AHC FED Future Made in Australia: Community Benefit Principles

The full PDF can be downloaded here.

Ryan Dawson
A/g Manager
Community Benefit Principles
Department of Industry, Science and Resources
Australian Government
GPO Box 2013, Canberra ACT 2601, Australia

To the Community Benefit Principles team,

Re: Future Made in Australia Community Benefit Principles

The Australian Hydrogen Council (AHC) welcomes the opportunity to input into the design process for the Future Made in Australia (FMIA) Community Benefit Principles (CBPs). AHC is the peak body for the hydrogen and derivatives industry in Australia, and our membership includes companies from across the value chain.

AHC supports the CBPs as a legitimate expression of the Australian Government’s right to expect public benefit where significant public funding is provided to private proponents. In an emerging industry context, CBPs can also play a constructive role by making proponents think early and systematically about workforce, community, First Nations engagement, domestic capability and integrity.

We also support the approach presented insofar as it demonstrates procedural clarity tied to the funding mechanism, and flexibility and discretion in how the principles are operationalised by proponents. Projects competing globally already face permitting, approvals, cost, and execution risks. Boards make comparative decisions across jurisdictions on the basis of certainty, predictability, and manageability of risk. If CBPs are implemented in a way that introduces subjective, externally contestable compliance or exposes proponents to reputational and political risk beyond their control, then, in practice, they become an additional risk factor. That outcome would be directly at odds with the objectives of FMIA.

We explain further below, with answers to the consultation questions in the attachment.

The role of the FMIA support provider/ATO is paramount

CBPs sit in an unusual governance position: they are legislated expectations applied across multiple industries, but there is no dedicated regulator with rulemaking authority, adjudication mechanisms, or stable interpretive precedent.

In that environment, for grants and associated FMIA support, CBPs can only work if they operate as an internalised element of funding decisions; that is, as part of how the Commonwealth (through the relevant agency or programme) assesses overall merit and manages contractual performance, in the same way other project risks and commitments are handled. This will be the only way the intent of the FMIA supports for our emerging industry will be able to meet the FMIA legislative intent.

For PTI coverage through the tax system, the ATO is the sole administrator and regulator, and, like other tax matters, audits should occur where warranted, where they can be informed by internal guidance and inter-departmental coordination.

This then means that CBPs should be internalised as part of the funding assessment and contracting relationship, or as part of an ATO audit, rather than externalised as an open-ended basis for third-party challenge or used for project feedback from the public. This does not preclude government providing decision-making support to relevant Commonwealth agencies, or DISR, Treasury or agencies reviewing the effectiveness of CBPs over time in other ways.

Discretion must be preserved, with procedural clarity

Consistent with the above, AHC’s position is that CBPs in substance must be implemented flexibly and within the context of the relevant Commonwealth programme, because the same CBP expectation will look different across project types, locations, community contexts, labour markets and supply chains.

The test of compliance is then procedural within the context of their broader application and the programme’s own logic. It is reasonable to expect proponents to show they have identified the relevant CBP issues, engaged appropriately, and established credible approaches commensurate with project maturity. This recognises that early-stage projects will not have all answers at EOI stage and that good-faith evolution is normal as projects approach FID. The proponent’s obligation is to show serious consideration, evidence, and ongoing management, not to guarantee outcomes that may be impossible to lock down before design, procurement and delivery pathways are final.

Publication will bring unnecessary project and government risk

AHC is concerned by the proposal that proponents’ plans be made publicly available. The function of the CBPs is to inform a funding decision/demonstrate PTI compliance, not to create a public adjudication process by proxy. Once publication invites adversarial interpretation, the proponent bears reputational risk, and government bears political risk because Commonwealth discretionary decisions become more exposed to retrospective challenge.

Domestic capability and local content: the regime must recognise sequencing and feasibility

Domestic capability and local content expectations need to be handled with particular care. In emerging industries, the supply chain often does not exist at scale. For some components and systems, global manufacturing ecosystems can currently deliver at materially lower cost and at scale, whereas domestic supply would require building capability from a low base.

