David Pocock (ACT, Independent) Share this | Hansard source

I rise today to speak in support of the Offshore Petroleum and Greenhouse Gas Storage Amendment (Benefit to Australia) Bill 2020. This bill is striking in its simplicity. It seeks to ensure that any exploitation of fossil fuels is for the benefit of the Australian community. Our laws do little to guarantee that Australians get a fair share from the sale of our fossil fuel. Worse still, our laws are ineffective in protecting our climate environment against the impacts of their extraction. The flaws in our laws start with offshore leases being granted to companies under excessively generous terms. This amendment could tighten this loophole. But there also needs to be real reform to our tax system.

The companies that extract our fossil fuels are overwhelmingly foreign owned. Just look at the gas industry, where 96 per cent of the companies profiting from gas exports are based offshore. The income tax, royalties and petroleum resource rent tax that these companies pay is woefully inadequate. At times, there are misconceptions about the contribution of the fossil fuel industry to Australian prosperity. In fact, the total tax paid by fossil fuel companies represents less than one per cent of government revenue, and yet profits are at record levels. In the first half of this year, Woodside Energy and Santos made a profit of more than $4 billion between them, an increase of between 300 per cent and 400 per cent. The profit these two companies made in just six months is equivalent to the cost of sending all Australian children between the age of three and five to preschool for 10 years, or of electrifying a third of all Australian households. How, I ask members of the government and of the opposition, is that in the best interests of the Australian community?

What we need now is a windfall profits tax. A convincing case for this change is being made across the community, including by former Labor politicians, like former senator Bob Carr; former senior public servants, like Dr Ken Henry, Secretary of the Department of Treasury under former prime minister John Howard; business leaders, like Mike Cannon-Brookes, the largest shareholder in AGL, Australia's biggest polluter; prominent economists, such as Professor Ross Garnaut; and former chief economist of the World Bank, Professor Joseph Stiglitz, who called the measures a 'no-brainer'; unions, including the ACTU; union leaders, like Dan Walton, Secretary of the Australian Workers Union; and public think tanks, like the Grattan Institute. Perhaps the strongest call for this change has come from the UN Secretary-General, Antonio Guterres, who recently said:

The fossil fuel industry is feasting on hundreds of billions of dollars in subsidies and windfall profits while household budgets shrink and our planet burns.

Any argument that it is too hard or that business will flee is a straw man. Just look at the United Kingdom, where the conservative government has responded to high fossil fuel prices by swiftly enacting a windfall profits tax. That change is expected to raise the equivalent of approximately $13 billion this financial year.

Recent research suggests that in Australia two out of three people support a windfall profits tax. It is no wonder given the soaring costs of energy bills that households are facing. My colleagues in Pauline Hanson's One Nation Party and I may not agree on many things in this parliament, but, in this case, I admire their foresight on the issue of domestic gas prices. Introduced nearly two years ago, the explanatory memorandum to this bill highlights the problem of our domestic gas market. It highlights the problem of it being exposed to international prices. We are not involved in the war in Russia. We don't import gas from Russia yet we are paying export prices for our gas. It was long before the invasion of Ukraine that One Nation proposed this amendment. Since this bill was first introduced, the price of gas has increased threefold, as we continue to export 80 per cent of the gas we produce. The effect has been a huge increase in the cost of living for Australians across the country.

A well-designed windfall profits tax would push domestic gas prices down and reduce cost-of-living pressures for Australians. If the measure was applied to the domestic sales of gas and set by a gas reference price from the Australian Competition and Consumer Commission, it would act to efficiently reduce the cost of gas in Australia. In addition to a reduction in the domestic gas price, the revenue generated by a windfall profits tax could be used to fund development in rural and regional communities. The majority of fossil fuel extraction is from beneath land and sea near to these communities and it is right that the benefits are for them too. I would like to see the additional revenue used to set regional and rural communities up to benefit from a renewable energy future. This could look something like the Nationals' Royalties for Regions program in Western Australia and could be administered by an energy transition authority.

The Nationals rightly point to the need to invest in regional Australia, and Labor has an agenda to transition our economy. A windfall profits tax for the regions can help do just that. I call on the government to start work on the design of policy that will give Australians a fair share of the enormous profits being extracted from our land and seas. I also call on the government to ensure that fossil fuel projects do not go ahead where they are not in the interests of the Australian community. On this point, the IEA, the IPCC and climate scientists all agree it is in the best interests of the Australian community and the global community for there to be no additional fossil fuel projects, especially when projects are opposed by First Nations people.

First Nations people and their country and sea country are disproportionately and unjustly impacted by fossil fuel projects. Many have been fighting against the odds to protect their country from fossil fuel developments. I want to congratulate the landmark win by Mr Dennis Tipakalippa of the Manupi clan of the Tiwi Islands in the Federal Court last week. Tiwi Islanders argued before the Federal Court that Santos did not appropriately consult the Manupi clan about the impacts of the offshore Barossa gas project. In a legal first, witnesses gave powerful evidence on country in the Tiwi Islands about the physical and spiritual impacts that drilling could have on them, their culture and the sacred animals that call this sea country home. The case demonstrates the requirement for deep consultation with traditional owners before approval for drilling in sea country. It is vital that the voices of First Nations people be heard when gas projects such as Santos's Barossa project threaten their country. It is an historic decision, a true David and Goliath battle, and I applaud the Tiwi people for having the courage to take on one of the biggest resource companies in Australia. But this community courage and recent victory come against a backdrop of structural failure. Last week, the UN Human Rights Committee found that the Australian government has failed to adequately protect Torres Strait Islanders and has violated their right to enjoy their culture and lives, by failing to act on the climate crisis. We have to do better.

I support increased emphasis on the need for decisions around oil and gas to benefit the Australian community. This bill is essentially trying to deal with the state capture we see in Australia—both major parties not having the political courage to actually ensure that resources contribute to the wealth of everyday Australians. Over the last few decades we have seen policies that benefit multinational companies that come to Australia, extract our resources and ship their profits overseas. Senator Hanson rightly pointed to Norway and their approach to actually ensuring that their resources contribute to their national wealth. It's a stark, stark contrast to what we see in Australian politics.

My sense, when talking to everyday Australians, is that they want politicians to actually ensure that, if we are selling resources from our country, we're reaping the rewards, not multinational corporations, which, as we know, pay little tax and really push the line about jobs and how much they are investing in communities, which is total pocket change when you look at the amount of revenue that they're generating. We know that many of the job figures are also overblown. Another jurisdiction to point out, as Senator Hanson did, is Qatar, which produces less LNG than us but pulls in $26 billion a year in royalties. There's been a clear message from the Australian people that they want more transparency and they want the lives of everyday Australians put at the forefront. I really commend this bill and this amendment to actually ensure that fossil fuel exploration and profits are in the interests and to the benefit of everyday Australians.

On the broader point about new fossil fuel projects, it's clear that it's in the best interests of all Australians for them not to go ahead. So we face this point in time where we need to ensure that, with existing fossil fuel projects, we are storing the wealth from them and actually using it to transition our economy, and, when it comes to new fossil fuel projects, we have the political courage to do the right thing, to do the thing that scientists are telling us we have to do and that we know we have to do to actually protect all the people and places we love.