Treasury’s updated forecast, released in legislation introduced on Thursday, doubles the previously expected revenue from expanding a 30% capital gains tax on foreign investors in Australian energy, mining and infrastructure assets. The laws are now projected to raise about $2.3 billion over the next five years, compared with earlier budget estimates of roughly $200 million per year or $1 billion across the same period.
Under the new regime, foreign investors selling stakes in Australian energy, resources and infrastructure projects face a wider application of the 30% capital gains rate than before. Treasury’s higher revenue estimate reflects the scale of offshore ownership across these sectors where large global funds and utilities hold significant positions.
Renewables lobby groups argue the rules make Australia less competitive against lower-tax jurisdictions, especially for big wind, solar and storage projects that rely on international balance sheets.
The tougher tax settings land at an awkward moment for the government’s climate and energy agenda, as the Energy Minister works to revive sluggish clean energy investment to meet 2030 targets. Offshore capital currently supplies more than 70% of funding for Australian renewable projects, so any policy that dents after-tax returns is a direct threat to the investment pipeline.
Industry groups warn the revenue boost Treasury now expects could come at the cost of higher financing hurdles and slower project delivery.
