Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Hansard source

Thank you, Acting Deputy President Reynolds. I happened to be over in your home state of Western Australia only a few weeks ago for a very important Senate inquiry which I initiated into the petroleum resource rent tax. That particular day—Senator Smith put in an appearance, if I remember rightly—we had some of the CEOs of the biggest oil companies in the world, operating out of Australia, come and give evidence on why they do not want the petroleum resource rent tax changed. You were also there, Senator Reynolds, I understand.

What was interesting about that day was two other things that happened that morning. The first thing that happened was the government released its own internal review into the petroleum resource rent tax at the exact time—9 am—that the Senate inquiry began. So none of us had time to read the government's review. Nevertheless, we had good evidence from companies. The second thing that happened was that the Prime Minister, Mr Malcolm Turnbull, released the concept that he may some kind of gas reserve or gas price here. What did the big petroleum companies do, both in the media and at the inquiry? They screamed blue murder. Why? It is simple: they do not like being told by the government what they should and should not do. They have not had a government interfering in their business in this country for many decades now.

Let me give you a good example. The petroleum resource rent tax came in in the 1980s. It was a tax designed essentially for petroleum products. Pretty much the only people that pay it in this country now are BHP and the international subsidiaries of multinationals that operate in Bass Strait. Although it was designed for petroleum products, it is mostly applied now to big LNG projects, the massive projects off the North West Shelf in Western Australia. Because it is so incredibly generous in the concessions that it gives these big companies, each year they get to compound all their exploration expenditure at 15 per cent plus the bond rate and every dollar of their operations expenditure at five per cent plus the bond rate. The situation we have in this country now is that $238 billion of tax credits are sitting amongst the big petroleum companies, so they do not want to change the petroleum resource rent tax.

Why is the government not stepping in and saying: 'That is a massive source of revenue. All we need to do is tweak those uplift rates and we'll bring in tens of billions of dollars'? This is the punchline: the government—and it is not just yours, Acting Deputy President; it is previous governments as well—are only interested in two things, and this applies directly to the gas policy here in this country. The first thing they are interested in is investment and the raw dollars they are bringing in investment into this country because it helps to balance the payments and the current account figures. Of course, that contributes to GDP growth, so those big numbers are important. Secondly, they are interested in jobs. They are interested in jobs that are attached to these investments. Are they interested in getting the taxpayer of Australia a good return on the resources that we essentially give to these companies? No, they are not.

So I ask the question: why are not we getting a bang for our buck? We are selling the gas, the oil, the condensate and the other products to these big multinational companies, right? That is what a royalty is. Incorrect. Under the PRRT, they have now clocked up $238 billion of tax credits. That means that the $238 billion of revenue that they may earn in the future they will not have to pay tax on because of these extremely generous concessions that have been in place now for decades.

But no-one wants to change them, because governments are interested in only two things: investment numbers in the current account and jobs. Well, if we actually took a far-sighted view or policy prescription we would say, 'No, we need a fair return as well on the resources that are owned by Australian people, and we need a fair policy for our domestic gas markets.' But that would require courage from the government to actually take these people on, and that is not something I have seen from the big parties since I have been in politics. On top of that, we have these layers of trade deals that make it extremely difficult for government to be discriminatory at all against foreign producers.

In fact, it attracts state-to-state dispute settlements as well as investor-state dispute settlements. Even in my home state of Tasmania, there was a furore when the price of rock lobsters went to over $100 a kilo because they were all being exported. Suddenly all the local restaurants and local punters had to pay that kind of money for their own rock lobsters. So, it is not just gas. This is the global world that we live in, and if the free market is our religion and our ideology then we are never going to change any of this. So, I think the government needs to be pushed and actually look at this, much more importantly, from a long-term perspective— (Time expired)