Lisa Singh (Tasmania, Australian Labor Party) Share this | Hansard source

I join with Labor in opposing this senator's proposed amendments to the Offshore Petroleum and Greenhouse Gas Storage Act. In doing so, I join with Senator Carr in acknowledging that the Offshore Petroleum and Greenhouse Gas Storage Amendment (Reporting of Gas Reserves) Bill 2018 is ill conceived and does not go anywhere near addressing some of the issues that need to be addressed when we talk about the extraction industry. Looking at transparency in particular, Labor has a better way, a better plan, and one that, of course, would be wholly consulted with by industry.

The first point to address when we look at the bill before us today is it was developed without any consultation with the opposition. If I could offer any advice to the senator, it would be that, when you bring forth a private senator's bill, one thing that is worth doing is talking to the parties in this place that you wish to get support from for that bill. Whether it be the government, the opposition or some of the other crossbench senators and minor parties, you would think you would talk with all, if not at least more than half, of them if you wanted to get your bill through the Senate. However, there has been absolutely no word from the senator to the opposition regarding consulting with us on this particular bill.

Further, the senator has also not consulted with industry. If you're going to bring a bill into this parliament to change a particular industry, you would think that the party and the senator in question would pick up the phone or even write a letter or an email—anything—to inform that industry of their intentions and what it is they're trying to change in the industry to somehow make that industry better, if that is the intention. But that's not what's occurred here. The result, as Senator Carr said, is very much a blunt instrument that shows a lack of understanding of how Australia's offshore resources industry works, how our tax system collects revenue from such an industry and what the role of the National Offshore Petroleum Titles Administrator is. These are fundamental issues that must be addressed but are simply lacking in this particular piece of legislation.

This bill would require offshore resource companies to provide information that either doesn't exist to start with or can't be provided because the tax is paid on a licence basis. What is this party trying to achieve in bringing forth amendments of this kind that require such information? Does it even understand what it's trying to achieve? It seems to me that the information it's trying to extract through this legislation is impractical, and any information provided would prove to be useless and unreliable because income tax is paid on a company level and the petroleum resource rent tax is paid on a project level. The key point that Senator Carr highlighted in his contribution was that tax is not levied at a licence level.

I also note that licence fees, which the bill seeks to make public, are already published by the National Offshore Petroleum Titles Administrator. This bill also seeks information about royalties and tax paid on revenue earned by retention leases, but a retention lease is not a resource that is producing revenue. In many cases, the resource might never become economical to develop. A retention lease seeks to retain an asset whilst doing work to make the development stack up. Companies do not pay royalties or tax on retention leases. Again, I think this shows a lack of understanding as to how the industry operates and what its requirements are from government. Under a retention lease, there is nothing to pay royalty taxes on. On top of these awkward requirements in this strange amendment, the bill would also force this information to be provided to and published by the National Offshore Petroleum Titles Administrator. But, again, I think this demonstrates a real failure to understand the role of the Commonwealth's Offshore Petroleum Titles Administrator.

I'm not sure what the senator was trying to achieve, but if it was transparency, Labor supports tax transparency. We very much support tax transparency for our extractive industries, and we have been highlighting that for some time now. My colleagues in the other place highlighted in great detail last year—and I'll go into some of that shortly—some of the areas where Labor would propose a plan to ensure tax transparency in the extractive industry, but this is not the right way to go about achieving that. We certainly don't support this two-tiered system where offshore gas and oil companies are under a different obligation to disclose their payments to government than their onshore counterparts, for example, and other onshore resources companies generally. It's just ludicrous to have two different arrangements for the one industry.

This bill would also require offshore resources companies to provide the National Offshore Petroleum Titles Administrator with estimates of the size and value of resources within varying licence areas. I understand this information is already provided and is available to government. We need to consider the fact that offshore resources companies have invested a lot of money in exploration and research. This is very commercially sensitive information. Releasing it would, in some senses, create an unfair advantage for their competitors and make it harder to develop resources in the future. Indeed, it could damage the industry.

Having said that, I want to go to this issue of transparency, which is something that Labor is very much a strong supporter of and has been highlighting as a way forward. I think that the senator could actually learn something from Labor's approach, because our approach, as an alternative government, is very well considered and researched and we have consulted. Our approach is based on the betterment of our country, for the industry and for those people affected.

I want to share with the Senate a contribution that was made by the member for Kingsford Smith, Matt Thistlethwaite MP, when he addressed an ACFID, Australian Council for International Development, conference, which goes to the heart of what I think is important when we talk about the extractive industry and when we talk about transparency. I'll start with what he highlighted. He talked about a town called Komo in Papua New Guinea's Hela province. In that town, there is a newly built hospital that has never been used. It has no beds, no staff and no electricity. Around the hospital is the Asia-Pacific's largest gas extraction project, a $19 billion Exxon Mobil and Oil Search joint venture LNG project. Proponents of this project promised it would improve the living standards of local communities, transform the PNG economy and boost GDP. But none of this has occurred. Just recently, the PNG project reached record productive capacity of 7.9 million barrels of oil equivalent in the period of three months up to October last year, with work to expand the project ongoing.

