Gas exporters face grilling amid 25 per cent levy push
Australia’s resources industry will oppose calls to overhaul the tax regime on gas sold overseas as producers face a parliamentary inquiry.
Representatives from Shell Australia, ConocoPhillips and Origin Energy will be urged by senators as momentum builds behind a proposed 25 per cent tax on gas exports.
It is planned to send only Shell’s top executive; The decision was harshly criticized by the Greens, who called on company chiefs to come forward.
On Tuesday, MPs heard from think tanks, economists, environmental charities and social service groups in general support for increasing taxes on gas exports.
The shortcomings of the Petroleum Resources Rental Tax, the federal mechanism for taxing resource profits for the gas industry, were well discussed in initial hearings.
Modeling from ethical investor Future Group shows Australia captures less than seven per cent of resource rents through PRRT, royalties and excise tax; It suggests that this figure is much lower than comparable income earned in Norway, Qatar and the United Kingdom.
Peak industry body Australian Energy Producers argues Australia’s tax regime for oil and gas is very different to that of Norway and Qatar.
Both countries share risks and rewards through government investments and supportive tax regulations that reduce upfront costs and provide fiscal stability.
The industry organization also defends taxes on oil and gas, saying the industry is the second-largest contributor to state income taxes.
The gas industry group argues that increasing taxes would deter investment in Australia and push companies to explore projects elsewhere, potentially jeopardizing the availability of domestic supply.
Officials from the Queensland Resources Council, the Business Council of Australia and several government departments will also be heard by the committee on Wednesday.
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