Nick Sherry (Tasmania, Australian Labor Party) Share this | Hansard source

The Minister for Resources and Energy has provided the following answer to the honourable senator's question:

(1) The Department has not conducted, nor is it aware of, any cost-benefit analysis regarding the capped effective life for various categories of assets established by section 40-102(5) of the Income Tax Assessment Act 1997 (the Effective Life Provisions).

(2) The Department has not undertaken any work as to the effect of the Effective Life Provisions on investment decisions in the oil and gas sector.

(3) The Department is not aware of any requirement to meet social or environmental criteria or otherwise provide any specific benefit to the taxpayer or the Australian community in order for a taxpayer to apply the Effective Life Provisions in respect of their income tax obligations. That said, in 2009-10 the petroleum industry in Australia paid $1.18 billion in petroleum resource rent tax to the Australian community, which was in addition to the $3.98 billion in company and other taxes and $1.92 billion in excise and royalty charges (APPEA 2011).

In relation to environmental management, no operators may undertake petroleum operations in Australian waters without the appropriate operational and environmental approvals in place. Australia's offshore petroleum regulatory regime places the onus on the operator to demonstrate to regulators that all exploration for, and extraction of, petroleum resources are undertaken in a safe and environmentally responsible manner. All petroleum exploration and development activities in Australian waters are subject to the stringent environmental standards and reporting requirements set out in the legislation and associated regulations, including the Offshore Petroleum and Greenhouse Gas Storage Act 2006 and the Environment Protection and Biodiversity Conservation Act 1999.