This is where sequencing matters. In many instances, early deployment and learning-by-doing is the mechanism through which demand becomes credible; and credible demand is what makes domestic capability investable. A CBP model that treats local content as a static, enforceable requirement risks preventing projects from proceeding at all, which would delay the very demand signal needed for domestic industry development.

Thresholds and smaller proponents: avoid a step-change burden that distorts early-stage financing pathways

The proposed $20 million threshold for non-PTI coverage is too low, particularly for capital-intensive, pre-commercial projects. This threshold risks creating a step-change in CBP burden that does not map cleanly to organisational capacity to absorb additional process obligations, or to project maturity.

In particular, early-stage proponents who are still in the process of proving technology, securing offtake, and raising staged private capital can be exposed to disproportionate process requirements if CBP expectations escalate too early, too quickly, or in ways that require commitments that are not knowable prior to FID. The operational model must remain scalable and maturity-aware so that CBPs do not inadvertently penalise precisely the cohort of smaller and mid-scale proponents FMIA seeks to bring into existence.

For example, at low TRL/CRL, proponents may well require support at more than $20 million but not yet know whether they’ll licence or vertically integrate, if they will manufacture or import, and what the final workforce profile will be. However, the CBPs implicitly assume mature supply chains, domestic manufacturing choices, and settled employment models at the time of making an application.

Applying late-stage industrial expectations to early-stage innovation risks deterring applications, biasing against pre-commercial projects, and perversely favouring incumbents. This imposes disproportionate expectations at precisely the stage where policy settings should be facilitating growth, investment, and global competitiveness.

Avoid uniform targets that ignore location and project context

The overall CBP design should avoid setting proponents up to fail through targets that cannot be realistically delivered in some contexts. Where numeric targets are used, they should be applied with discretion and contextual judgement by the relevant funding agency, particularly where labour pools differ materially and where workforces are staged over time.

Where the Australian Government wishes to pursue numeric outcomes, it should do so via program design, co‑investment in enabling systems (training pipelines, community partnership capability, etc.), and informed discretion, not by converting CBPs into compliance tests.

This concern is most acute where specific numerical targets are introduced without sufficient stress-testing against geography, labour market conditions and project type. A uniform First Nations employment target, applied regardless of location and labour market composition, has been highlighted as an example of policy that may create feasibility and compliance risk if applied as a rigid requirement.

Conclusion

AHC recommends that there needs to be clear understanding within the relevant departments and agencies about how delivery on the CBPs happens in practice, and given the predictable challenges, so that we can honestly say that the framework does not make it unnecessarily more difficult for good faith actors in strategically important industries to invest and scale in Australia.

If you wish to discuss any element of this submission, please contact me at [email protected].

Yours sincerely,

Dr Fiona Simon
Chief Executive Officer
Australian Hydrogen Council

---

Attachment: AHC answers to CBP consultation questions

Community Benefit Principles consultation questions

1. Please tell us about you or your organisation, and your interest in the Community Benefit Principles.

The Australian Hydrogen Council (AHC) is the peak body for Australia’s emerging clean and green hydrogen industry and engages closely with hydrogen end-use markets. This includes hydrogen derivatives used as sustainable fuels – such as methanol and ammonia for shipping, and SAF for aviation – as well as hydrogen inputs to green metals, including green iron. Hydrogen is therefore central to Australia’s industrial decarbonisation pathway and to the Government’s Future Made in Australia (FMIA) agenda, both where hydrogen is referenced explicitly and where it underpins priority areas such as low-carbon liquid fuels, sustainable aviation fuel, and green metals.

AHC has focused heavily on social licence, responsible project development, and the conditions required for early-stage industries to scale sustainably. Our membership includes project developers, infrastructure providers, industrial offtakers, and service providers who are actively progressing first-of-a-kind, pre-commercial hydrogen and hydrogen-derived projects.

These members are precisely the cohort the FMIA support mechanisms are intended to assist: organisations developing nationally significant projects that are high-risk, capital-intensive, and operating in a highly competitive global environment. As such, AHC has a strong interest in the Community Benefit Principles (CBPs) and associated guidance, given our members will be required to develop plans and demonstrate compliance with these requirements in order to access FMIA support.

