Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

I rise to speak to my Offshore Petroleum and Greenhouse Gas Storage Amendment (Benefit to Australia) Bill 2020.

I want the Australian people to understand the importance of this legislation and why it is so necessary.

First some background.

The country of Norway has a population of fewer than six million people.

It sits next to the resource-rich North Sea.

The country's leaders decided long ago to make sure Norway's people, who own these resources, benefited from their extraction and sale.

As a result, Norway now has the largest sovereign wealth fund in the world with a value approaching A$2 trillion.

That's more than $350,000 for every person in Norway.

Now compare that to Australia.

We have resources of minerals and energy that make Norway's seem insignificant.

'Our land abounds in nature's gifts of beauty rich and rare.'

Our very own national anthem says it as plain as day.

We have enough iron ore to supply the world's needs for centuries.

We are have some of the world's largest reserves of aluminium, uranium, gold, copper, coal—the list goes on and on.

Just as it is with the people of Norway, these resources are the sovereign property of the Australian people.

And just like the people of Norway, the people of Australia should be rolling in the riches derived from the extraction and sale of these resources.

However, we are not.

Our federal, state, territory and local government debt is about 85 per cent of our GDP.

Private debt is about 135 per cent of GDP.

Families across Australia are struggling with the rising costs of living.

We have a housing crisis which is forcing many families to sleep in cars or on the streets.

We have some of the highest energy bills in the world, and crippling shortages of energy, in a country with abundant reserves of energy that most others can only dream of.

We have a public health system which cannot cope with demand.

We have increasing poverty and increasing welfare costs.

Something is very, very wrong here in Australia.

It is very clear that successive Australian governments have not made the right decisions about leveraging our resources for the benefit of the Australian people.

Australians receive the lowest share of benefits from their mineral and energy wealth of any country in the world.

The question is: why?

Why have successive coalition and Labor governments allowed our resources to be effectively pillaged by mainly foreign owned multinational companies for virtually no return to the Australian people?

Natural gas is the perfect example of this debacle.

Our gas reserves in the North West Shelf area are huge, and there are plentiful reserves elsewhere.

There are quite literally trillions of cubic feet owned by the Australian people.

As was noted in the committee inquiry into this legislation, we became the largest exporter of liquified natural gas in the world in 2019.

Exports from the North West Shelf are at more than $80 billion in value but Australia receives only $200 million or $300 million in revenue from it through the Petroleum Resource and Rent Tax (PRRT).

By comparison, the country of Qatar generates $26 billion in annual revenue from fewer LNG exports.

I've asked the current Prime Minister, the opposition leader and senior ministers of the former coalition if they understand what's going on with the riches owned by Australians in the North West Shelf.

None of them knew anything about it, and said so.

Our LNG exports continue to climb in volume, enriching foreign-owned multinationals and our manufacturing competitors.

So much gas is being exported that Australia is actually suffering a shortfall of domestic supplies—and there is no pipeline delivering North West Shelf gas to Australia where it is in very high demand.

This has created a situation which—on the face of it—is completely ludicrous.

Australia is the only large gas producer in the world where domestic prices are higher than international prices.

Another important reason for our domestic shortfall is that successive Labor and coalition governments have let these mostly foreign owned multinationals 'bank' our gas reserves.

According to the Australian Competition and Consumer Commission, they are sitting on proven and probable reserves that could provide Australians with reliable energy for decades to come.

These reserves are being locked away under retention leases for 30 years or more when there are:

Successive Labor and coalition governments have been weak; they've been frightened by the threats these companies make and have worked actively to help these companies rip off the Australian people.

They have happily received many millions of dollars in donations from these companies as a reward for ripping off the Australian people.

They let foreign owned multinationals buy Australian housing stock, and they've let foreign owners buy about 20 per cent of Australia's water entitlements.

None of this is in our best interests.

Let me be absolutely clear: you have no business being a member of this parliament unless you are always acting to the benefit of Australia and all its people.

Here's your chance to show the Australian people you are truly acting to their benefit, by supporting the Offshore Petroleum and Greenhouse Gas Storage Amendment (Benefit to Australia) Bill 2020.

This is not a tax bill.

This amendment is aimed at increasing the domestic supply of natural gas at a fair price.

If the government and opposition fail to support an amendment requiring ministers and other decision-makers to act to the benefit of Australians, they need to explain why before casting their vote.

This is not to the benefit of the Australian people who own these resources.

This is to the detriment of the Australian people, and the major parties which form government in Australia are enabling it.

This amendment to the Offshore Petroleum and Greenhouse Gas Storage Act 2006 is profound but simple.

It should not even be necessary, but the great Australian gas rip-off enabled by successive Labor and coalition governments makes it necessary.

One Nation's amendment broadens the object's clause in section 3 of the act.

It states the object of the act is to 'ensure that the exploitation of these natural resources is for the benefit of the Australian community'.

What more do you want to know? That is just plain common sense. The Australian community might wonder why it's necessary for the act to state the obvious, but recent history demonstrates that decision-makers need this obligation placed on them by this amendment.

All of these mainly foreign owned companies exploiting our resources are laughing at Australia all the way to the bank.

And why not?

To them Australia is little more than a cheap dirt mine.

From 2014 to 2019, ExxonMobil Australia's revenue was about $56 billion, and it paid no tax.

In the same period, revenue for Chevron Australia Holdings was $28 billion, and it paid no tax.

Revenue for Woodside was $43 billion, and it paid only $1.2 billion in tax.

