraction and facilitation; and support faster approval decisions. The front door will be developed in consultation with investors, businesses, governments, unions, communities, and other experts over 2024.

A domestic national interest account

Export Finance Australia’s National Interest Account will be expanded to support projects where domestic capability is critical to:

  • protect Australia’s national security interests
  • strengthen resilience
  • ensure Australia is sufficiently resilient to shocks. 

 Investments will be guided by the National Interest Framework.

Expanding the Guarantee of Origin Certification scheme

The Australian Government will fast-track the initial phase of the Guarantee of Origin Scheme for hydrogen to measure and certify emissions intensity across the supply chain of key products. The program will also be expanded to include green metals and low-carbon liquid fuels.

Promoting sustainable finance

The Australian Government is committing A$17.3 million to mobilise private-sector investment in sustainable activities. This includes extending Australia’s sustainable finance taxonomy to the agriculture sector and developing a labelling regime for financial products marketed as sustainable. The Government will also examine opportunities to improve data quality and provide A$1.3 million to develop and issue guidance for best practice transition plans.

Coupled with the Government’s climate disclosure legislation underway, these activities will support an upcoming issuance of around A$7 billion of sovereign green bonds due later this year.

Clean energy workforce support

The Australian Government is investing A$91.0 million over the next 5 years to accelerate the development of the clean energy workforce through expanded access to the New Energy Apprenticeship Program and investments in VET clean energy courses.

The Budget also expands support for women training in male-dominated industries through:

  • A$55.6 million for the Building Women’s Careers program
  • A$38.2 million to support diversity in science, technology, engineering and maths.

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