Nola Marino (Forrest, Liberal Party) Share this | Hansard source

I rise to speak on the Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Amendment Bill 2010 and the Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment (Miscellaneous Measures) Bill 2010. These two bills implement policy and technical amendments to the existing offshore petroleum and greenhouse gas storage legislation, much of which began under the coalition government. The safety levies bill provides transitional arrangements retrospectively from 1 January 2010 until 31 December 2012 to impose a safety case levy in relation to designated coastal waters. This transitional period will give the states and the Northern Territory time to implement corresponding amendments and for the safety case levy to be collected through the National Offshore Petroleum Safety Authority in the interim.

The coalition supports the transitional measures in the safety levies bill. However, the miscellaneous measures bill contains a number of amendments which are of major concern to Western Australia, to Western Australian members of parliament and, most significantly, to the Western Australian government and people of our great state. Part 1 of schedule 1 will see the Commonwealth retain industry registration fees from 1 July 2010 under the Offshore Petroleum and Greenhouse Gas Storage (Registration Fees) Act 2006. For practical purposes, the retention of the registration fees by the federal Labor government will see $15.3 million removed from the WA state budget in 2010-11 and $7.7 million removed in 2011-12. It appears to us that this is just the latest federal Labor government attack on the WA economy as a cash cow to help pay off the government’s debt and deficit and, by default, prop up the economies of the failed Labor state governments.

We are very well aware of the strength of the resources and agricultural sectors in our state of Western Australia. Madam Deputy Speaker Moylan, as you would know very well from your electorate, WA produces 40 per cent of the nation’s wheat and exports 60 per cent of the nation’s wheat, providing 35 per cent of Australia’s export wealth. Agricultural exports have been a key driver and a very major factor in keeping Australia from recession. The Labor government is expecting WA to keep delivering to the federal coffers via the resources and agricultural sectors in spite of providing a mere seven per cent of recent infrastructure spending in WA itself. This compromises the very growth the federal government is relying on to drive the national economy.

My electorate, the south-west area of Western Australia alone, needs at least $750 million for immediate infrastructure to deal with capacity and productivity constraints in roads, rail and port facilities. This comes on top of plans by the government to strip $443 million from WA’s share of the GST funding next year while—again—the failed Labor state of New South Wales will be rewarded with an additional $277 million, and Victoria with an additional $223 million.

Recent data quoted by the WA state Treasurer shows that WA contributes $8 billion more to Commonwealth revenues each year through company tax, personal income tax and petroleum revenues than it receives back from the Commonwealth in grants and other expenditure benefits. As we know, WA has 10.4 per cent of the population but also has the highest growth rate in Australia of over three per cent—well above other states. By majority, this is driven by the major resources sector—something that I believe is not clearly recognised or valued by the federal Labor government. This is why I am also sure that the WA state Treasurer, Troy Buswell, will make very strong representations to the Commonwealth Grants Commission, given the effects of strong population growth on the state’s capital works program.

The long-awaited Henry tax review that the Labor government is failing to release—at least prior to the election, it seems—proposes to scrap state based mining royalties and replace them with a federal resources tax. We in Western Australia are very aware that these royalties are really critical to ongoing development of local mining communities in our resource-driven state.

The next attack on the WA economy by the federal Labor government will come from the proposal to further strip the state of GST to fund the promise on the public hospital system. I note this has come under fire, as reported in the Age by two senior health leaders. John Deeble, the co-architect of Medicare, said the government’s $50 billion reform package ‘is largely spin’; and Professor David Pennington, who headed the National AIDS Taskforce, is quoted as saying, ‘The plan would leave many hospitals in dire straits’. I also note that Ken Baxter, the former head of the premiers’ departments in NSW and Victoria, has warned that GST would have to increase from 10 to 12½ per cent to pay for the Labor government’s health plan. The federal health minister has also agreed that tax increases may be necessary.

The resources sector is clearly a driving force in the Western Australian and Australian economies, and as this legislation will have a major impact on the Western Australian petroleum industry it will have a major impact on the WA economy. As the Deputy Director-General of the Western Australian Department of Mines and Petroleum, Stedman Ellis, stated in a presentation on 3 February 2010, ‘Petroleum projects cross boundaries from Commonwealth waters, state waters, islands and mainland areas, with industry most affected in WA.’

Approximately two-thirds—close to 70 per cent—of Australia’s offshore oil and gas resources and over 80 per cent of offshore titles are based off the coast of WA. Data from the Western Australian Department of Mines and Petroleum shows that the state’s petroleum sector grew in value by nine per cent to $21.3 billion in 2008-09. The total sales value of this sector, which includes crude oil, condensate, natural gas and LNG, represents around 30 per cent of the total value of WA’s resource industry. The estimated total value of WA’s minerals and petroleum resources sector for 2008-09 was $71.31 billion. Projected growth in global energy demands are at least 30 to 40 per cent by 2030, and that will increase this value.

We have all seen the $43 billion Gorgon project announcement off the coast of WA. It is Australia’s largest offshore LNG find, with an estimated economic life of at least 40 years and with construction due to start next year. And the historic North-West Shelf projects like Pluto, Wheatstone and Browse are significant contributors to the Western Australian economy.

The WA Department of Mines and Petroleum was recently asked to comment on the amendments included in this specific legislation. In their response they highlighted their very serious concerns relating to the establishment of a National Offshore Petroleum Regulator, and therefore cannot agree to the proposed legislative amendment for the Commonwealth to retain the registration fees. In addition, the loss of revenue for WA will come at a time when the state is being required to commit funding to infrastructure development for Gorgon and other major projects.

Western Australia also considers that the respective functions and powers of the joint authority and designated authority need to be very clearly defined and should remain in the OPGGSA. There is concern that this amendment could diminish WA’s functions and powers as regulation changes have less stringent requirements compared to act amendments. However, the Western Australia Department of Mines and Petroleum is supportive of, and has previously recommended, the inclusion of non-OHS structural integrity of facilities and pipelines as part of NOPSA’s responsibilities.

The WA government, like the coalition, believes that there needs to be further consultation on this legislation—and we believe the Senate inquiry will expose further flaws within the legislation itself. Under a National Offshore Petroleum Regulator industry will pay additional costs to set up the NOPR and will maintain regulatory expertise in the Commonwealth and state regulators. The national regulatory models also remove two very important issues: the states’ facilitation role and the local knowledge from regulatory decisions, and will result in a split regulatory regime. Companies will have to deal with a statutory authority and not directly with ministers.

Given the significant impacts these implications will have, particularly on the Western Australian petroleum industry, I believe that the WA government and other stakeholders should be given the opportunity to put publicly their concerns on the record about the measures contained in this legislation through the Senate inquiry process. As I said earlier, the inquiry will more fully examine the immediate and longer term implications of the measures contained in this bill—something very dear to both your heart and mine, Madam Deputy Speaker Moylan, particularly from a Western Australian perspective.

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