Santos made $23 billion and paid only $3 million in tax.

Enough is enough.

These resources belong to the Australian people.

It should be the Australian people who are benefiting from the exploitation of these resources.

Once they're gone, they're gone for good, and the Australian people will never get a fair return for their resources.

This amendment is an important step in correcting this ludicrous state of affairs.

And it represents an opportunity to get things right with the 'new' energy source everyone is talking about: hydrogen.

Naturally occurring hydrogen deposits are all over the place in Australia, and often associated with deposits of oil and gas.

It's the cheapest form of hydrogen because it doesn't require energy-intensive processes to produce it.

The former government's National Hydrogen Strategy says Australia is well placed to make hydrogen its next big export.

It says large-scale market activation will include enabling competitive domestic markets with explicit public benefits.

Our amendment bill is aimed at ensuring this really happens with hydrogen, and that this resource is not squandered for little public benefit as is happening with natural gas.

The major parties have screwed us on gas and oil—here's hoping they don't screw us on hydrogen too.

Anything less than full support for this amendment by members of this parliament will be a clear message to the Australian people that you are not acting to their benefit.

It will be a clear message that you don't care the Australian people are being ripped off.

It will be a clear message that you've been cowed into submission by mostly foreign owned multinationals.

It will be a clear message to the Australian people that you don't belong in this parliament.

I've worked on this for about the last five years, when it was brought to my attention about the resource that we have in Australia, and we are not getting the benefit of it. I note that, when I raised this in March 2021, Senator Ayres got up and said:

Offshore petroleum developments are already subject to a range of vastly more specific regulations to test if they're for the benefit of the Australian community.

Really? And he said:

Adding a redundant 'for the benefit of the Australian community' clause doesn't mean that oil and gas developments are environmentally sustainable; it doesn't mandate that Australian oil and gas investments should employ Australian workers and offer them decent wages and conditions …

It has got nothing to do with offering them decent wages and conditions. This is about the Australian people reaping the benefits from our resources. As I said to you, Norway have utilised their resources to the best of their ability for their people—six million people—and they have been able to make nearly $2 trillion from that.

Here in Australia, we're struggling with providing services, whether it's health care, housing or water, to our people in Australia. We have families living in their cars. We have an ever-increasing welfare debt. We have an ever-increasing debt to the rest of the world that we can't seem to be able to pay. When Prime Minister Albanese became Prime Minister of this country, he said he would see that multinationals paid their fair share of tax. What's happened with it? We haven't heard a word about it—nothing.

Here you have the best resource that we have, and we can make a lot of money out of it. If Qatar is exporting less LNG than we are and can make over $26 billion for that country, what the hell is happening here? The problem that I've found over the years in who I've spoken to with regard to this, the resource ministers, is that they didn't have a clue about it, didn't understand what they were talking about, weren't interested. Retention leases are only supposed to be for five years. We keep renewing them, because the lobbyists come in and take them to dinner, and it's: 'Oh no, mate, that's fine. We'll sign off on this. We'll give you another five years.' Some of the retention leases are more than 30 years old. It's got to be 'use it or lose it'.

We also need to build a pipeline from the west coast of Australia to the east coast to give the supply of gas that we need. You can build it if you have the will. But I find that in this place most of the people here have never run a business and they've never employed staff. They've actually come from universities, worked in political offices and then seen their way up to become members of parliament. You have no business acumen. You don't know the effects of it. You actually listen to the bureaucrats, who've got nothing to lose. No-one is held accountable in this place, not even the bureaucrats. They tell you what to do because you lack the competence, the knowledge or the business acumen to know what to do and how to make the decisions in this place that the people out there are relying on us to make for their benefit.

I will not give up on this. It absolutely disgusts me to think that Labor are not going to be talking to this bill today. They're not going to say a word on it. Why? Why are you shut down? Why aren't you speaking to this? Why aren't you going to explain to the Australian people what is to the benefit of the Australian people? If Senator Ayres is anything to go by, the fact is that successive governments, the benefit of Australia—why have we lost the Commonwealth Bank? Why have we lost the airports? Why have we lost water security? Why have we lost our electricity components? Why have we sold it to multinationals? The Australian people are getting to a stage where they own nothing. They've got no control of their country or their destiny. The politicians in this place, in my opinion, are basically useless, because I don't think you even know what the hell you're doing here. You collect your pay, you just show up and you don't understand the workings of this country, how to benefit the people of Australia. I commend this bill to the Senate.

Susan McDonald (Queensland, National Party, Shadow Minister for Resources) Share this | Link to this | Hansard source

I rise to speak on the Offshore Petroleum and Greenhouse Gas Storage Amendment (Benefit to Australia) Bill 2020. I note first and foremost that, while the aim of this bill is a worthy one, it is unfortunately flawed in a way that would result in unintended consequences that may in fact have the opposite effect to its original intention. I agree with the comments made in closing by Senator Hanson, particularly around the way business operates and the importance of our roles in determining legislation in this place. But I do need to talk about the specifics of this legislation amendment.

The legal system relies on explicit wording of legislation and clear definitions. By making the term 'for the benefit of the Australian community' open to interpretation by the courts, we would allow radical environmental groups to tie up any projects in legal fights. And it is not out of the realm of possibility that activist groups would use this amended objective to make the argument that an activity such as drilling an offshore well to recover oil or gas would contribute to climate change or have an environmental impact and that therefore it does not benefit the Australian community. This legislation amendment will expose the gas industry and potentially the entire resources sector to green lawfare and drive industry investment away from Australia. This will of course be disastrous for our economy, for Australian workers and for Australian businesses who are benefiting from the investments into these investments. And—

Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

They can do that now, through the environmental act.

