Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Hansard source

All right, it was 30 years ago—quite right. There was a lot of give and take to make sure it could get off the ground. And you know what the North West Shelf project agreed to as part of its side of the bargain? That it would pay secondary taxation revenue to the Commonwealth and to the states on production from the word go. The reality is this: this is totally different to what happens to any other offshore resource project of this nature today. Here you have a major capital intensive project—with initially $12 billion on the table, now up to $25 billion on the table—which needs certainty in terms of the fiscal arrangements that apply to it. They have obviously got certain assumptions in terms of what the cost structure is that they are operating within. Then the government unilaterally changes their side of the bargain. They are quite happy that the North West Shelf paid significantly more tax in the early stages of the project, because then later, as soon as they might be able to benefit from some upside, we will just hit them with another $2½ billion tax whereas all the other projects are able to deduct all of the allowable expenditure—exploration expenditure, capital investment—and they pay a tax on net profits.

This goes to the integrity of the government. Essentially, for the last three or four months they have been telling the people of Australia that the North West Shelf gas project is enjoying an unfair taxation advantage. The minister today has exposed that assertion as a fraud. Who is going to have to pay the price for it? The people of Western Australia. That is the second thing that Treasury did not do any modelling on. Did Treasury do any modelling to satisfy itself that there will not be any flow-on consequences in terms of the price of gas or electricity in Western Australia? Did it? No, it did not. This is absolutely incredible. Minister, I ask you this very specific question: what modelling has the government asked Treasury for to satisfy itself that its assertion that the North West Shelf gas project enjoyed a taxation advantage compared to other similar projects was substantiated?