Peter Georgiou (WA, Pauline Hanson's One Nation Party) Share this | Hansard source

I rise to speak on the Offshore Petroleum and Greenhouse Gas Storage Amendment (Reporting of Gas Reserves) Bill 2018. Australia is blessed with a huge amount of natural resources. It's even in our national anthem: 'Our land abounds in nature's gifts'. There is also 'wealth for toil' off our coast, and we have massive reserves of petroleum available.

In 2018, we will export $35 billion of liquefied natural gas. We have become the largest exporter of LNG in the world. We allow companies to explore and produce the petroleum from our offshore reserves, and rightly so. These companies have invested hundreds of billions of dollars creating thousands of jobs for our workers. But let me make this point clear, because it is important: the true owners of these petroleum resources are the Australian people, and it is only fair that the Australian people get fair compensation for their resources. The truth is that the Australian people are getting ripped off, and here today I wish to outline this rort to the chamber.

Our offshore resources are contained in various fields. The Commonwealth government carries out zoning of these fields similar to a housing estate which might zone a big piece of land for various blocks. A company could come in and claim one of these fields by getting a retention lease. A retention lease would give that company exclusive rights to further explore and develop the lease area. The problem is this: there are a lot of retention leases out there and they are held by a select few big companies. There is a lot of potential for development, and yet not much development is occurring. All the while, the competitors of these select few companies are unable to get in and develop these fields themselves.

The evidence shows that some retention leases are being held up for 15 years with no development. That's 15 years of lost revenue and lost jobs for the Australian people. However, the worst part of these retention leases is the lack of information given by petroleum companies, especially to the Australian public. We have no idea what resources these companies have underground, what the value of these resources are, nor what payments are being made to various stakeholders. We have a problem with the transparency of petroleum companies. This bill solves that problem. It will make it compulsory for a holder of a retention lease to provide a taxation transparency report to the regulator. The taxation transparency report will tell the regulator what resources are there and how much they are worth. It will also tell the regulator what payments are made and to whom. It's not just retention holders that will need to provide a taxation transparency report.

The bill keeps information coming with petroleum production licence holders also subject to the same obligations. It's about ensuring we get a clear picture of the sector and then keep that picture clear. I understand that the regulator has some limited information already. This bill would give the regulator a clear picture with more detailed information. This is because one company will have to report for each retention lease or petroleum production licence it holds and not just one broad overview. The government tells us that the petroleum companies have done enough, that they are building some infrastructure and creating jobs, that they have paid fair compensation to the Australian people, but I don't think so. The infrastructure these companies build helps them make profits; it does not help the average mum and dad pay for their kids' education.

The jobs these projects create are only temporary. I have experienced firsthand the recent mining boom in my home state of Western Australia. I have toured the state from Karratha in the north to Albany in the south. I have spoken to local communities and listened to their stories. Everyone agrees that, yes, the petroleum companies created a lot of jobs in the construction phase, but when these projects were up and running, the work dried up. Many who lost their jobs also lost their homes because they couldn't keep up with mortgage repayments.

The government believes a few pipes here and there and a few thousand temporary jobs are fair compensation for this country's resources. It's a joke. We simply can't trust the government when it says Australians are getting a fair deal. We therefore can't trust the regulator, who takes directions from the government and implements its policy. This bill also addresses that problem. A key part of the bill is about bringing the Australian people into the discussion to stop the secrecy. This bill does this by requiring the regulator to put into its register all the information received in a taxation transparency report. It is even expected that the information on the register will be made publicly available. Finally the petroleum companies can come clean to the people of Australia, who can all see for once what they are doing. With information being made public, competitors can also consider that information. One company can say to the other, 'If you're not going to develop that field, we will have a go.'

Australian people pay taxes. Australians expect businesses to pay taxes. Australians expect the government to get a fair compensation for our resources. Let me ask the chamber if they think this is fair. Australia is set to overtake Qatar as the largest exporter of gas in the world, but we will receive a fraction of that revenue—$800 million—compared to Qatar's $26.6 billion. And that $800 million is not from our direct revenue stream, the petroleum resource rent tax; it is from other payments. The very real possibility that Australia, as it becomes the world's largest exporter of LNG, may never collect any direct payments from its natural resources is just simply embarrassing. Even countries that we give foreign aid to perform better on their resource revenue management than Australia. According to one report, Australia ranks 32nd in the word. We scored lower than—wait for it—Botswana, Niger and the Ivory Coast. That same report found Australia's tax transparency is worse than—again, wait for it—Burkina Faso, Cameroon and Mongolia. And the government sits there with a straight face and says that our transparency levels are fine and they don't need changing!

To those who might think from this that we need an urgent review of our tax system: we have already had one. In April 2017, the Treasurer released a report from the Callaghan review into the petroleum resource rent tax. That review exposed the flaws in our tax system. To provide some context, we give tax credits on exploration expenditure. If you pay money to explore, you have a tax credit. We know there is about $238 billion in tax credits that have already been issued, but companies are not required to file on the petroleum resource rent tax with the ATO until after production starts. This means that on top of the $238 billion in tax credits that we know about there are potentially hundreds of billions in additional exploration credits that are yet to be reported. It's when you have a look into the detail of these credits that the really scary stuff start to appear.

Firstly, these credits are transferable. You can shift them around to benefit your tax liability as much as you like. Secondly, these credits are able to increase in value by 18 per cent compounded annually. Thirdly, companies can hang onto these credits by holding onto them. These credits can nearly double their value over four years. With this system in place, petroleum companies have milked these credits for all they are worth and are effectively giving us nothing for our resources. By passing this bill the Senate will allow us to expose the petroleum companies that are playing games with our system to avoid any tax whatsoever.

This bill is nothing new. The US, Canada, the UK and the EU have all forced multinationals to report on payments on their production levels. All Australia would be doing with this bill is bringing us in line with these countries. It's a start. If we are to reform our taxation scheme we must start small. This bill is the first step on the road to fairer compensation. It is urgent that we start now and stop multinationals pillaging Australian resources for free. We must find a balance between the interests of the public, as owners of the resources, against the interests of companies, who need to make a profit. Make no mistake, the interests of the Australia people should come first. This bill includes relatively minor, simple and reasonable reform proposals. It's a small start to the larger changes that we so desperately need. So vote wisely, senators. Who knows, we may even overtake Mongolia.