Wednesday, 13 May 2026

 David DAVIS (Southern Metropolitan) (18:58): (2525) Tonight my adjournment is for the attention of the Minister for Energy and Resources, but it will be of interest to the Treasurer as well. It relates to two federal exposure draft bills that are out for discussion right now, exposure drafts on the ‘Treasury Laws Amendment Bill 2026: Strengthening the foreign resident capital gains tax regime’ and the ‘Treasury Laws Amendment Bill 2026: Renewable energy asset discount capital gains for foreign residents’. The current arrangements are that a capital gains tax is not leviable on foreign residents. At present foreign residents disregard capital gains if they occurred in relation to an asset that is not taxable Australian real property. Currently, under the existing regime, foreign investors disregard these capital gains liabilities in relation to energy infrastructure assets such as solar arrays, batteries and gas pipelines. This is not an exception specific to energy infrastructure but rather the application of an overarching regime.

But the government proposes to introduce capital gains tax for all energy infrastructure, and this will have several effects. First of all, those who already own pieces of infrastructure will be hit with the uncertainty and the unpredictability that is associated with changing the goalposts after they have invested. Those wanting to invest further from overseas will face additional barriers, and this does not seem to have been thought through clearly. Mr McGowan and I are well aware of this. We have talked to a number of firms, including renewable energy firms, and there is a proposal that there be a renewable energy discount on this, but a 50 per cent capital gains tax would still apply. It seems the federal government is a little bit obsessed by capital gains tax just at the moment. They are launching new attacks on every front, including on people holding residential property which they might be renting out, and now it seems energy infrastructure is in the gun.

There are a few points here, and I am asking the Minister for Energy and Resources to raise this at the energy ministers council and say there are some dire consequences that have been ill thought through here. This is going to push up the price of energy, both traditional energy sources and low-emission technology sources as well. It is going to make it more expensive for Australian households and more expensive for Australian businesses. This is an absolute clobber. They do not seem to understand that you cannot tax your way through this. They want to tax energy. I thought they were going to cut energy prices by $250 or $270 for families, but actually they are going to put a new set of taxes on every piece of energy infrastructure. This tax is a dire one. I understand why you might want to tax foreigners, but you would not want to do it retrospectively and you would not want to clobber the renewable infrastructure. The energy minister needs to take this up – (Time expired)