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

I was a bit confused as to who to ask this question to, given Senator Brandis's recent experience with recovering revenue for the Commonwealth, but I will direct my question to the Minister representing the Treasurer, Senator Cormann. Yesterday the Australian National Audit Office published a bombshell report into the collection of North West Shelf royalty revenue. ANAO found that $5 billion worth of deductions were claimed by oil and gas companies despite many of these deductions not being permitted on the Commonwealth royalty schedule. They also found that it had been 17 years since the department of industry audited the oil and gas companies' procedures for royalty calculations. How many hundreds of millions of dollars in revenue have gone begging because of this basic lack of scrutiny? Will the government be establishing a multidepartment task force into fixing this mess?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Strictly speaking, that is actually a question for my good friend and colleague Senator Canavan, who is responsible for royalty arrangements through the resources portfolio. But let me just respond on behalf of the government, in an abundance of helpfulness, as always and as ever, for Senator Whish-Wilson.

The government has welcomed the Australian National Audit Office report. We have accepted all the recommendations. I see Senator Canavan nodding. Of course, we are swiftly implementing all of those recommendations. Indeed, over the last financial year I believe that the department and the Audit Office have worked together to assess how collections in relation to royalty streams have been conducted and all of the royalty revenue has absolutely and fully been received in accordance with the law. Now, obviously, the government is always happy and keen to take on board any suggestions on how arrangements can be improved.

Stephen Parry (President) Share this | Link to this | Hansard source

Senator Whish-Wilson, a supplementary question.

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

The ANAO audit report identified that the Commonwealth does not carry out any testing of the flow meters that are used to calculate the volume of oil and gas extracted which the royalties are based on. The ANAO report found that one meter, for example, was out of action for a whole five years without anybody noticing. Given the failure of the department over the decades to audit whether the tax deductions were legitimate or not and given that we do not even know if the oil and gas meters are functioning properly, does the Australian government still have confidence in the Department of Industry, Innovation and Science to administer the Commonwealth royalty regime? (Time expired)

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

You are now well and truly asking me questions that do not relate to my portfolio. I refer you to the responsible minister.

Stephen Parry (President) Share this | Link to this | Hansard source

Senator Whish-Wilson, a final supplementary question.

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

This one probably should have gone to Senator Brandis, but nevertheless: the ANAO states that the Commonwealth is the only jurisdiction with the legal authority to initiate litigation to recover unpaid royalties. Has the government sought legal advice over recovering these unpaid royalties? Will the government be investigating if any of these wrongly claimed tax deductions might be considered tax fraud?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Senator Whish-Wilson is mixing a whole series of different concepts. Royalty payments are not tax payments. That is probably why he directed the question to the wrong minister. In order to continue to the spirit of cooperation and constructive assistance I will take that question on notice and I will ensure that Senator Whish-Wilson gets an appropriate answer from the accurate minister.