Unions propose 25% tax to generate $17 billion

“We only collect 43 cents in taxes for every $100 of gas we export.”

Data this week confirmed that the federal government is already 60,000 homes behind its target of building 1.2 million homes by mid-2029.

Labor overhauled the PRRT during its first term in office to bring forward tax payments that could have been deferred or eliminated by companies making legitimate deductions, such as the cost of building an LNG production facility.

Tax Office data this month revealed total revenue fell in the first year of the renewed tax; but the Australian Taxation Office said this would be much lower without changes that increased the number of companies paying the tax.

Even with changing regulations, the tax on $70 billion in revenue from LNG exports collected only $300 million in PRRT revenue in the 2023-24 fiscal year, O’Neil said.

One company without a PRRT payment was Chevron Australia, which operates the massive Gorgon and Wheatstone LNG projects in Western Australia.

But on Thursday, Chevron announced that it made its first PRRT payment in August and is expected to continue paying taxes.

In the just-completed calendar year, Chevron paid $5.1 billion in taxes, including income tax, royalties, excise tax, payroll tax and benefits tax.

Company chairman Balaji Krishnamurthy said the company has paid more than $20 billion in various taxes since 2009, while also spending $80 billion with joint venture partners to develop Gorgon and Wheatstone.

“Continued development of Australia’s oil and gas resources is critical for these benefits to continue,” he said.

Loading

“Attracting this investment depends on a stable and predictable taxation framework that balances the importance of providing a fair return to Australians with the significant commercial risk involved in the development of major energy projects.”

Australian Chamber of Commerce and Industry chief executive Andrew McKellar said the government should focus tax reform on ways to boost business investment and therefore increase productivity.

He said expanding the $20,000 instant asset write-off, which only applies to businesses with annual turnover of less than $10 million a year, should be a government priority.

The issue of cancellation was discussed at this year’s economic roundtable, but the cost to the budget of extending it to all businesses effectively killed the idea. But McKellar said the write-off would encourage firms to purchase key capital goods that would increase efficiency and reduce costs.

“If we are going to increase productivity, we need to increase the capital/labor ratio,” he said.

“The most immediate way to do this is to immediately delete the assets.”

Cut through the noise of federal politics with news, views and expert analysis. Subscribers can sign up for our weekly Inside Politics newsletter.