In a sign the Greens will press the government to rework its proposed reforms of the petroleum resource rent tax (PRRT),party leader Adam Bandt said on Monday that gas producers would benefit from the planned changes,rather than the nation’s taxpayers.
Greens leader Adam Bandt is signalling his party will press Labor for more changes to its planned overhaul of the petroleum resource rent tax.Alex Ellinghausen
It sets up another fight between the Greens,which are holding fast against the,and the government.
In this month’s budget,Chalmers revealed plans to raise through changes to the PRRT after years of investigation by Treasury and the Morrison government.
Currently levied on offshore oil or gas projects at 40 per cent of their taxable profit,the PRRT allows generous deductions for capital investments,raising questions over the revenue the tax raises compared with the billions reaped in profits by gas giants including Woodside,Chevron and Santos.
Under Chalmers’ proposal,a cap will be introduced from July 1 this year on the use of deductions,limiting the proportion of PRRT-assessable income that can be offset by deductions to 90 per cent. It will bring forward the potential PRRT revenue from offshore LNG projects,which are all based on Australia’s west coast.
But Bandt said details of the Treasury report used to support the changes showed they carved out a special arrangement for the North West Shelf,which is part-owned by five energy firms including operator Woodside.
Bandt said the carve-outs showed the proposed changes were written to protect the interests of Woodside,which he noted had made $2.3 million of donations to both Labor and the Coalition over the past decade.
“Labor is giving sweetheart deals to its corporate gas donors,robbing the public purse of revenue,” he said.
“Instead of making big gas corporations like Woodside pay their fair share of tax,Labor’s giving them a free pass.”
The North West Shelf project near Karratha in Western Australia.Supplied
A Woodside spokesperson said the company was a significant taxpayer,shelling out $2.7 billion in Australian tax and royalties last year of which $720 million was in PRRT and $926 million in federal royalties and excise.
“The North West Shelf remains subject to the PRRT regime. The North West Shelf’s main form of taxation has always been,and remains,federal royalties and excise,” the spokesperson said.
“The PRRT regime recognises this to ensure there is no double taxation of the North West Shelf.”
The PRRT changes will be the focus of a Senate estimates hearing in Canberra on Tuesday.
The Greens have proposed a massive overhaul of the PRRT. Its plan,worth $94.5 billion over a decade,would in effect wipe out carried-forward tax credits while requiring companies to immediately start paying PRRT.
While the Greens are demanding an expansion of the tax,the Coalition – which initially signalled opposition to the government’s changes – has suggested it could support Chalmers’ proposal in return for a streamlining of gas project approvals.
The North West Shelf actually pre-dates the creation of the original PRRT. The tax was extended to the project in 2012.
The shelf operates under the West Australian government’s reservation policy,which requires it to set aside 15 per cent of its production for the domestic market. Most of that gas is piped more than 1200 kilometres south to Perth.
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