Minimum requirements and threshold requirements

2. What feedback do you have on the proposed minimum requirements in Appendix A of the guidance document?

Overall, AHC considers the proposed minimum requirements in Appendix A to be reasonable and broadly proportionate. They focus appropriately on demonstrating compliance with existing legal and regulatory frameworks, including workplace laws, complaint-handling processes, rights relating to industrial association membership, workplace delegate protections under the Fair Work Act, and director-level accountability through formal declarations. The expectation that these requirements be addressed in a concise and clear manner is also appropriate.

Similarly, the requirements under Principle 2 relating to compliance with workplace and related laws, and under Principle 3 regarding early engagement with key stakeholder groups – including First Nations communities – are consistent with existing good practice. The requirement to engage with the Net Zero Economy Authority in relation to prospective communities of interest, including through an industry jobs plan, is also reasonable, assuming the NZEA has the resources to engage in a timely way.

We note, however, that references to communities being involved in decision-making could be interpreted inconsistently if not further clarified; this may imply a transfer of decision-making authority. We suggest the guidance be clarified to make explicit that Principle 3 is intended to ensure communities have meaningful opportunities to inform and contribute to decision-makers’ processes, and that proponents demonstrate how community input has been considered.

We also have concerns regarding the introduction of explicit numerical targets, particularly under Principle 4.1, including a proposed target of 4 per cent First Nations employment. While the intent is reasonable, mandating fixed targets at the minimum-requirements stage carries risk, particularly for early-stage, first-of-a-kind projects that may be operating in regions with highly variable labour markets, supply chains, and workforce availability. As outlined elsewhere in our submission, overly prescriptive targets may inadvertently discourage participation. We also note that the target is inconsistent with other programmes; 4% originates from the Indigenous Procurement Policy but is not even the standard for the CIS (a more developed sector).

The inclusion of compliance with the Modern Slavery Act is appropriate, as is the expectation of transparency regarding tax practices.

3. What is an appropriate threshold amount for applying the threshold requirements and Future Made in Australia plans?

AHC considers the proposed threshold of $20 million in FMIA support to be too low, particularly given the step-change in compliance burden that applies once this threshold is crossed. We recommend the Australian Government clearly articulates the rationale for selecting this figure.

In hydrogen and hydrogen-derived sectors, FMIA support is often directed toward first-of-a-kind projects that may involve relatively small or early-stage corporate entities, limited staff numbers, and constrained internal capacity. This is despite the strategic scale or national importance of the project itself. In these circumstances, a $20 million threshold does not reliably distinguish between mature organisations with substantial administrative capability and smaller proponents that are still in early development phases.

If the policy intent is to scale compliance obligations in line with organisational maturity and capacity, then the proposed threshold may not align well with the realities of emerging industrial sectors.

4. What feedback do you have on the proposed threshold requirements in Appendix B of the guidance document?

AHC considers the types of requirements outlined in Appendix B to be generally reasonable in substance, including the expectation that proponents demonstrate more developed policies and systems as project scale increases.

However, we suggest that these threshold requirements are more appropriately applied to larger, more established projects or proponents – particularly those with greater staffing levels and embedded corporate systems – rather than being triggered primarily by funding quantum alone. A more nuanced approach that better reflects organisational capacity would improve proportionality and reduce unnecessary administrative burden on early-stage proponents.

5. Can you suggest additional or alternative minimum and threshold requirements that align with the Community Benefits Principles and would balance the regulatory/administrative burden with delivering benefits to communities?

AHC does not propose additional or alternative minimum or threshold requirements at this stage. We consider it preferable to focus on ensuring the existing framework is proportionate, clear, and consistently applied.

6. Should proponents be asked to negotiate project-specific additional commitments with decision-makers? Can you suggest appropriate additional commitments?

AHC does not support an approach that requires proponents to negotiate project-specific additional commitments with decision-makers beyond the established framework.

Introducing further ad hoc or negotiated requirements risks increasing administrative complexity and uncertainty at a time when FMIA support is intended to accelerate investment in strategically important industries operating in a highly competitive international context.

