Graham Perrett (Moreton, Australian Labor Party) Share this | Hansard source

I rise to speak on the Offshore Petroleum and Greenhouse Gas Storage Amendment (Cash Bidding) Bill 2013. I commend the member for Parramatta on her contribution. I know that she is passionate about this topic. She is forever talking about hydrocarbons, and the pricing and extraction thereof. I have been in parliament for six years and have spoken on hundreds of pieces of legislation. Some of those were momentous, some exciting. This legislation is neither of those, but it is an important piece of legislation, supported by both sides of the House, in terms of ensuring that the Australian public receive the best possible return for the resources that they own. In fact, I would suggest that much of this legislation borrows elements from the Queensland Mineral Resources Act, a piece of legislation I know a lot about, having worked in that area in another life. It takes many of the competitive bidding characteristics from the Queensland legislation, so I am very familiar with that side of the legislation.

The purpose of the bills is to amend the act to provide a new model for allocating cash-bid exploration permits in the offshore petroleum regulatory regime. For those listening at home, the Commonwealth has control over the resources under the ocean and states have control over the resources on land. That is the way cooperative federation works. If we look back over the years there was much heated debate in this parliament when the states and the Commonwealth were working out that divide and how it was going to do it. In fact I think a previous member for Moreton, Sir James Killen, received a lot of attention over some of the sorting out of that process. The debate was nice and cold at the time—if you read the Hansard from the time at which we were working out the Petroleum Resource Rent Tax, it was going to be the end of society as we knew it. Obviously that piece of legislation has resulted in $25 billion to $28 billion going into the coffers of the Commonwealth government.

Sadly, today we are having a similar debate about the MRRT. I understand that those opposite took that to the election and in their electorates they received confirmation that it is important that Gina Rinehart be given extra money. On this side of the chamber we support the idea that if super-profits are being made they should go to the Commonwealth. If super-profits are not being made, then obviously the tax is not being paid. So we are still passionate about the MRRT.

Nevertheless, in regard to the bill in front of us, in November last year the Gillard government announced the decision to apply the cash-bidding title allocation method for select blocks, as released in the 2014 offshore petroleum exploration acreage release. This is sort of like the way the gold rush was handled in days gone by, where it was said that you needed to put in a bid and stake out a claim. Obviously you just cannot stick up a flag like they did in the Klondike, as offshore exploration is a bit more complicated. You have to be able to put a deposit down. They set a reserve price so that speculators or carpetbaggers would not come in.

I think this method of ensuring we receive the best return on our resources is the envy of the world, although with the number of metres of drilling the Canadians are doing at the moment they have established a couple of factors that Australia needs to lift its game on. Where they have it over us at the moment is on the Australian equivalent of flow-through shares. I think it is still the Labor Party position that we would achieve this, even though it did not come in during the six years we were in office. The reason the cash-bid exploration permit process works is because of the great resource we have in Geoscience Australia. They have some of the best, if not the best, data in the world, which they are able to sell around the world at fairs and markets. The way that they do it is a lesson in federation, in that the individual states, although they are competitors, go to the rest of the world and offer an Australian product. I wish tourism would take a ticket out of this process. It is a situation where, even though northern New South Wales is competing against Queensland, Victoria and Western Australia, we need to have one brand. I can see the member opposite nodding. I think it is something we need to work on a bit more: that we have that one recognisable brand. Rather than poor old Maroochydore going and trotting themselves out to the world, we need that Australian brand. But I think Geoscience Australia, despite the states competing for explorers, miners and capital, are able to go to the world and sell this information in such a way that for the last 20 years they have been able to sustain a level of investment that is the envy of the world.

There are a few grey clouds on the horizon and there are some bad decisions coming our way—I see Rio the other day announced that they are rethinking their capex in Australia, and a few other mines and exploration projects are on hold at the moment—but nevertheless this legislation, which is supported by both sides of the chamber, is all about making sure that we receive the best possible price. How do we do it? The independent review of the act said the cash-bidding model needed to be tweaked, so the proposed amendments to the existing cash bid exploration permit allocation model have the following key features. They limit the discretion to refuse an offer of a permit made by the joint authority. The failure of the highest bidder to accept an offer results in the 10 per cent deposit paid by the bidder as part of the cash bid being forfeited to the Commonwealth, so it hits corporations in the wallet if they are not able to carry through, and that money must be paid within 14 days rather than 30 days. There is also something that I am particularly supportive of: even though capex is tapering off in the mining industry, there is a reserve price. So the joint authority—

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