Angus Taylor (Hume, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

by leave—I move amendments (1) and (2), as circulated in my name, together:

(1) Clause 2, page 2 (table item 4), omit the table item.

(2) Schedule 5, page 32 (line 1) to page 38 (line 23), omit the Schedule.

These amendments seek to split the Treasury Laws Amendment (Tax Accountability and Fairness) Bill 2023 in order to deal with the PwC schedules separately to the PRRT measure. The important point about this is that these issues are completely different. On the one hand, we have the PwC and Tax Practitioners Board issue, which rightly should be considered by this place. It's a very important issue in the integrity of our tax and tax administration system. On the other hand, we have the PRRT. These are completely different issues. Only this Treasurer could think that these issues should be considered in a single bill.

This is how Labor does it. It's 'wedgislation', as they like to call it, where they put two things together that have no relationship to each other, and where they know those opposite to them will have a different view on the two things. There's a simple way to resolve that: split them. That's how you do it; it's not that hard. You just split it in two, and we can vote separately on the two different issues. But that's not the case for this Treasurer. We all have to remember that he's not interested in the policy; he's only ever interested in the politics. He likes to call himself Dr Chalmers, for a doctor he is, but he's not a doctor of economics; he's a doctor of spin, a doctor of politics, a doctor who plays politics every single day of the week rather than focusing on the issues that need to be focused on for the Australian people. It's the sort of thing that we've come to expect from this government.

It's important to understand what is in this PRRT legislation, because those opposite have brought a taxation bill to this place more than 15 times, having promised they weren't going to raise taxes before the last election. I am sure that there will be many more of these situations, because the one thing we know about this government is that whatever they say before an election is completely different to what they do after an election. That was certainly the case in this instance and has been the case on issue after issue in relation to taxation. We know their minister opposite here is going after unrealised capital gains. He sees superannuation as his honey pot—he told us so. It's not the honey pot of the person who invested in it. It's not the honey pot of the person whose money it is. It's the honey pot of the Labor Party and the union movement. But that's how they see it. We see cynical legislation—'wedge-islation'—in this place time after time after time.

We wrote over 100 days ago to the Treasurer and to the relevant minister, the Minister for Resources, asking that they answer some very basic questions about this PRRT legislation. The proportion of forward estimates revenue that is additional and the model impact of the tax on investment are crucially important. The Treasurer is relying on these projects for his budget, and he won't even tell us what the impact is going to be on investment and the medium-term costing of the measure. We laid out four very commonsense, sensible proposals for improving the prospects for the gas industry, and what we've got back from those opposite is little more than nothing. They are not serious about the future of the gas industry in this country. They are not serious about the strength of the economy in this country. The only thing they are ever serious about is their own politics and looking after their mates in the union movement.

Stephen Jones (Whitlam, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

We won't be supporting the opposition's amendment. It is worth noting for all members of this House that the effect of the amendment will be to further delay changes to the petroleum resource rent taxation arrangements. To understand that, we need to understand the history of these amendments. They started way back in 2014, when, under the former government, they commissioned Callaghan to review the arrangements. That review found, unsurprisingly, that they weren't fit for purpose. The government has made it a priority to ensure that Australian taxpayers get a fair share of the resources that are available for now and future generations, and that's exactly what this bill is designed to do.

In the name of splitting the bill, the net result of that will be to delay that taxation benefit to the Australian people—to delay the Australian people getting a benefit from the resources that we all own.

Angus Taylor (Hume, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

Why have you taken seven months to come back with it?

Stephen Jones (Whitlam, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

The member for Hume complains that this bill has taken seven months, but let's not forget: the original review was initiated—

Angus Taylor (Hume, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

That's pretty quick for you, Jonesy.

Stephen Jones (Whitlam, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

by them back in 2014. So, if seven months is bad, is seven years something that deserves the condemnation of all members?

Angus Taylor (Hume, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

It's not our proposal. It's yours—it's your proposal.

Stephen Jones (Whitlam, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

So that's a seven-year delay and a priority for us. I know there is some issue that has been raised by the member for Hume.

Angus Taylor (Hume, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

But seven months is good for you!

Steve Georganas (Adelaide, Australian Labor Party) Share this | Link to this | Hansard source

Order! The member for Hume will cease interjecting.

Stephen Jones (Whitlam, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

The member for Hume raises the issue about bundling of these bills, and it is absolutely nothing new or controversial. It was a practice under them; it's a practice under us. For some further context, there are some 12 bills that are currently before the House, and collectively they contain about 40 different schedules. If we were to debate all of those as separate bills, the business of the House would quite simply grind to a halt. So this is about ensuring that we can maximise the efficiency and effectiveness of the time before the House, and that's exactly why we are moving these matters.