Susan McDonald (Queensland, National Party, Shadow Minister for Resources) Share this | Link to this | Hansard source

Well, we would be providing them with another opportunity, Senator Hanson—would severely constrict regional Australia's ability to support businesses and families.

I also want to touch on Senator Hanson's comments with regard to the PRRT returns and company tax returns. I think what is not well understood is that, when these investments in these projects are made, it is billions of dollars not just in capital investment but also in precursory, environmental and other reviews. That costs a huge amount of money, which is able to be offset on part of the tax calculations, remembering that those dollars are spent in Australia with Australian companies employing Australian workers.

While this bill talks about community benefit, it is clear that mining in this country does already benefit the community in ways that may not appear on annual profit-and-loss statements. If we want to look at industry figures, the resources sector as a whole supports over 1.1 million direct and indirect jobs within Australia, contributing over $32.6 billion in direct salaries in 2021. The government has even acknowledged that the resources sector is to thank for a $50 billion budget boost this year and a brighter than expected fiscal outlook for Australia. The Australian oil and gas industry directly and indirectly supports over 80,000 jobs, contributed over $5.35 billion in tax in 2019-20 and recorded a $15.9 billion surplus in the trade of oil and gas. Over the past decade, the oil and gas industry paid more than $64.4 billion to the government, with contributions spanning decades totalling $161 billion since the mid-eighties.

This contribution is not limited to taxes. Over the last decade, the oil and gas industry has invested around $473 billion in the Australian economy. This includes about $170 billion spent directly, since 2007, on five offshore LNG projects, including Pluto, Gorgon, Wheatstone, Ichthys, and Prelude, and, as of last year, there are $120 billion worth of projects in the pipeline. That means more jobs in construction, supply chains and new operations. But we do, potentially, risk these investments with the introduction of the government's 43 per cent emissions reduction legislation, the Queensland government's increase in coal royalties and, potentially, this amendment, all of which go to undermining confidence in investment in this country.

Opponents of gas, coal and mining in general are quick to point out that tax and royalty payments are less than they believe they ought to be, but the full value of our resources sector is found away from the balance sheets, the prospectuses and annual reports. It is in the high-paying jobs both in the regions and in the metropolitan company head offices. It's in the sponsorship of sporting teams, events and community groups. Superannuation funds and shareholders rely on a profitable resources sector to supplement their incomes and pay for their retirement. This money flows through local businesses, creating employment, which is also taxed, generating more revenue for the government. Just as mining's ripple effect on the economy is far reaching, so too any impost on the mining resources sector will be felt far away from the pits, the pipelines and the corporate boardrooms.

Already, in Queensland, we are seeing big miners pull out of projects due to the state government imposing the world's highest coal royalties. This reduced investment in regional Australia is disastrous for engineering firms, food suppliers, workwear stores and everyone employed directly and indirectly by the mining and resources sector. Many of these businesses are run by families. They're not driving limousines or flying in private jets; they're cementing a future for their kids, providing apprenticeships and sponsoring local netball and football teams. Rugby clubs such as the Capella Cattledogs and the Emerald Rams in Central Queensland would struggle to survive without sponsorships by local businesses engaged by the resources sector. There is far more community support from resources companies operating in Queensland. We can point to a million dollars to build a new centre for the AEIOU Foundation in Townsville, which specialises in teaching children with autism; $6 million for the Banana Shire Library, museum and community hub; $8 billion for 16 affordable housing units in Isaac shire; $4.5 million for a pool in Mount Morgan; $7.8 million for a pool in Charters Towers; $834,000 for a sports facility upgrade at Cloncurry—the list goes on and on. And this is a snapshot of just one of the hundreds of resources companies operating in Australia that give back to local organisations and enrich small businesses. I can guarantee you that this Labor government would not be directing any additional royalties back to those regional communities.

Taking just one example from a submission to the committee that examined this bill, Chevron stated:

And this is just one company. Is this not already a benefit for Australian communities?

Across the industry, this has meant more export earnings, investments, taxes and royalties—things that benefit all Australians, as they provide the funds governments use to invest in infrastructure, education and social services. As the Australian Petroleum Production and Exploration Association said in their submission to the Senate Economics Legislation Committee's inquiry into this bill:

APPEA supports, and agrees, that the development of natural resources should be for the benefit of the Australian community.

…    …   …

The effect of this amendment, however, will do the opposite and will stymie investment.

…   …   …   

Claims that companies are 'hoarding' resources have been proven incorrect … and changing the objects clauses of the Act, under which hundreds of billions of dollars of investment have been made, drastically increases Australia's sovereign risk for no material gain.

The resources sector currently operates for the benefit of the Australian community, and the addition of this unnecessary amendment has the potential to simply shut down projects and drive investment offshore.

The Offshore Petroleum and Greenhouse Gas Storage Act 2006 provides for the safe and responsible operation of offshore oil and gas activities. It ensures that risks to safety and the environment are reduced to as low as reasonably practicable. It also ensures that industry meets the requirements of good oilfield practice and ensures that the recovery of oil and gas is at its optimal level.

One Nation's proposed amendment alters the objectives of the existing Offshore Petroleum and Greenhouse Gas Storage Act 2006 by adding the following clause:

to ensure that the exploitation of these natural resources is for the benefit of the Australian community.

