Matthew Canavan (Queensland, Liberal National Party, Minister for Resources and Northern Australia) Share this | Hansard source

As I mentioned in my comments on the Petroleum Resource Rent Tax, that is a profits-based tax that has been around since the 1980s. We are looking at that tax at the moment and doing a review; and so it would be inappropriate for me to forecast or to suggest right now what changes we would make. Suffice to say, any move to a volume-based tax would not necessarily achieve what we want. Of course, a volume-based tax would simply be on the production and have no relation to the profit that is received on a particular development. It could potentially harm particularly marginal developments—but if those developments that might not make a lot of profit—very unfairly and choke off the very investment that we want to achieve.

It is generally felt that a tax based on profits is more efficient. That is why the Commonwealth government moved to this regime in the 1980s and that is why the former Gillard Labor government extended that to onshore areas a few years ago. That regime means that we take our share once there are profits there and that, of course, helps encourage private investors to come here knowing that they can make a profit and a return, which they legitimately should be allowed to do, and then just pay a share back to the Commonwealth government. There are whole lot of details about how that tax system and regime work, notwithstanding the general idea that a profits-based tax is the best way forward. That is what this review is looking at. I am happy to engage the senator with this review and on those particular details.