Labor’s threat to slash-and-burn NDIS funding gives the lie to Jim Chalmers’ claim that the budget would offer “more help for some of the most vulnerable in our community”, argues Graham Matthews.
Petroleum Resources Rent Tax (PRRT)
Multinational gas corporations are expected to sell $50 billion worth of Australia’s liquefied natural gas (LNG) overseas every year, but it will be at least 10 years before the national treasury receives any rise in tax revenue. Even then, many projects will never pay any tax to the government for the resources they export.
A report prepared for the federal government into the operations of the Petroleum Resource Rent Tax (PRRT) shows that revenue from the offshore gasfields will remain static until at least 2027.
The Tax Justice Network (TJN) has criticised the failure of the federal government's review of the Petroleum Resource Rent Tax (PRRT) to recommend a new royalties regime to force the major gas corporations to pay their fair share of tax.
The review by former treasury official Mike Callaghan, instigated by federal Treasurer Scott Morrison last November, recognised problems with the existing PRRT system and recommended some changes for new liquified natural gas (LNG) projects.
In April the Federal Court ordered the oil and gas multinational Chevron to pay $340 million in tax. For the past few years this company has gotten away with paying no company tax at all by claiming that it did not make a profit.
The truth is it made billions, but the company inflated its expenses by having its Australian operation take a loan from a US subsidiary with an interest rate 25 times higher than the market norm.
US multinational energy corporation Chevron faces an increased tax bill of $340 million after losing an appeal against the Australian Taxation Office (ATO), over a landmark profit-shifting case.
The full Federal Court on April 21 unanimously upheld a previous decision that Chevron engaged in illegitimate transfer pricing by paying a higher rate of interest on a loan from its subsidiary to shift profits from Australia to the US.
Taxpayers will subsidise the clean-up costs of oil spills in the Great Australian Bight under the terms of the controversial Petroleum Resource Rent Tax.
Treasury officials have confirmed that clean-up costs for oil spills from exploration wells would be classified as “exploration expenditure” under the PRRT regime, meaning they would be tax deductible for oil companies and could be held over and “uplifted” into future years at an annual rate of 17.5%.
“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.