While this change may seem innocent enough, in effect it injects a major ambiguity and uncertainty into the act. Poorly drafted amendments as proposed today can be hijacked and have serious unintended consequences that would undermine future resources investment. We are constantly told these days that words have consequences, and it is definitely true in the case of this bill.

The coalition has previously spoken in opposition to the bill due to the broad nature of the amendment and the unnecessary wording, which has the potential to open offshore petroleum exploration and development to legal challenges. The Greens supported the same bill last time with amendments that defined 'community benefit' as relating to the effects of climate change, and oil and gas's contribution to temperature rises. In applying this definition to that 'community benefit' term, the Greens proved that the bill's wording can be utilised against the sector to push extreme antidevelopment agendas. I've already touched on the legal system relying on explicit wording of legislation and clear definitions. With this term 'for the benefit of the Australian community' open to interpretation by the courts, we would allow radical environmental groups to tie up any projects in legal fights.

It is clear from even the most cursory look at the contribution of resources to our society that any moving of the regulatory levers must be meticulously considered and only done as a last resort, especially if there are moves to decrease the profitability of these companies via increased royalties and taxes. We have already seen in Queensland the Labor government's royalty increase send shockwaves not just through the coal sector but through all mining activities. While Queensland Labor claim they are doing this to benefit the community, the early signs are that it will result in long-term harm for regional communities. Federally, we have seen the introduction of new requirements in the investment objectives of a number of government agencies, like Infrastructure Australia and NAIF, hamstringing investment in industries like the gas industry and sending signals to investors that the government does not support the industry.

Australia must understand that this is a highly competitive space. We must continue to present ourselves as a viable, responsible and appealing investment opportunity to ensure that we continue to benefit from this sector. Over 70 per cent of our nation's income is drawn from mining and resource activities, and not to mention the highly paid salaries and the regional investment that allow towns like Dalby, Chinchilla and Cloncurry to be thriving with the activity of mining in this country. Poorly drafted amendments that can be hijacked and have serious unintended consequences would further undermine future resources investments. There is no benefit to an industry that no longer exists. The coalition will not be supporting this bill.

David Pocock (ACT, Independent) Share this | Link to 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.

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

Acting Deputy President O'Neill, you, yourself, remember the fights we had five years ago in this Senate chamber and through numerous committees to get companies like Chevron to actually pay some tax in Australia. It really hit home to me today, listening to the Liberal Party get up in here and talk about what a great taxpayer Chevron is and how many billions of dollars they're putting into our tax system, when the Australian Taxation Office had to take Chevron to the High Court in 2017 to get them to pay any tax. Chevron were Australia's biggest tax avoider. They ended up having to pay $340 million, thanks to the Australian tax office and senators in this chamber—

pressing for some political action, Senator Scarr, and pressuring senators on your side of the chamber, Acting Deputy President, to actually do something to make big oil and gas corporations pay their fair share of tax.

We had a Senate inquiry, which the Greens initiated, into the petroleum resource rent tax in 2017—chaired by the very capable Senator Sam Dastyari, may I say. Right then, the government had what was called the Callaghan review, which they'd been sitting on for two years because the petroleum resource rent tax, called the PRRT, was the petroleum resource rort tax. These companies had clocked up nearly $340 billion in tax credits. In other words, they were going to pay no tax for the life cycle of the large gas projects in this country—a tax system invented in the 1980s and totally out of touch with the reality of the 2000s.

Paul Scarr (Queensland, Liberal Party) Share this | Link to this | Hansard source

How much are they paying this year? How much are they paying this year? This year! This year!

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

It was this chamber, Senator Scarr—through you, Chair—and senators who actually worked hard to get changes to the PRRT. But let me say how disappointing those changes were—25 per cent uplift on exploration rates. At the time of our inquiry, oil and gas companies could uplift their exploration expenditures by 15 per cent per annum and all their offshore operating activities costs by five per cent per annum. The Australian public would even pay for the clean-ups of oil and gas fields, because that was also deductible under the petroleum resource rort tax. The government, thanks to the pressure from this chamber, at least reduced that uplift on exploration expenditure to five per cent. But still we have hundreds of billions of dollars in tax credits, and tax that could be paying for schools, hospitals and other important things in this country is not being paid. It is still a rort.

My colleague Senator Cox very shortly will talk about how the Greens have a very simple solution to this. I know crossbenchers in this place—One Nation, Senator Lambie and previously Senator Patrick—have all tried to bring in proper reform to the petroleum resource rort tax. We need a royalty rate of at least 10 per cent—a base royalty rate that deductions don't work against so that we actually get a return for the Australian people. Yes, some of these companies pay tax and, yes, they employ Australians. But remember: what other industry apart from mining gets its resources and inputs into its production for free? These companies are taking our gas, our oil, our condensate and other products, and they are paying nothing for them. Yes, they are extracting them and they are employing people, but they are paying nothing for them to the Australian people, who own these resources.

It's so typical of the LNP to come into this place and say: 'Well, leave it to the free market. They're employing people. Let them get away with these superprofits. Let them get away with paying no tax.' They're still doing transfer pricing. There's still dodgy related-third-party financing going on. There are a whole range of things that these companies are still doing. But I'm proud to be part of a party that, over the last decade, has led to at least some reform in this sector, and we need to see more of it.

