David Pocock (ACT, Independent) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Minister Farrell: Last week, the Treasurer delivered a keynote speech where he acknowledged:

… without more decisive action across all levels of government, working with investors, industry and communities, the energy transition could fall short of what the country needs.

And yet the government still hasn't announced a comprehensive or credible response to the US Inflation Reduction Act. What is the reason for the delay, and does the government accept that we are losing the race for capital?

Don Farrell (SA, Australian Labor Party, Minister for Trade and Tourism) Share this | Link to this | Hansard source

I thank Senator Pocock for his question. The short answer to your question, Senator Pocock, is no. I think there is a degree of misunderstanding about how the United States Inflation Reduction Act actually works. If you have a look at the legislation, of course—

Paul Scarr (Queensland, Liberal Party) Share this | Link to this | Hansard source

Tell us!

Don Farrell (SA, Australian Labor Party, Minister for Trade and Tourism) Share this | Link to this | Hansard source

I'm happy to tell you, Senator Scarr, and you might learn something today.

The American legislation, the Inflation Reduction Act, provides that, starting at 40 per cent and then moving to 80 per cent, all of the critical minerals that are going to go into the batteries of electric cars in the United States have to come from countries that have two criteria. Firstly, they have the resources and, of course, once again Australia is the lucky country because we have either the largest or the second-largest deposit of all of the critical minerals that are going to go into the batteries of the future. Secondly, they have to have a free trade agreement with the United States. Australia is one of very few countries which have both of those criteria. What that means is a huge amount of investment, not just from the United States but also from Japan, Korea, Singapore—if we get lucky—maybe even the Europeans. So you can talk down the Inflation Reduction Act. In addition to that, what has California done? Well, California has mandated that by 20— (Time expired)

Sue Lines (President) Share this | Link to this | Hansard source

Senator Pocock, a first supplementary?

David Pocock (ACT, Independent) Share this | Link to this | Hansard source

Yes, critical minerals are one part of the Inflation Reduction Act. I note that the government's contribution is less than Microsoft's investment, which the Prime Minister also seemed to help announce. I am interested in why the government isn't implementing a production tax credit as we have seen in the US. Payment for outcomes—you produce solar panels here in Australia, we will give you a tax credit. What's the government doing on this?

Don Farrell (SA, Australian Labor Party, Minister for Trade and Tourism) Share this | Link to this | Hansard source

I thank Senator Pocock for his first supplementary question. Look, we are developing a response to the Inflation Reduction Act. I have tried to put into perspective the positive aspects of that piece of legislation. I didn't go into the negative aspects of that legislation and they relate to other forms of energy, such as hydrogen. One of the discussions that we're having with the United States at the moment is ensuring that the price that they sell their hydrogen at doesn't undercut any production of hydrogen. Of course, all of the states right now are looking at the way in which they can get into that hydrogen cycle. I know from South Australia's point of view just how much work and effort are going into the development at Port Bonython. (Time expired)

Sue Lines (President) Share this | Link to this | Hansard source

Senator Pocock, a second supplementary?

David Pocock (ACT, Independent) Share this | Link to this | Hansard source

Why is the Albanese government happy to use Australian companies for renewable energy photo ops but not back this up with tangible support in response in the Inflation Reduction Act to keep those companies here in Australia producing Australian-made products at a time when we hear so much about national security and sovereign capability?

Don Farrell (SA, Australian Labor Party, Minister for Trade and Tourism) Share this | Link to this | Hansard source

I thank Senator Pocock for his second supplementary question. Well, I don't accept the premise of that question. I think this government is moving in exactly the right direction to maximise the benefit for this country both in investment and in jobs in respect of all of those critical minerals and the new energy sources. This government intends to build Australia as a renewable superpower. All of the things we're doing, whether it's the National Reconstruction Fund, whether it's trying to encourage investment from overseas in our resources because we have always required that sort of investment— (Time expired)

Sue Lines (President) Share this | Link to this | Hansard source

Just for the benefit of the chamber, Senator Van had the next question but he has given that to Senator Babet.