Tax changes 'threaten to chill' record federal green energy support

The Australian Taxation Office (ATO) draft guidance published last week proposes excluding from exemption capital gains classified as 'passive investment' in large-scale solar, wind and battery storage projects. The regulation requires evidence of annual investor participation and documentation of operational engagement to clear the active-investment threshold. If the final version, scheduled for June 30, takes effect, the annual tax burden on affected projects will rise 15 to 22 percent.

Clean Energy Investor Group CEO Richie Merzian told ABC: 'Among the 47 large-scale projects notified for 2026, 22 worth A$18 billion are likely to reassess upcoming capital structure decisions.' Projects planned by Macquarie Capital, Brookfield Infrastructure and CIP Australia include the 800 MW Queensland Solar Phase 2, the 1.2 GW New South Wales Battery System and a Tasmania pumped hydro scheme. The federal government's 'Powering Australia' programme's initial A$25 billion public support pledge is unchanged.

Climate Change and Energy Minister Chris Bowen told parliament: 'The guidance is the ATO's independent technical assessment; as the department, we will ensure the final version does not impede the transition.' Opposition energy spokesperson Ted O'Brien responded: 'This is another example of the Albanese government's inconsistent policy toward renewable energy investors.' Goldman Sachs Australia chief economist Andrew Boak wrote in a research note: 'If the regulation is implemented, Australia's 2030 target of 82 percent renewables could slip to 2033 at the current pace.' The Federal Senate Environment Committee will examine the issue on June 5.