But here is where the Greens fundamentally disagree with One Nation: we believe that the form of exploitation—to focus on that word 'exploitation'—of our oil and gas reserves offshore that would best suit the Australian people would be no new oil and gas projects. There are already enough hydrocarbons—enough oil and gas—in reserves that, if we exploit those, we will exceed our Paris target. We will exceed two degrees of warming. Even the conservative International Energy Agency said that, if we are to limit warming to 1½ degrees to protect the future generations on this planet—some of whom are watching this Senate debate today in the chamber—we have to stop exploring and exploiting new fossil fuel projects not just in Australia but internationally. We need to, as quickly as possible, move to a 100 per cent renewable energy footing. Of course we're still going to use petroleum products in the decades to come. There has to be a transition. But we need to move as quickly as possible. The last thing we should be doing is putting in place incentives in legislation, financial or otherwise, that encourage more greedy oil and gas companies exploiting our ocean with the exact same product that, when we burn it, is boiling our oceans, killing our coral reefs and the ecosystems off my state in Tasmania, like our giant kelp forest, and decimating our fisheries and decimating biodiversity in the womb of this planet that is our ocean. It is insanity in this day and age to be doing exactly that.

So what we actually need to do is have legislation in this place that stops all new oil and gas exploration, and the Greens have a bill before this august chamber to do exactly that—to amend the Offshore Petroleum and Greenhouse Gas Storage Act to ban all new fossil fuel exploration. But I totally accept the spirit in which One Nation has brought this bill forward today: seeking to get a benefit for the Australian people from the big, greedy oil and gas companies that currently pay very little tax, thanks to an overly generous—extremely generous—and totally out-of-date tax system that relates to the royalties on oil and gas extraction from this country. I remember that we actually called a number of witnesses before the Senate, including the architects of the PRRT, and, as senators, we put the simple question to them. We said, 'Why shouldn't this system be totally reformed? This system was set up for oil production in Bass Strait in the late 1980s and 1990s. Now what we have is vertical integration and massive multibillion—in fact, trillion—dollar projects that extract gas. This was not set up for the gas market or the condensate market.'

I remember speaking to Dr Craig Emerson who was one of the architects of the PRRT. He said: 'Senator, if you change the system now, it will lead to sovereign risk. We won't see any more investment in new oil and gas projects.' Putting aside the fact that I didn't have a problem with that, I don't accept that changing a tax system purely for the benefit of corporations is in the public interest or that not changing a tax system purely for the benefit of oil and gas corporations is in the public interest. We have a duty to make sure that any mining company pays its fair share of tax in this country. Tax is not a dirty word. We need royalties; we need resource rents.

It is for you, Senator Scarr. It is for you and the Liberal Party, and I totally understand that. But most Australians want to see corporations pay their fair share of tax. They know what it's like when they get a letter from the Australian Taxation Office or they get a call from their accountant and they're told that they didn't fill in their tax return properly or they owe tax to the Australian tax office. Individuals in this country know what that's like. Why should corporations, because they have access to power and influence, get away without paying their fair share of tax?

Once again, I am very proud to be part of a political party that has spent so much time and effort in this chamber, over many, many years, trying to get a fairer tax system for all Australians because, if we had a fair tax system for all Australians, we wouldn't actually have a revenue crisis. We would have the money we need to have a social security safety net and to invest in our people, in better health for Australians and in better education—all the kinds of things, Senator Scarr, I'm sure you would agree, would be an investment in the Australian public and in our future. But, more importantly, we would have the money we need to actually pay to avert the biodiversity crisis we have in this country. We would have the money to fully fund our recovery plans for 150 species and habitats—recovery plans which the previous government tried to have removed from the Environment Protection and Biodiversity Conservation Act, which were never resourced. We would have money in this country to assist farmers, to assist communities and to restore degraded habitat both in our oceans and on our land. We would actually have the revenue we need to pay for schools and hospitals and all those critical things. That comes down to one thing: do we have the courage as politicians—do we have the spine in this place—to take on big corporations?

Senator David Pocock talked about state capture in this place. It is a very apt description for the polity I have seen in the decade I have been a senator in this place. State capture is a simple concept. It means big political parties are captured by vested interests through donations and other influences, and they deliver policies those vested interests want. I don't think the Australian public voted for that; I think they voted for change at the last election. A third of all Australians didn't vote for major political parties; they voted for the Greens and other parties. They want to see change. They want to see us break this state capture that, let me tell you, has absolutely paralysed climate action in this parliament, in this building, in the last 15 to 20 years.

I'm glad we are finally moving on with some climate action in this parliament, and I know the Australian people support that. But if we really want to get to 1½ degrees warming—and I want to remind senators: if you believe in the science of climate change and if you look at the changes we are seeing in Australia and around the planet, that is happening at one degree of warming above pre-industrial levels. Record floods, record heatwaves, record fires, loss of habitat—that is happening at one degree of warming. The Paris Agreement wants to limit warming to 1½ degrees. That is a 50 per cent increase on what we've already got. That's not reducing warming in the system by 50 per cent and taking us back to half a degree of warming or reducing warming by 100 per cent and taking us back to 350 parts per million; that is already saying, 'We wave the white flag and accept this planet is going to warm by another 50 per cent on what we've already seen.' That's supposed to be a good thing. Yet the current government's plan is to have us on two degrees of warming. That's a 100 per cent increase on what we've already seen in our lifetimes.

