The Clean Energy Council has welcomed the Federal Government’s final position on changes to the foreign resident capital gains tax (CGT) regime, which confirms no retrospective claims can be brought against already settled transactions and provides greater certainty for global investors backing the infrastructure needed to power Australia’s energy transition.
The changes confirm that no retrospective claims can be brought against transactions that have already settled, with finalised matters not to be reopened. The Bill also clarifies that large-scale batteries will be treated as renewable energy infrastructure under the regime.
Clean Energy Council Chief Executive, Jackie Trad, said the changes were an important step in protecting Australia’s reputation as a credible destination for international investment at a critical moment for the country’s energy system.
“Australia is competing for global capital at the exact moment we need it most, as we build the generation and storage needed to replace retiring coal,” Ms Trad said.
“One of the fastest ways to damage investor confidence is to change the rules after capital has already been committed. Protecting settled transactions removes that sovereign risk and reinforces an important principle that Australia honours the basis on which investment decisions are made.
“This is a meaningful outcome for the industry. It gives investors greater confidence to continue backing the large-scale infrastructure projects needed to keep the transition moving at pace,” she said.
While the protection of settled transactions is a welcome outcome, the absence of grandfathering provisions for investment decisions made before the Government’s original announcement remains a concern for a number of industry participants.
With coal generation continuing to retire over the coming decade and significant new investment required to replace that capacity, maintaining investor confidence in Australia’s policy settings remains critical. The sector will be watching the investment environment closely, and will continue discussions with the Federal Government to ensure that policy settings meet Australia’s needs.
This is a meaningful outcome for the industry. It gives investors greater confidence to continue backing the large-scale infrastructure projects needed to keep the transition moving at pace.Jackie Trad Clean Energy Council CEO
The Bill progresses several measures welcomed by the Clean Energy Council, including:
- Protecting settled transactions, ensuring no retrospective claims can be brought and no finalised matters reopened.
- Applying the new provisions prospectively to transactions yet to be initiated or completed.
- Recognising large-scale batteries as renewable energy infrastructure under the regime.
- Reducing the Taxable Australian Real Property threshold from 90 per cent to 75 per cent for indirect disposals.
Ms Trad said while the industry welcomed the progress made, important issues remained unresolved and continued engagement with Government would be necessary.
“Getting these investment settings right is fundamental. Australia cannot afford policy uncertainty at the very moment we need private capital flowing into the infrastructure that will replace retiring coal generation, strengthen energy security and help put downward pressure on electricity prices,” she said.
ENDS
For more information or to arrange an interview, please contact:
Liam Straughan
Clean Energy Council Media Officer
+61 409 470 683
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