Two things that require urgent attention are addressing the matters that were uncovered by the PwC scandal—there was urgent action by us and no action by them—and addressing the findings of a review first commissioned by the coalition back in 2014 and acted upon by us to ensure that we have the taxation regime that is fit for purpose. No, we won't be supporting a further delay to resolving these matters, in the interest of the Australian people.

Allegra Spender (Wentworth, Independent) Share this | Link to this | Hansard source

I'd like to speak briefly on this amendment. I don't think I agree with the coalition about the reason why they want to split this, in terms of the PRRT. We have different views on the role of the PRRT bill, but I 100 per cent agree with the point that the coalition is making, which is that these are two very distinct issues and this is politics. I'm new to politics; I've been here for less than two years. But this sort of wedging is exactly the sort of problem the Australian people have with politics as usual. This is about political points; it's not really about the issues of the day.

I think these are two really serious issues. One is about an absolute abuse of power that had a huge detrimental impact on Australian taxpayers, and it's a really a serious issue—enormous taxation. The other is about the future of, again, the Australian taxpayers in terms of how they are paid for offshore gas. They are two completely different issues. They shouldn't be in the same bill. There are other ways that the government is perfectly willing to use—guillotining debate and other things—when they want to get stuff done. They had the opportunity to do this. This is pure politics.

Milton Dick (Speaker) Share this | Link to this | Hansard source

The question is that the amendments moved by the honourable member for Hume be agreed to.

Allegra Spender (Wentworth, Independent) Share this | Link to this | Hansard source

by leave—I move amendments (1) and (2) as circulated in my name together:

(1) Clause 2, page 2 (table item 1), omit "to 3", substitute "to 4".

(2) Page 2 (after line 11), after clause 3, insert:

4 Review of operation of amendments made by Schedule 5

(1) The Minister must cause a review to be conducted of the operation of the amendments made by Schedule 5 to this Act.

(2) Without limiting the matters that may be considered when conducting the review, the review must have regard to:

(a) the appropriate distribution of petroleum resource rents and the need to provide a fair return to the Australian community; and

(b) the appropriateness of the Petroleum Resource Rent Tax Assessment Act 1987 (as amended by Schedule 5 to this Act) and associated regulations in light of recent, and potential future, developments in industries subject to that Act; and

(c) the applicability of the review's findings to resource export industries not subject to that Act.

(3) The review must start no later than 1 July 2026.

(4) The persons who conduct the review must give the Minister a written report of the review no later than 1 January 2027.

(5) The Minister must cause a copy of the report of the review to be tabled in each House of the Parliament within 3 months after the day the Minister receives the report.

The petroleum resource rent tax is supposed to ensure that Australians get a fair return when their oil and gas resources are sold overseas, but the current system is completely broken. In the last couple of years, Australian LNG exports boomed as gas prices skyrocketed, with Climate Energy Finance estimating that gross profits of LNG exporters exceeded $63.5 billion in 2022. But, despite these profits and despite gas exporters being able to extract these resources without paying any additional royalties, the Australian people have seen little return. In the 2020-21 financial year, there were 33 projects eligible for PRRT, yet only six paid any tax. Even more shockingly, despite Australia being the second-largest LNG exporter in the world, the most recent set of budget papers noted:

… not a single LNG project has paid any PRRT and many are not expected to pay significant amounts of PRRT until the 2030s.

So the changes to the PRRT are welcome, and I appreciate the government taking action on this. It was well overdue.

But, sadly, the government has not gone far enough in these changes and reform. Whilst a few projects that would never have paid PRRT will now do so, the main impact of the bill is to bring forward a small amount of revenue a few years earlier, giving the budget bottom line a boost today at the cost of taxpayers tomorrow. It's not even as much revenue as you would think. The reforms were originally slated to bring in just $600 million a year over the forward estimates, despite gas companies bringing in an additional $20 billion in revenue in the last financial year alone, yet in the latest Mid-Year Economic and Fiscal Outlook this amount had shrunk even further.

The lack of significant reform on PRRT is not only a missed opportunity for the budget bottom line; it's a missed opportunity to fund the kind of cost-of-living relief that households desperately need right now. If the government lowered the deductions cap from 90 per cent to 80 per cent, it could fully fund a people power plan that permanently lowers power bills for nearly half a million households by turbocharging the uptake of rooftop solar, home electrification and improved home energy performance. The government has not yet taken this chance, but it must, and I hope it changes its way—at least in the Senate. I also want to put on record my deep concerns about the concessions the government are rumoured to be making to secure support in the Senate, which could result in massive expansion of the fossil fuel industry in the midst of a climate crisis. This would be a deep betrayal.

So my amendment asks the government to be open to doing things better in the future, to reviewing whether these new arrangements are delivering a fair return and to further reforming the tax if necessary. My amendment would insert a statutory review of the changes to the PRRT, to be commenced no later than 1 July 2026. This would allow two full financial years for the government changes to take effect and for it to become clear whether these reforms are delivering an equitable return to the taxpayer. Like the Callaghan review and the gas transfer pricing review, this review would examine whether the superprofits from our resources are being shared equally between the taxpayer and gas exporters. But, unlike these reviews, it would consider how learnings from reforms to the PRRT could be applied to the other resource export industries, which are increasingly important as our economy decarbonises. This is a reasonable and constructive amendment that would help deliver a fair return for Australian taxpayers in the future.