Under the previous government we were on a business-as-usual scenario of three to four degrees of warming, which means that large parts of this planet won't be inhabitable. I don't need to tell senators what the costs of that will be not just to the environment, ecosystems and habitat but to us as a species and to everything we love and stand for. The only thing that's going to fix that is systemic change, and systemic change means political change. It means coming in here with courage and standing up for policies and changes that will at least limit warming on this planet to 1½ degrees.

If we are serious about that, the most important thing we can do is stop all new oil and gas exploration, offshore and onshore, in this country. You can be sure that's what the Greens stand for. That's what we will come into this place and fight for every day, as we have fought through the swamp-and-desert years of the LNP over the last decade in this building.

Paul Scarr (Queensland, Liberal Party) Share this | Link to this | Hansard source

The idyllic plains! Beautiful valleys!

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

We have been here fighting like hell, Senator Scarr, every day for climate action. That's what we do as a political party, and that's what we will continue to do. Every day we come in here we are going to fight for our communities, for our ecosystems, for marine life, for the animals on this planet and for all the things First Nations communities, we and—we know—many other Australians put value on.

Andrew Bragg (NSW, Liberal Party) Share this | Link to this | Hansard source

This is the second time I've been given an opportunity to speak to this bill, the Offshore Petroleum and Greenhouse Gas Storage Amendment (Benefit to Australia) Bill 2020; I also spoke to this bill in the last parliament. I acknowledge there are many laudable objectives that sit behind this private senator's bill. There has been a strong tradition in our system of parliamentary democracy where the parliament determines it is necessary to impose various laws to regulate the conduct of corporations, be they taxation laws, conduct rules, continuing protection rules, and so on and so forth. We're now living through a period where we have the greatest concentration of corporate power in the fewest possible hands. I'm talking here most directly about the concentration of power inside the big technology companies. But it has been the same for resources organisations and banking organisations. They have had, over the years, a very strong concentration of power. So, when you look at the best way to manage that, I think it's very important to apply principles. I personally am a subscriber to the Menzian form of liberalism, which dictates that you should have the minimal amount of government regulation in order to promote private investment and private capital coming into the market.

Now, here are a couple of the key facts when you look at the resources sector or any major part of the Australian economy. I always start with the fact that we don't have enough money to run this country. We never have had, and that is why we have relied so heavily upon foreign capital for the past 250 years. As far as I can see, there are no pools of domestic capital which are going to come to our rescue and fund these major resources projects. Certainly, the major pools of capital which it may have been possible to use for this purpose can't be used, because the superannuation funds have a sole-purpose test. They are only allowed to invest for the purposes of their members' retirement savings, and whatever you may think about that scheme, that is, I think, a sound principle which should not be pierced at any time in the future.

But it is, therefore, the foreign investors that will be required to fund these projects, and I note that there are great debates about the use of fossil fuels. I think there is no doubt that there will be a need to use gas in the future for many decades, and whether you look at the view of the scientists, the chief scientists and the former Chief Scientist Alan Finkel or whether you look at the major investors like Larry Fink of BlackRock, everyone is of the view that in the short to medium term there is going to be a need for gas. So the idea that we're not going to have any more gas means that we're not going to have any more electricity or any more lights on in Australia, which is very worrying; it's very concerning.

So we are where we are; we need to get the gas out of the ground. There will be a need to fund that activity and, as far as I can see, there is no domestic pool of capital which is going to allow that to happen, and that's where the foreign capital comes in, and we need to send the right signals to the market that we're not going to engage in undue sovereign risk. Certainly, we have seen this movie before. We saw Mr Connor and his attempts to try to engage in some kind of quasi-nationalisation of resource assets in the 1970s, which led to what was, I think, 15 per cent inflation and a major economic catastrophe which had to be resolved with various measures.

So we have seen this movie before. I don't think we want to go back to that particular period, so we need to send the right signals that we as a country want to have that foreign investment. We want to have that foreign investment on the right basis. We will certainly be imposing conditions on corporate activity in Australia, and I think there is a case to be made for some of these organisations to pay more tax. Certainly, my former profession of accounting has done some good things for humanity, I'm sure. But it has also done some rather evil things, and I think that transfer pricing, which has led to the base erosion and profit shifting where, effectively, companies have been able to establish a mining organisation in Singapore, is frankly outrageous. I don't know that there are that many mines in Singapore or many more resources projects in Singapore, but certainly they are managing to pay a very low rate of corporate tax in Singapore on the back of their significant projects that are being undertaken in Australia.

Now, I'm for lower taxes and I think it's great that Singapore has been able to cut taxes, and I wish that we could have a similar trajectory here in Australia. I note that the UK is now looking to reverse its misguided policy of raising corporate taxes, and we look forward to the UK heading back to a corporate tax rate which I think is going to be 19. So we should be seeking to compete with Singapore, as well as addressing the major issue of base erosion and profit shifting, which is the mechanism by which the resources companies have been able to fleece Australian taxpayers of taxation revenue. I think there are certainly areas here that have been raised by the crossbench that are worthy of further consideration, certainly in terms of the tax burden that is placed on some of these foreign multinationals. As I say, we need to do it in a way which is not going to spook foreign investors, but certainly we can do it in a way which is at least going to have a better return to the Australian taxpayers.

I would say that there are some laudable objectives here, and I think it's good we have an opportunity to raise some issues that are not the issues of the government of the day, and that's what we're here to do as a Senate. I am pleased to make a second contribution on this bill after making a contribution on it in the last parliament. I would summarise my comments here by really reminding the Senate that it is very important that we are cognisant of the fact that we don't have enough domestic capital to fund these major projects.