7. What additional types of support provided by the Commonwealth, a Commonwealth entity or a Commonwealth company should be prescribed as Future Made in Australia support in the Rules?

AHC does not have a settled position on additional types of Commonwealth support that should be prescribed under the FMIA framework.

Community engagement

8. How else can the Community Benefit Principles encourage recipients of support to invest in regions directly affected by the energy transition?

9. How should the application of Community Benefit Principles ensure that communities, including First Nations communities, First Nations businesses and services, small businesses and local supply chains benefit from Future Made in Australia projects?

10. In what other ways could the application of Community Benefit Principles support progress towards Closing the Gap targets?

11. How can the government better support Traditional Owners representative bodies to engage effectively with project proponents?

12. How can the application of Community Benefit Principles help to ensure that project proponents engage genuinely with impacted communities to ensure the concerns and opportunities are understood and benefits are shared?

AHC recognises the intent behind the CBPs in encouraging responsible project development and ensuring that public funding is not associated with avoidable harm or poor practice. However, we caution against positioning the CBPs as a primary mechanism for actively driving additional regional investment or social outcomes beyond what is already required through existing regulatory, planning, and funding frameworks.

At this stage of industry development, there is a material risk that over-extending the role of the CBPs – particularly by layering additional expectations, objectives, or process requirements – could deter project development altogether. For emerging, first-of-a-kind hydrogen and hydrogen-derived projects, proponents are already navigating complex approval pathways, financing challenges, skills constraints, and global competition. Adding further uncertainty or perceived discretionary burden increases the risk that projects do not proceed, resulting in no investment, no employment, and no community benefit.

In our view, the appropriate role of the CBPs is therefore assurance, not amplification. They should provide confidence that Commonwealth funding is not being used in ways that enable avoidable or inappropriate outcomes in areas such as employment practices, procurement, engagement, or governance, rather than acting as a vehicle for pursuing additional policy objectives at the project level.

From this perspective:

• The most effective way for communities – including First Nations communities, First Nations businesses, small businesses, and local supply chains – to benefit from FMIA projects is to ensure that FMIA funding can be deployed in a timely, predictable, and investable manner. If funding is not deployed, there are no projects and therefore no benefits to share.
• Seeking to maximise, formalise, or lock in outcomes across multiple dimensions at the outset – particularly through prescriptive requirements or expectations of proof – risks creating an insurmountable hurdle for proponents, with the unintended consequence of undermining the FMIA objectives themselves.
• The application of the CBPs should operate primarily as an internalised contractual framework between the funding decision-maker and the proponent, rather than as an externally facing or evolving set of social obligations. This approach provides clarity, reduces political and regulatory risk, and maximises the likelihood that projects reach financial close and proceed to delivery.
• Existing regulatory regimes, approval processes, and engagement requirements already play a substantial role in shaping how proponents interact with communities and Traditional Owners. The CBPs should complement those established mechanisms, not duplicate or override them.

More broadly, AHC notes that discussion of CBPs in the context of FMIA has been ongoing for close to two years, and current programmes are already requiring adherence. At this point, certainty is more valuable than further expansion or refinement, as long as there is built-in flexibility as we have discussed.

There would be merit in allowing the framework to operate as designed, monitoring outcomes over time, and undertaking a review once a body of projects has been supported and lessons can be drawn from practical experience.

In summary, the greatest contribution the CBPs can make to regional investment, community benefit, and broader policy objectives at this stage is to reduce risk, enable deployment, and maintain proportionality, thereby ensuring that strategically important projects proceed and generate real, tangible benefits over time.

Overlaps with other obligations

13. Do you think the proposed approach in section 3.3 of the public guidance relating to existing obligations is sufficient?

AHC generally supports the intent of the approach outlined in section 3.3 of the public guidance, particularly the recognition that existing regulatory, policy, and legislative obligations should be taken into account when assessing compliance with the CBPs.

In principle, it is appropriate that:

• where a national target already exists, decision-makers may seek commitments aligned with that target where relevant; and
• where proponents are already required to maintain policies, strategies, or other documents under Commonwealth, state, or territory regimes, those existing materials should be able to be relied upon to demonstrate compliance.

