PM cool on gas tax as companies prepare for grilling
The prime minister gave the strongest signal that his government will not impose a new tax on the country’s gas giants in the May budget.
While calls for the Labor Party to impose a 25 percent tax on the liquefied natural gas sector, which will make huge profits from the increased prices due to the Iran war, are increasing, Anthony Albanese talked about the tax contribution of the sector.
“They’re paying about $22 billion… you have to accept the investment of tens of billions of dollars to extract the gas,” he told ABC’s Afternoon Briefing programme.
“If it wasn’t for the investment coming from North America, the investment coming from Japan… we wouldn’t be having the discussion because this extraction wouldn’t happen.”
Pressed on pushing for a new gas tax, which is supported by some Labor MPs, Mr Albanese said he would not make a decision on whether anything would go in or out before the May 12 budget.
Woodside, Chevron, Santos, INPEX and top Australian Energy Producers are expected to argue new taxes on the sector will stifle investment and cost jobs when they face a Green-led senate hearing on taxing gas supplies on Friday.
“Stability in financial environments is critical for Australia to remain competitive,” Chevron’s submission to the inquiry said.
“Imposing additional taxes on LNG exports will increase perceptions of country risk and further reduce Australia’s long-term investment attractiveness.”
Some gas companies have defended the Oil Resource Rental Tax regime, which has been criticized for generating too little revenue from resource companies.
However, INPEX’s presentation suggested that this was by design.
“The absence of PRRT payments in the early years of major LNG projects reflects intended design and phasing, not tax avoidance,” he said.
The Japanese oil and gas company said the system was designed to generate more tax revenue when projects mature and become more profitable.
Also scheduled to testify is Climate Analytics, which argues that the energy crisis presents a rare opportunity to take more assertive action against global warming.
“Changes to Australia’s taxation regime to support a controlled reduction in fossil gas use would be broadly beneficial to the climate,” the advocacy group said in its submission.
But the organization said any changes should not only be aimed at capturing wartime windfall profits, but should also lead to structural changes in Australia’s dependence on fossil fuels.
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