For people that believe these projects do need to be financed, that finance needs to come from somewhere. There is no domestic pool of capital that is going to be able to meet this investment need, so therefore we need to send the right signals to the global capital markets that we are a stable democracy that has reasonable corporate laws that are clearly understood and that don't have terms which are not easily understood or are too broad. In the case of this bill I think there is no doubt that the benefit to the Australian community test would be a very, very broad test. It would be hard for a court of law to define what that is. As a legislator, I don't think it is our role to handpass our role to the courts down the road and let them effectively become a quasi-legislature. That is our role. If people want to put a more specific concept on the table, they should do that. That's the first one. We don't want to spook foreign investors; we need to have clear corporate laws.

The second point I want to summarise is that in terms of taxation—this is not a tax bill, I should note—I think there is a very strong case for some of these foreign multinationals to pay more tax. I regret very much that my former colleagues in the accounting profession have done so much damage to our taxation revenue collection system by devising these schemes. I do think that it's going to be difficult for us to resolve the base erosion and profit shifting issues without some sort of coordinated effort with other like-minded countries, and I'm sure that we can do that in the years ahead. As I say, I think there are some laudable objectives here, but we need to do a bit more work on it.

Dorinda Cox (WA, Australian Greens) Share this | Link to this | Hansard source

I rise to make my contribution to the Offshore Petroleum and Greenhouse Gas Storage Amendment (Benefit to Australia) Bill 2020 on behalf of the Greens. The bill is a very simple one. It inserts a new object into the act which will ensure that the exploitation of these natural resources is for the benefit of the Australian community. One Nation claims that this bill will fix the offshore gas issue, and that the government and the Australian community don't profit enough from these projects. Whilst the Greens agree that the fossil fuel companies don't pay their fair share of tax, we know that the problem goes further than this. We also know that this bill is being worded too broadly to actually give its desired effect.

The Greens believe that if we truly want to benefit the Australian community, these gas and oil reserves are best left in the ground. There is no other option to do that. We should be leaving it there because we now need to transition to renewable energy sources. This applies to offshore projects, which this bill relates to, but onshore projects as well, as Senator Whish-Wilson has already outlined. We are in a climate crisis, and the science could not be any clearer. No new fossil fuel projects should be approved, opened or expanded. Not one, and definitely not the 114 that are currently in the pipeline.

It's really not that hard to understand, but it appears the major parties are still struggling, in particular, when the global markets indicate differently. They are telling us that the customer wants cleaner, greener energy sources. From the perspective of trade, and from mine as the Australian Greens spokesperson for trade, we know that 65 per cent of this gas actually goes offshore. It goes through the trade that we export to other nations around the world. We need to make sure that we actually create that certainty for investors and the public with that environmental and social governance legislation regulation that is required. It is already in the EU, it is already in the US and it is already in the UK, so we need that here. We must do that to make sure that the customer at the other end of the pipeline is happy with that greener, cleaner resource that we trade with them.

We need to think about the benefits not just in terms of money, but in terms of what that drilling of dirty gas brings to our future generations? What message does that continuation of those fossil fuel projects say to them? We know what that is because of the case where those brave kids who tried to prove that the federal government had a duty of care. The government claimed they didn't have a duty of care to protect future generations from the impacts of climate change. Senator Whish-Wilson has already outlined this, but this is about the assessment of those fossil fuel projects. These kids were initially successful, but had their hope ripped away from them when the then environment minister, Sussan Ley, now in the opposition, spent taxpayer money appealing this case. I mean, what benefit does exploitation of gas and oil accelerating the climate crisis bring to them? It's the legacy that we are passing on.

Even though in this place those opposite will argue that scope 3 emissions don't matter, what we know is that these will benefit the rest of the global community—in particular small island nations already feeling the effects of climate change—and we think we've done the least to contribute that. But in the Torres Strait Islands, in that landmark case last week in the UN Human Rights Commission—which they've won—they argued that actually article 27, the right to culture, and article 17, the right to free and arbitrary interference with privacy, family and home, were proven because we are not caring about the impact of these offshore gas projects on other nations.

What are the benefits to our oceans that are becoming more acidic, our unique wildlife, our reefs that are dying and the cultural heritage of our First Nations people? I'm glad Senator Pocock mentioned the Munupi clan of the Tiwi Islands, which I had the privilege to sit with on country and listen to their evidence. We need to think about whose land, sea and sky country this is, and what the impact is on those people. We cannot continue to ignore the voice of First Nations people at every step, right through to rehabilitation. We also cannot ignore First Nation businesses that need to be involved in this. We can't ignore First Nations indigenous knowledge and science, and they must be incorporated in all of this.

This bill specifically deals with offshore projects, which are all happening on unceded sea country that traditional owners have not provided their free, prior and informed consent to. On top of that we need to legislate the UN Declaration on the Rights of Indigenous Peoples, which authorises us to be able to provide that free, prior and informed consent. But for over 200 years our voices have been ignored, our culture is continually being destroyed in this country, and if the government really wants to give First Nations people a voice, this bill does not require a referendum, and it will have an immediate impact on acknowledging our sovereignty.