However, we consider that the current drafting does not go far enough in providing certainty or practical guidance. In particular, the formulation that decision-makers “may have regard to” existing obligations is too weak. A stronger presumption in favour of recognising and relying on existing regulatory instruments would materially reduce duplication, uncertainty, and administrative burden for both proponents and decision-makers.

More broadly, section 3.3 would be strengthened by the Commonwealth proactively identifying and mapping the key existing regimes that are likely to produce equivalent outcomes to the CBPs. Providing a clearer reference set of applicable frameworks would assist proponents in preparing proportionate responses and would support consistent decision-making across programs.

AHC also notes the proposed discretion for decision-makers to waive or adapt requirements where they are not appropriate to a particular program or project. While this discretion is welcome, the guidance currently frames such circumstances as limited and exceptional. In practice, there may be a wider range of situations where specific requirements are not relevant or practical, including differences between:

• research and development activities and large-scale manufacturing,
• project scale and maturity,
• regional context, and
• workforce composition.

Rather than treating non-applicability as a special case requiring justification, AHC recommends a more procedural framing; one that allows decision-makers to assess, as a matter of course, whether a given requirement is relevant to the nature of the program or project. Where it is not, non-application should be acceptable without creating a perception of non-compliance or exception-seeking.

14. Are there any minimum requirements that excessively overlap with existing obligations? What would you propose instead?

15. Are there any threshold requirements that excessively overlap with existing obligations? What would you propose instead?

At this stage, AHC is not in a position to comprehensively identify where proposed minimum or threshold requirements may excessively overlap with existing obligations. This reflects practical constraints associated with the consultation process rather than a lack of interest.

The consultation period has been compressed, with materials released shortly before the end-of-year shutdown and submissions due in early February. For industry bodies such as AHC, this has significantly limited the ability to consult meaningfully with members – many of whom have had key staff unavailable throughout December and January – and to undertake a detailed, clause-by-clause mapping exercise across multiple regulatory regimes.

We expect that a foundational component of this work would be an internal assessment by government of how the proposed CBPs intersect with existing Commonwealth, state, and territory obligations. We strongly encourage the Australian Government to undertake this analysis and to publish a consolidated annex or reference document that:

• identifies where substantial overlap exists,
• indicates the degree of alignment or equivalence (for example, where an existing requirement already delivers the intended outcome), and
• clarifies where reliance on existing instruments would be sufficient to automatically demonstrate compliance.

This need not involve value judgements about whether requirements are “excessive”, but could instead provide a factual assessment of overlap. For example, identifying where an existing obligation delivers a high degree of alignment (e.g. 80–90 per cent) may support a policy choice to reference that obligation directly, rather than creating a parallel CBP requirement.

Such an approach would materially improve clarity, reduce duplication, and support the stated objective of minimising unnecessary compliance burden, particularly for proponents operating across multiple jurisdictions and regulatory frameworks.

Future Made in Australia plans

16. Is the proposed content (at Appendix C of the public guidance) for Future Made in Australia plans sufficient to provide transparency, support public trust and demonstrate the benefits the project will provide to communities? If not, what other content should they include?

AHC considers the proposed content requirements for FMIA Plans, as set out in Appendix C of the public guidance, to be broadly sufficient to meet the stated objectives of transparency, public confidence, and articulation of community benefits.

The listed elements are appropriate and proportionate. In particular, the requirement for an undertaking that proponents will take all reasonable steps to meet their commitments reflects a practical and realistic standard, consistent with the risk profile of early-stage and first-of-a-kind projects.

We do not support the inclusion of additional content requirements at this stage. The proposed framework appropriately balances accountability with flexibility, provided that expectations around the level of detail required – particularly in relation to commitments and compliance pathways – remain proportionate and scalable to project maturity.

17. Do you foresee any issues with publishing Future Made in Australia plans? How should confidentiality concerns (for example, commercial-in-confidence information) be managed?

AHC does foresee material issues with the publication of FMIA Plans.

First, FMIA Plans form part of a funding and decision-making process administered by the Commonwealth. As such, they should be treated consistently with other grant-related documentation, which is not typically published in full, particularly where it contains commercially sensitive information or forward-looking commitments made under conditions of uncertainty.