As we know, many of the world's poorest nations are endowed with minerals and resources of significant market value that are being developed by multinational corporations and governments. But, despite many years of extraction of these resources, the populations of many of these countries remain some of the poorest people in the world. They suffer, in that sense, from resource curse. Many of our neighbours in the region, including Timor-Leste, Papua New Guinea, Solomon Islands and Nauru, have multibillion dollar resource projects operated by foreign multinational corporations, yet these nations are failing to meet many of the Sustainable Development Goals, and their economic growth is fairly inequitable. So the extraction and development of these resources offers an opportunity for the governments of developing nations to grow their national income and improve the living standards of their citizens. That's what needs to happen. That's why the lack of transparency around the extractive industry is an issue that has been identified not just by many in Australia but by many in the international community. Indeed, the World Bank plays a key role in implementing the Extractive Industries Transparency Initiative, the EITI, which promotes good governance and accountability in the use of mining revenue in resource-rich countries. This is incredibly important.

Currently, in Australia, Australian companies simply do not meet world's best practice for transparency and accountability in extractive projects. That is why Labor are determined to change this and why we have a plan, which I think the senator who brought this ill-conceived amendment into this place could learn from. What we've learned so far is that the Abbott and Turnbull governments have been proven unwilling to tackle corruption or to promote transparencies in the extractive industries. Labor has consistently been one step in front of the government on this issue of tax transparency to ensure that large Australian resource companies are good corporate citizens and maintain accounting and transparency systems which combat corruption.

A Shorten Labor government will legislate to establish a mandatory extractive industries transparency scheme. Our policy will require large Australian extractive companies to disclose payments arising from any activity involving exploration, prospection, discovery, development, or extraction. Disclosure under this regime will be on a country-by-country and project-by-project basis so that payments to be disclosed will include taxes on income; royalties; dividends; signature discovery and production bonuses; fees, including licence fees, rental fees and entry fees; and payments for infrastructure improvements and production entitlements. These are the sorts of things that we need to ensure have transparency and that we stamp out corruption in our extraction industry, not the sorts of things that have been brought forward in this amendment by the senator from the PHON party. These are the sorts of things that will make a difference to the Australian extractive industry and to those neighbouring Pacific island nations that are deemed to benefit from their resources, from Australian companies and from Australian governance.

Our policy means that payments must be disclosed if they are made to any national, regional or local authority of a country, including a department, agency, or state-owned enterprise. Disclosure under this regime should also apply to large extractive companies in Australia—so, a levelling playing field, the same rules, not two different tiered approaches like we have seen put forward in this ill-conceived amendment. A large company shall be defined as a company that meets at least two of the three following criteria: a balance sheet total exceeding $50 million, net turnover on balance sheet date exceeding $100 million and the average number of employees in the financial year to which the balance sheet relates exceeding 250. This scheme has, of course, been costed. We have done our homework. It has been costed by the Parliamentary Budget Office at $2.2 million over the election forward estimates and is fully offset. It is also consistent with Australia's national action plan for open government and complementary to the EITI, to which I referred earlier in my contribution, that the World Bank refers to. This mandatory reporting regime for extractive industries will increase the availability of verifiable disaggregated information from company financial reports regarding payments made to governments, and that information would build public accountability, and it would build public trust in governments and in companies.

There is more to our approach that I could go on with, but I want to use the last part of my time to highlight what Labor has done and has put forward, and compare that to not only the difference that the senator's amendment makes, which will be highlighted in this bill—which I hope I've already done—but also what we have currently under this government. What we have currently under this government is a policy vacuum. It is a policy vacuum on energy at every single level, whether we look at it from the extractive industry level, from the gas industry level or, today, from the renewable industry level. This government is in such a terrible state. It is in a complete shambles. I will highlight gas for the moment. This is a government that promised to bring down gas prices, yet the ACCC chair, Rod Sims, has described the gas market as unsustainable. When Prime Minister Malcolm Turnbull had the chance to take real action on tackling the gas crisis and impose export controls, he instead chose an unenforceable handshake agreement with the big gas exporters. And where has that ended up? Well, the gas crisis isn't over for the Prime Minister, nor is it over for Australian households and Australian manufacturers who are paying the cost day in, day out. Workers are also paying that price. So it is time that the Prime Minister admitted, firstly, that his handshake agreement on the gas crisis did not solve the gas crisis; it just confirmed that he's always looking after the big end of town.

On top of that, we've had the National Energy Guarantee, which, basically, is not a guarantee at all. The Prime Minister has had a second policy reset in as little as four days. This Prime Minister is all over the place. Firstly, he wants to take the Paris Agreement out of legislation and put it into regulation. That was yesterday. Today—I heard this morning—he doesn't want to have a target set at all, whether it be in legislation or regulation. Basically, Malcolm Turnbull will lie on the floor and let his backbench colleagues walk all over him. He will do anything to save his leadership. He does not care about the future of energy in this country and what it means for households. He has no plan for the future, because he continues to change his plan within 24 hours or less. Australians know what the future holds under this Turnbull government, and that is instability, policy vacuum, higher household energy prices and no way of looking to the future to ensure our children and our children's children will have a future with a reduced carbon emissions set.