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

I'll take that interjection, Senator Canavan, through you, Chair. It's probably because they're big donors to the Labor and Liberal parties, especially to the LNP. It's probably because former senior ministers from the Labor and Liberal parties walk these corridors, the corridors of power, and get influence in this building, and we get pay for play. That's how it works in this system. Democracy might have a lot of good things going for it, Senator Canavan, but it certainly can't control rampant capitalism, because, when you're in the pocket of big business, it is highly unlikely that you are going to do what's in the public good; you're going to look after your own self-interest. We see it happen time and time again in this place.

Did you know, Senator Canavan—through you, Chair—that in 1965 the US government officially raised the issue of climate change as being a threat to humanity? The oil and gas companies themselves in 1981 put out communications saying that we were running out of time for action on climate change, yet they have contributed billions of dollars to so-called think tanks and research institutions to sow doubt about climate action.

We have a situation where 20 of the biggest polluters on this planet—oil and gas companies—account for 35 per cent of global emissions, and we give those same companies a tax holiday. And if the Greens and the Labor Party had kept the carbon price in place—as hard as we fought for it—they would at least be paying for some of their pollution. But this Liberal government comes in and rips up the gold standard on international action on climate—the Clean Energy Package—and gives them another leg up, as if they needed it—another way of avoiding paying tax.

Every Australian would agree that the petroleum resource rent tax should be a tax that ensures that the public get a fair share of the profits that multinational oil and gas companies are making from being given the privilege of accessing Australian resources. That's what this is. The PRRT was designed over 30 years ago, essentially for the oil, gas and condensate industry—not for the massive booms we have seen in LNG. It is not fit for purpose. And all we have in terms of changes from this government is some tweaking around the edges. It has become a joke.

At last count, from last estimates—and we will be looking forward to getting an update at this estimates—it was $324 billion in IOUs to the Australian people. And that is growing, on average, at $40 billion per annum. That could pay for our Gonski package to fully fund higher education in this country. It could pay for dental care to be part of Medicare. There are so many things we could spend $40 billion on if these big companies, who can afford to pay their fair share, actually paid this tax. If we fixed the system, a rigged system deliberately set up to advantage big companies, we would have the money that we need to pay for infrastructure, hospitals and schools. This is against annual tax receipts of a measly $1 billion per annum from the PRRT. I will say that again. There is $40 billion in deferred tax credits, deferred tax payments to the Australian people, on a revenue of about $1 billion a year that they actually pay.

On these trends, it will be well into the next century, the 22nd century, before the Aussie people are square with big oil and gas—if ever. What a joke. We in this building could fix it if we just had the guts to stand up to big multinational corporations. So I plan to move an amendment today to assist the government in their pursuit of a surplus. I will put forward a number of amendments—bite-sized amendments rather than the full overhaul of the PRRT that is actually needed that would have ensured that multinational oil and gas companies that are profiting from public resources share just a little more of that profit with the public who own these resources.

I want to provide a quick summary of the amendments proposed by the Greens to the previous bill. We would establish uniform uplift rates to carry forward expenditure at the long-term bond rate of five per cent for the first 10 years and the long-term bond rate after 10 years. This is the new uplift regime established by the government but only for new projects. As a result, the tax bill of $324 billion for oil and gas companies will keep ballooning. Another amendment I would have liked to put up at the end of the last parliament would require companies to report deductible expenditure from the commencement of a project, irrespective of whether the project is generating income. This would address the problem of companies accumulating deductible expenditures during exploration, without the ATO being made aware of the size of potential future deductible expenditure until the company reports to the ATO when the project starts to record an income.

A third amendment I would have put up ends the transferability of exploration expenditure to counter the problem of companies transferring deductible exploration expenditure from onshore projects to offshore projects. Another amendment: I would have required companies to deduct outstanding carry-forward expenditure in the order of the size of the uplift rate. Currently, companies do the opposite so as to maximise their outstanding carry-forward expenditure and minimise their tax paid. This practice also results in the expenditure that is incurred first from exploration often being deducted last. But, alas, the government and the opposition are more interested in being nice to multinational oil and gas companies than they are in ensuring the integrity of the tax system or in ensuring public benefits.

With this bill, today this parliament is considering watering down the PRRT even further. Here is how the minister's office has explained it. Owing to a recently discovered failure in 2005, four exploration permits were awarded over areas promoted as frontier areas in 2005 that were not validly designated as frontier areas. To remove any doubt about the entitlement of relevant title holders to claim uplifted petroleum resource rent tax deductions under the scheme, it is proposed to amend the act to retrospectively designate the four areas that were not formally designated frontier areas in 2005 as frontier areas. In other words, the scope of eligible deductions under the PRRT is going to increase. Explorations conducted in frontier areas are to receive a 150 per cent premium on eligible PRRT deductions. As if $324 billion worth of tax credits isn't enough, this bill is making sure that a decision made 15 years ago falls in favour, again, of big oil and gas companies.

Our amendment today, senators, is modest. It simply removes the section that would backdate the generous tax credits to a handful of recent gas projects that have some legal uncertainty about whether they are eligible for the tax rort that is currently in place. Now, I believe, as you can probably guess, that this doesn't go anywhere near close enough to the changes that we need to make to this tax system. This will barely add an extra cent to the money that the Australian people should be owed if these companies were forced to pay the tax now—for example, by putting a floor rate on the PRRT so that companies have to pay an annual tax regardless.

I'll speak more about my amendment in the committee stage, but I just want to wrap up by saying that this is an issue that my party has been fighting for for at least the last five years to try to fix this tax rort. Not only do these companies not pay the petroleum resource rent tax that's owed to the Australian people, because of a system deliberately designed to give them a free kick in front of goals; but, when I asked Dr Craig Emerson, the architect of this tax scheme, directly in the Senate inquiry in Sydney why we couldn't fix the system, why we couldn't remove the 15 per cent per annum exploration uplift rates, why we couldn't put a floor—