Second, given the contested and politically salient nature of the energy transition, there is a real risk that published plans – prepared in good faith and reflecting reasonable commitments at a particular point in time – could be used out of context, or retrospectively, to create political, reputational, or operational risk for proponents. This includes the risk of informal ratcheting of expectations beyond what was originally agreed, potentially discouraging participation in FMIA programmes.

We are concerned that publishing FMIA Plans may blur the boundary between funding accountability and regulatory or quasi-regulatory enforcement. This risks conflating multiple frameworks in a way that increases uncertainty for proponents without delivering commensurate public benefit.

If publication is pursued, strict safeguards would be required to:

• protect commercial-in-confidence information,
• clearly distinguish commitments from outcomes,
• recognise the conditional and evolving nature of early-stage projects, and
• avoid the use of plans as a mechanism for informal escalation of requirements.

18. Are there any special circumstances which might require changes to the content provided in Future Made in Australia plans?

AHC does not consider that special or exceptional circumstances warrant changes to FMIA Plan content at this stage.

However, it is important to recognise that FMIA-supported projects are, by definition, operating in an emerging industry context. As projects progress from pre-FEED through to final investment decision, construction, and operation, material aspects of project design, economics, workforce requirements, and delivery timelines may evolve. It is therefore reasonable to expect that commitments and capabilities may change over time as engineering certainty increases and risks are resolved.

This evolution should be treated as a normal feature of project development, rather than as an exception requiring special treatment or additional compliance burden.

19. Should any proponents (receiving Future Made in Australia support) be exempt from all or part of the requirement to have a Future Made in Australia plan? If so, in what circumstances would exemptions be appropriate?

We consider that decisions regarding exemptions from all or part of the requirement to have an FMIA Plan should rest with the relevant funding decision-maker, exercised at their discretion.

Given the diversity of FMIA programmes, project types, and proponents, a rigid or prescriptive exemption framework would be unlikely to accommodate all relevant circumstances. Decision-makers are best placed to assess whether the requirement for an FMIA Plan, or specific elements of it, is appropriate and proportionate in light of:

• the nature of the program or support being provided,
• project scale and maturity,
• the type of activity (e.g. R&D versus deployment), and
• existing obligations already governing the proponent.

Maintaining this discretion will support proportionality, reduce unnecessary administrative burden, and increase the likelihood that FMIA support is deployed effectively.

Reporting, monitoring and compliance

20. Do you support the approach in the Community Benefit Principles public guidance of demonstrating compliance with the minimum requirements? If not, what would you replace this approach with? What is an appropriate frequency and level of detail for proponents to report against?

We broadly support the approach outlined in the CBPs public guidance in relation to reporting and demonstrating compliance with minimum requirements, particularly where reporting arrangements are embedded within existing funding agreement frameworks and administered by the relevant decision-maker or FMIA support entity.

It is appropriate that:

• reporting formats, frequency, and timing are determined by the decision-maker or support entity;
• reporting focuses on progress, risks, and barriers to delivery; and
• processes for renegotiation or variation of commitments are managed through established funding agreement mechanisms.

This approach appropriately recognises the diversity of FMIA programs and project types, and avoids the creation of a separate, stand-alone reporting regime.

While the guidance refers to reporting on progress toward community benefit outcomes, AHC emphasises that for early-stage and first-of-a-kind projects, outcomes should be understood in the context of process steps taken, and the evolving nature of project delivery. Reporting should focus on whether proponents are taking reasonable and good-faith steps toward their commitments, rather than on rigid outcome metrics that may be outside a proponent’s control as projects evolve.

AHC also supports the guidance’s recognition that commitments made at the application stage may not always be delivered as originally envisaged due to changes in project design, market conditions, or other factors beyond a proponent’s control. In such circumstances, proponents should be expected to:

• communicate early with the relevant decision-maker,
• explain emerging risks or constraints, and
• seek to renegotiate commitments where appropriate through agreed variation processes.

This is a normal and expected feature of emerging industry project delivery and should not be treated as non-compliance.