With gas being the largest polluter in Australia—it's as dirty as coal and it's overwhelming that, like coal, the majority of the gas is extracted in Australia and, as I said, exported. It is not for domestic use. That is a myth. It's one of the biggest myths that is being bandied around in this place and throughout the media to the Australian public. It is the case because huge amounts of energy—dirty energy—is needed to extract and process that gas into liquid so that it can be exported. They're burning that. The Global Methane Pledge says that, so we have to listen to the science.

PRRT is a huge issue. We need to crack down on tax avoidance in Australia, and big companies need to pay their fair share as Senator Whish-Wilson has already outlined. And I'm glad to hear Senator Bragg and others in this place have been part of the previous Senate inquiries into PRRT. This is about making sure they pay their fair share of rent in this country. As Senator Whish-Wilson said, there is no other business in Australia or globally that gets its resources for free and sells them on for profit—and yet this is what's happening in this country with these gas companies. We have to make sure also that these companies are not a revolving door for ministers. They grant leases and exemptions and funding for these companies to continue the climate-wrecking projects that they once rolled out into their cushy jobs with the same companies.

We know that the major parties have the strong hold—I'm so glad to see us united on the crossbench—but it's really no surprise that they're against any attempt to ensure that corporates in this country pay their fair share of tax. These companies are eroding democracy—Senator David Pocock talked about state capture and the importance of our democracy—are destroying our planet and are wrecking the cultural of First Nations people around the country. Unfortunately, the governments in this place have been letting them do that. They are letting them continue to do that because they're too scared to stand up to them and do what the public actually wants them to do, enact change and say no to new fossil fuel projects. This is happening from the Barossa to the Beetaloo to Narrabri and to Scarborough in my home state. We need change and we need it now.

What we have to do is make sure that in the PRRT changes—the Australian Taxation Office has already named those gas companies, and Chevron is one of them, as systemic nonpayers of tax, despite Australia's gas exporters earning more than $50 billion in exports. The tax office says that they don't expect any significant revenue to be paid under the existing tax system until the mid-2030s. That is unreal. In 2017 Shell admitted that they would never pay PRRT, especially on their 25 per cent share of the Gorgon project.

The last election was very clear in its message. The Australian public wants meaningful change on climate change action, and we emphasise 'meaningful'. I'd like to take this chance to remind the government, yet again, that we are not seeking just to reduce climate emissions by 43 per cent. We now need to be ambitious and reduce them by 75 per cent. We cannot keep opening new fossil fuel projects. You cannot claim to care for the environment by supporting climate- and environmental-wrecking projects like Beetaloo and Barossa, and you cannot claim to care for First Nations people and their voice while you're ignoring their opposition to drilling in their sea country, fracking on their country and removing their sacred rock art. You cannot do that.

Whilst the Greens support this bill in principle, we do not support One Nation's move to prevent members from contributing in the second reading debate. Mine is being cut short. This is the place of debate, and we shouldn't be trying to gag that.

Paul Scarr (Queensland, Liberal Party) Share this | Link to this | Hansard source

You guys did it in the last sitting.

Dorinda Cox (WA, Australian Greens) Share this | Link to this | Hansard source

Sorry?

Paul Scarr (Queensland, Liberal Party) Share this | Link to this | Hansard source

You gagged debate in the last sitting.

Dean Smith (WA, Liberal Party, Shadow Assistant Minister for Competition, Charities and Treasury) Share this | Link to this | Hansard source

Excuse me, Senator Cox, continue your contribution through the—

Dorinda Cox (WA, Australian Greens) Share this | Link to this | Hansard source

Hang on, has Senator Scarr got a contribution?

Dean Smith (WA, Liberal Party, Shadow Assistant Minister for Competition, Charities and Treasury) Share this | Link to this | Hansard source

Please continue your contribution through the chair. Thank you, Senator Cox.

Dorinda Cox (WA, Australian Greens) Share this | Link to this | Hansard source

Yes. Thank you. Can I seek leave to make my further comments?

The A Cting Deputy President:

You still have time for contribution.

Dorinda Cox (WA, Australian Greens) Share this | Link to this | Hansard source

The Greens are proposing a second reading amendment, which has been circulated. I move:

At the end of the motion, add ", but the Senate:

(a) is of the opinion that:

(i) Australia's offshore oil and gas industry is a large contributor to climate change, and

(ii) it is to the benefit of the Australian community that no new fossil fuel projects are opened; and

(b) calls on the Government to:

(i) introduce a 10% Commonwealth royalty for gas extraction, creditable against the petroleum resource rent tax, and

(ii) end all public subsidies of coal, oil and gas, and

(iii) implement a long-term solution to ensure industry covers the full cost of offshore decommissioning, informed by overseas models that are underpinned by transparency and accountability".

Thank you.

Dean Smith (WA, Liberal Party, Shadow Assistant Minister for Competition, Charities and Treasury) Share this | Link to this | Hansard source

Thank you, Senator Cox. You're seeking leave to move your second reading amendment, as circulated, on page 1611.

Dorinda Cox (WA, Australian Greens) Share this | Link to this | Hansard source

Yes.

The ACTING DEPUTY PRESIDENT: Thank you very much.

Malcolm Roberts (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

I move:

That the question be now put.

Dean Smith (WA, Liberal Party, Shadow Assistant Minister for Competition, Charities and Treasury) Share this | Link to this | Hansard source

The question is that the second reading amendment moved by Senator Cox and circulated on sheet 1661 be agreed to.

Dean Smith (WA, Liberal Party, Shadow Assistant Minister for Competition, Charities and Treasury) Share this | Link to this | Hansard source

The question is that the bill be read a second time.