I'd like to make a further point, which is that we sent this amendment to the Treasurer's office back in November last year and I think it was only today or yesterday that we got a response or engagement on this amendment. I will constantly work with respect with members of the government on this and on any other amendments because they are made in good faith. These are challenges that I am making because I think they could be better, but I'm always open to having a conversation about these things. I was very disappointed not to get more constructive engagement from Treasurer or Assistant Treasurer on these matters, because they are really important and my community expects to understand, in a fulsome and time-appropriate way, what the government's position on this is and, if we have different views, why those are there so that we can engage constructively, perhaps to come to a middle ground.

Zoe Daniel (Goldstein, Independent) Share this | Link to this | Hansard source

I rise to support the amendment proposed by the member for Wentworth. This legislation is simply not good enough. It's not good enough for the government to bundle together a couple of random items and to expect a pat on the back from the parliament—in effect, a tick and flick. Put simply, this is an abuse of process and less than the voters expect from our parliament and its elected representatives. At best it's lazy, and at worst it's a deliberate attempt to underplay the significance of these two issues—one issue being imposing adequate taxes on our resources and the other issue being critically needed oversights on consulting companies, who've recently been exposed for their poor behaviour.

To be abundantly clear, I would prefer to see the bill split as proposed by the member for Indi in her second reading amendment. However, this amendment from the member for Wentworth would go some way to imposing some oversight on the proposed changes to the PRRT. There would be a review of the effectiveness of the changes to the act in line with recommendations from the Callaghan review instituted by the previous government. We would then know just how much is being returned to the taxpayer for exploitation of an asset owned by all of us: the fossil fuels deep underground and underwater. This is critical, and I remain deeply concerned that, at a time of cost-of-living pressure and a critical energy transition, when we need the revenue, we are way underdone on tax on export gas.

We also know that in the lead-up to the last budget the Treasurer had three options in front of him on the PRRT, and we discovered, courtesy of the AustralianFinancial Review, that he chose the option that the gas producers wanted. Four vulnerable seats in Western Australia may have had something to do with it, and also the fact that Woodside appears to have a stranglehold on public opinion in WA and that its media are the most concentrated in the country and enablers of the fossil fuel lobby. This is not the way to make policy affecting the whole nation. At budget time, the government estimated that its new approach would raise no more than $2.4 billion over the next four years, and it now turns out that it won't even do that, as, in the Mid-Year Economic and Fiscal Outlook, the Treasury revised the estimates, revealing that it will be much less than originally predicted. The AFR also calculated that at current prices the second option that was offered to the Treasurer would have brought in $21.9 billion in 2023-24 alone, but, instead, as the paper put it back at budget time:

The big gas producers can go back to what they do best—exporting huge amounts of Australian gas and printing money …

This bill is not a good illustration of the government's supposed aims to restore public confidence in the way that policy and legislation is done. I have had this conversation with the Assistant Treasurer. I have made very clear that I think the bundling together of these two entirely disparate matters is not good process. I think the bill should have been split. Given that the government will not tolerate that and does not find it palatable, much as I think the vast majority of the Australian people would, I definitely support the member for Wentworth's amendments.

Stephen Jones (Whitlam, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

I want to thank the members for Wentworth and Goldstein for their contributions. I acknowledge that they have engaged in good faith on these measures, including the amendments, and other bills that have come forward in my portfolio before now, and I look forward to them continuing to do so. I also note that people can engage in good faith and, frankly, just disagree, and this is one of those occasions.

Briefly, the reasoning for not supporting the amendments is this: this package of laws has come forward as a result of two separate reviews, the first of which was initiated back in 2014. We want finality and certainty. We've implemented the change. We've looked at all the competing views and forces. Frankly, in the community and even in this parliament there are people who want more gas, there are people who want less gas and there are people who want no gas and, therefore, no revenue arising out of the gas. I think that's a fairly accurate summation of the views right across the chamber. We're trying to strike the right balance, and we believe the 90 per cent deductions cap strikes the right balance in ensuring that we have sufficient gas supply, particularly for the manufacturing industry in Australia, for as long and until we have a viable economic alternative energy source, particularly for those sectors. For the Australian people, it means that we'll get more revenue sooner and provide certainty for industry. I don't believe that the amendments moved by the member for Wentworth will deliver on that objective. Parliament is ultimately the reviewer of all measures and bills that come before this House and will continue to do so.

Milton Dick (Speaker) Share this | Link to this | Hansard source

The question is that the amendments moved by the honourable member for Wentworth be agreed to.