We reiterate our concerns regarding the proposed publication of FMIA Plans, including requirements for public release within a specified timeframe, as noted in our answer to Question 17. Demonstrating compliance should occur primarily through contractual and administrative arrangements with the funding entity, not through public exposure.

Finally, any reporting expectations must explicitly recognise the early and uncertain nature of many FMIA-supported activities, including feasibility studies and pre-FEED work. Reporting requirements should remain proportionate to project maturity and avoid locking proponents into commitments that cannot reasonably be assessed at that stage.

21. Do existing dispute-resolution avenues provide sufficient scope for interested parties to report non-compliance? If not, are other mechanisms required? How should they function?

As we have argued already, FMIA support is provided through structured funding arrangements between the Commonwealth (or its entities) and project proponents. Compliance with CBPs should therefore be assessed and managed within those contractual and administrative relationships, consistent with established grant governance practices.

This question suggests that the intent is to provide for third parties to raise allegations of non-compliance as a form of regulation, that is, for complainants to engage with external dispute resolution as a form of civil regulation. Encouraging quasi-regulatory or adversarial oversight regimes seems counterproductive. This would significantly increase uncertainty and risk for proponents, discourage participation in FMIA programs, and undermine the objective of enabling timely investment in strategically important industries.

We are particularly concerned that such mechanisms could incentivise subjective or opportunistic challenges to projects, rather than constructive engagement, and could expose proponents to reputational and operational risk unrelated to their actual performance against agreed commitments.

If broader feedback is sought on how projects are being experienced by affected communities, this should be undertaken in a structured and proportionate manner by government – such as through periodic, program-level consultation or evaluation – rather than through ad hoc dispute or complaint pathways targeting individual projects.

In summary, existing grant governance, contractual variation, and compliance mechanisms provide sufficient scope for monitoring and addressing issues. Introducing third-party dispute or reporting mechanisms would be unnecessary, counterproductive, and inconsistent with the FMIA’s core objective of accelerating investment.

Community Benefit Principles and Production Tax Incentives

22. Are the community programs typically associated with company activities reflected in the request for proposed policies, targets, plans? Is there other information relevant to critical mineral or hydrogen projects that you would like to see included in these Reports?

We note that the information requirements in Appendix E largely replicate the content and intent of the CBPs framework applied to grant-like support. Many elements (e.g., workforce practices, skills development, engagement with First Nations communities, local procurement approaches, modern slavery compliance, and baseline tax compliance) are recognisable features of typical corporate programs and existing compliance regimes.

However, we are concerned that the Production Tax Incentive (PTI) community benefit report settings risk becoming an additional, parallel compliance and disclosure framework that sits on top of existing regulatory and reporting requirements, without a clear demonstration that this added layer improves outcomes. In hydrogen and critical minerals, projects already operate under complex approval, environmental, heritage, workforce, and procurement regimes across multiple jurisdictions. The primary design objective should be to avoid duplication and ensure that reporting focuses on material matters relevant to the PTI mechanism.

In terms of additional information specific to hydrogen projects, AHC does not propose adding further content requirements at this stage. Hydrogen projects are typically early-stage and first-of-a-kind, with material uncertainty in project design, supply chains, workforce profiles, and schedules. Over-prescription at this stage risks creating compliance burden without improving community outcomes.

23. Do the reporting and publication requirements achieve a reasonable balance between industry obligations and community expectations? If not, what changes could be considered?

AHC does not consider the proposed annual reporting and publication requirements to strike an appropriate balance.

Community expectations are inherently diverse, politicised, and dynamic. A public-facing report regime should not be treated as the primary mechanism for ‘balancing’ community expectations against industry obligations. That balancing function properly sits with government; through the design of the PTI scheme, the statutory rules, and the governance arrangements that underpin compliance and integrity.

The proposed approach risks externalising an inherently governmental judgement (what constitutes ‘enough’ for eligibility and integrity) into an open-ended public contest. This increases reputational and political risk for proponents and, critically, creates uncertainty that can undermine investor confidence, particularly where projects are capital intensive and globally mobile.

