“Despite the fact that Australia’s on the verge of becoming the world’s largest exporter of LNG [Liquified Natural Gas], there’ll be no new revenues from the primary tax on oil and gas for the next two decades and perhaps even longer,” Tax Justice Network (TJN) researcher Jason Ward said on October 10.
The TJN is a coalition of churches, welfare groups, unions and other civil society organisations.
This primary tax is the Petroleum Resources Rent Tax (PRRT), initiated by Bob Hawke’s Labor government in the 1980s.
Despite the massive boom in LNG production, which will allow Australia to overtake Qatar as the world’s leading producer by 2020, the tax take has stalled.
TJN convenor Mark Zirnsak said the deductions companies can claim against the tax are so broad, the community is being denied sufficient return: “We need to make sure we’re getting the benefit for the community,” he said.
The TJN has called for a parliamentary inquiry to investigate why the tax is raising so little revenue. "We want the parliament to identify the loopholes and to identify what changes to the law need to be made to fix the loopholes," he said.
One of TJN’s concerns is the 18% “uplift” rate, which allows companies to deduct all their exploration costs and more.
Zirnsak said the community needs to have a discussion about how much potential revenue it is foregoing: “Into the future, we could be losing hundreds of billions of dollars on the gas boom”, he warned.
“This is important, because we want a decent society where we can fund our schools, our hospitals, our universities; we need this revenue for the benefit of the community.”
Just 5% of oil and gas projects in Australia are paying anything toward the PRRT. Only eight out of 149 resource companies paid PRRT in 2014–15.
The Greens have backed the call for a parliamentary inquiry into what Senator Larissa Waters called a "fossil-fuelled rort".
Adding to the pressure, the November 29 Sydney Morning Herald reported: “Multinational companies are claiming billions of dollars in questionable deductions while exploiting the nation's natural riches, using accounting tricks allowed to flourish under a hands-off government approach that is dudding Australian taxpayers of royalties.
“Underlying concern over whether the $200 billion liquefied natural gas industry is paying its fair share of tax, Auditor-General Grant Hehir discovered a $5 billion bonanza of deductions claimed by the operators of the North-West Shelf project in just one 18-month period.”
On November 28, Greens Senator Peter Whish-Wilson slammed the Turnbull government: “They have been trying to penny-pinch from backpackers and some of the lowest paid workers in the country, and yet they have been blind to potentially multi-billion dollar rorts from massive multi-national corporations.”
Certainly, a parliamentary inquiry into the oil and gas mining industry — extended into the mining industry as a whole — would be a valuable platform for exposing the tax rorts and other crimes of the multinational corporate gangsters.
But we need to go much further if we are to achieve economic justice and popular control over this critical sector of industry. As Socialist Alliance advocates the only way of doing this is to nationalise the mining and energy industries and place them under community and workers’ control.
“Put the country's huge mineral and energy resources under democratic management”, it argues. “That way, all the mineral and energy wealth can be used for the good of the community and the environment. Mining can be carried out in a planned and rational way to protect the environment and recognise Aboriginal rights.”
Green Left Weekly has been campaigning for the nationalisation of the mining, energy and banking industries for years. Unlike the mainstream media, we stand firmly on the side of Indigenous people, working people and the poor in their struggle for economic and environmental justice.
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