Federal Labor has moved to put more of a buffer between its reforms to Capital Gains Tax (CGT) and foreign investors in Australia’s renewable energy transition, adding another decade of breathing room before the full force of the new rules are applied to the sector.
News emerged from federal parliament on Thursday that the Albanese government had amended its legislation to extend a proposed CGT concession from 2030 to 2040 for foreign investors in renewables.
The CGT legislation, first introduced to federal Parliament in early July, had stopped short of making the reforms targeting foreign-owned wind, solar and battery assets retrospective, and had offered a 50 per cent discount on the tax for the next four years, to help soften the blow.
But industry groups were not satisfied that those changes would avert a major flight of capital after 2030, and they warned that the small discount window would encourage foreign owners, who make up the vast majority of investors in Australian renewables, to sell quickly.
“It’s the opposite of the message we want to send, which is that Australia is a stable predictable investment destination that respects the long term timeframes necessary for major energy infrastructure,” Richie Merzian, the CEO of the Clean Energy Investor Group, said at the time.
