In short:

Signs of division have emerged between Peter Dutton and Angus Taylor over whether to back taxpayer subsidies for critical minerals.

The issue is particularly sensitive in WA, where Mr Dutton has recently been seeking to shore up support.

What's next?

The Coalition's position will determine the pathway forward for the government's $22 billion Future Made in Australia plan.

The Coalition is jostling to land a united position on the federal government's planned deployment of taxpayer funds for critical minerals projects, having originally panned the idea as "billions for billionaires".

Signs of division have materialised in recent days with Opposition Leader Peter Dutton and Shadow Treasurer Angus Taylor sending mixed messages on whether they support Labor legislation to spur the development of projects such as lithium processing.

The plan is particularly sensitive in WA, a political battleground state that effectively delivered Prime Minister Anthony Albanese his majority at the 2022 election and where concern is growing over the resilience of miners in the face of global competition.

With major producers like BHP and Fortescue shedding workers in the west, Mr Albanese's cornerstone Future Made in Australia legislation, currently before the Senate, promises to push billions of dollars in federal production tax credits to miners.

The assistance would be used to develop critical minerals projects that are being battered by collapsing global prices for key commodities, which are dominated by China.

Challenged on RN Breakfast on Thursday to identify areas where the government should stop spending money to lower inflation, Mr Taylor nominated "corporate welfare initiatives".

"We're talking about giving money to big miners and others, as Labor is proposing to do with their policies."

"What we need to do is get back to basics," he said.

"There is no point talking about throwing government money around when you can't build things competitively in this country".

Following the comments, the Association of Mining and Exploration Companies called for clarity from the Coalition. 

"Angus Taylor couldn't be clearer on radio this morning that he does not support the production tax incentives. We can only assume either he is at odds with his leader, or there has been no softening of the opposition's position," chief executive officer Warren Pearce said in a statement.

Coalition looking to rebuild support in the West

The comments are at odds with Mr Dutton's remarks this week on the sidelines of a major resources industry conference in the WA town of Kalgoorlie, in which he indicated he was having "respectful" talks with "significant players".

"There are some who are in favour, some who are against it, some who advocate for a better way for support and assistance to be provided," Mr Dutton said.

"In the end, we've got finite tax dollars. I want to make sure that we can provide support."

"We'll have more to say about ways in which I think we can provide support to some of the sectors."

Industry observers said there were tensions in the Coalition's position on industry support, particularly in WA where Liberals were still smarting from their 2022 losses.

Liberal seats were lost to Labor and independents after former prime minister Scott Morrison was branded as anti-WA for joining forces with billionaire Clive Palmer to launch legal challenges against the state government's pandemic restrictions.

"The Clive Palmer factor is in the back of their minds," said one Coalition source.

Planned measures to support future mining and manufacturing industries that are expected to be vital to the emerging global green energy transition have been criticised by some economists and the Productivity Commission.

They warn such market intervention will lead to wasted public funds and entrench "rent-seeking" behaviour.

By contrast, Labor's $22 billion Future Made in Australia plan has been warmly welcomed in WA.

Supporters say production tax credits would be a game changer because they free up cash for exploration and development by lowering the amount of capital needed to get projects up and running.

The Perth-based Association of Mining and Exploration Companies, which represents more than 580 firms, has strongly backed the legislation and says it is vital to ensure Australia can remain internationally competitive.

"Australia must act fast if it is to capture the market share of decarbonised minerals and metals processing before the capital is invested in other emerging markets," the association said last month in its submission to a Senate inquiry into the legislation.

While many members of the Coalition are ideologically opposed to "corporate welfare", the political reality may force them to adopt a policy of qualified support.

This could include "significant guardrails", according to one source, that limit participation by foreign firms, particularly from China, thereby satisfying national security concerns.

Furthermore, a modified policy would enable the Coalition to land a solution that does not hurt their political stocks in the west, while backflipping on their original opposition to corporate welfare.

The Coalition's position on Future Made in Australia will be a critical factor in whether the government ends up negotiating with the Greens and crossbench for passage through the Senate.

Rejection by Mr Dutton and Mr Taylor would almost certainly force Labor to consider Greens demands to inject climate considerations into the legislation.