We recommend that Treasury and responsible agencies explicitly leverage lessons from FMIA grant program implementation (including reporting and compliance models) before finalising PTI reporting settings. Unlike grants, the PTI is a tax-based mechanism commencing later (noting the intended commencement in 2027 for hydrogen), which provides an opportunity to design a streamlined integrity approach that:

• relies on existing regimes and standard corporate reporting wherever possible,
• limits duplication, and
• provides clear, investable standards that can be consistently administered.

Where public reporting is retained, AHC strongly recommends narrowing public disclosure to high-level, non-sensitive information, with detailed compliance materials provided confidentially to the administering agency.

24. Do you think the percentage reductions for non-compliance strike the right balance between incentivising compliance and providing certainty for investors to support investment decisions? If not, what would you suggest?

AHC is not in a position to provide a definitive view on the percentage reduction settings at this time, noting the constrained consultation period and the practical difficulty of testing these provisions with members during January shutdown periods.

From a policy design perspective, AHC emphasises that integrity settings must be calibrated to avoid creating disproportionate investor uncertainty – particularly where non-compliance relates to process, disclosure timing, or factors outside a proponent’s control – rather than substantive misconduct.

25. What are your views on meeting the criteria consistent with a satisfactory Statement of Tax Record?

We consider the concept of a satisfactory statement of tax record to be broadly reasonable as a baseline integrity requirement. Ensuring that claimants are appropriately registered, substantially up to date with tax lodgements, and not carrying material undisputed tax debts (or are operating under an agreed payment arrangement) is consistent with general expectations for recipients of significant government support.

26. What are you views on adopting the Voluntary Tax Transparency Code?

AHC does not have a settled position and recommends further consultation with industry, noting that the Voluntary Tax Transparency Code may not be equally applicable or proportionate across different corporate structures (including project vehicles) and may interact with existing corporate reporting obligations.

27. What are your views on having the Production Tax Incentive Community Benefit Report reviewed by a Registered Company Auditor?

28. If you are a Registered Company Auditor, what are you views on reviewing the Report?

We have significant concerns with the proposal to require review by a registered company auditor as currently framed.

Our understanding is that publication of an audited PTI CBP report would be a condition of receiving the PTI for a defined set of years. That raises two related concerns.

• Upfront auditing: in most tax contexts, claims are made through the tax system and are subject to review or audit if and when the ATO identifies a concern. Upfront auditing is not the norm. If the policy intent is to ensure integrity, that objective can be met through the existing tax administration model, where proponents make claims, the ATO is the regulator and assessor, audits are initiated on a risk or intelligence basis, and assurance is applied where it is actually needed. Applying a materially different approach to PTIs, whereby upfront audits are mandated, risks introducing cost and uncertainty that is disproportionate to the risk being managed.
• Mandatory publication: publication invites third-party judgement on subjective concepts and creates an implicit pathway for external contestation. Once that occurs, CBPs cease to operate as an internal accountability mechanism and begin to function as a quasi-regulatory regime, as we have argued above. That dynamic is problematic in grants, and doubly problematic in tax, where the ATO is the statutory regulator and compliance should be a bilateral matter between taxpayer and regulator. Third-party contestability has no formal standing.

Further, we note that third party challenge is not covered in the PTI guidance, but note that if CBPs are treated as quasi-regulatory in one domain it becomes increasingly difficult to argue that they should not operate the same way in the PTI context, particularly given the scale of public funding involved.

We are also interested to understand how an auditor is expected to provide a binary decision of accepted/not accepted in the PTI CBP context. While the guidance limits the auditor’s role to factual information, AHC notes that the majority of information required under Appendix E is not readily auditable without an expansive interpretation of ‘fact’. If the intention is limited to verifying discrete, objective factual claims (e.g., the existence of a policy document, a published statement, or numeric workforce data already reported elsewhere), then assurance requirements should be narrowly targeted and aligned with established assurance standards, with clear guidance on:

• what constitutes acceptable information for assurance purposes,
• the applicable assurance standard and level (reasonable vs limited assurance),
• materiality thresholds, and
• acceptable evidence sources (including reliance on existing audited disclosures where available).

Absent this, the auditor review requirement risks becoming an expensive procedural hurdle that does not improve community outcomes.