Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Hansard source

I thank all of those who have contributed on the Tax Laws Amendment (2009 Measures No. 3) Bill 2009. A number of issues have been raised by Senator Ludlam, and I would like to address them as best I can. The policy rationale for the offshore exploration incentive is to encourage firms to explore in high-cost, high-risk frontier areas. Without this incentive, firms will place even greater emphasis on exploring around existing discoveries or more accessible areas. The offshore exploration incentive is a modest concession for two reasons. First, the incentive is confined to the petroleum resource rent tax. This means that firms only benefit from the incentive if they have an existing offshore petroleum project paying PRRT or develop a new petroleum project which is subject to PRRT sometime in the future. Second, the exploration permit areas eligible for the incentive may only constitute a maximum of 20 per cent of exploration permit areas released in a year. For the 2009 offshore acreage release, the proposed number of exploration permits eligible for the incentive is six, compared with the total number of permits released, 33. I hope that answers many of your questions, Senator Ludlam. I thank the chamber for its indulgence.

Question agreed to.

Bill read a second time.