Andrew Leigh (Fenner, Australian Labor Party, Assistant Minister for Productivity, Competition, Charities and Treasury) Share this | Hansard source

At the outset, I'd like to thank the member for Mackellar for bringing this important debate in the matter of public importance. Gas constitutes about a quarter of Australia's energy needs, according to the Future Gas Strategy, and it has an important role as a bridging fuel in the carbon transition. It's heavily used in manufacturing; cement, bricks, glass products, fertiliser and EV batteries all depend on a reliable and affordable supply of gas.

Australia exports around three quarters of our gas, which plays a role in the energy transition and in countries to our north. As the Future Gas Strategy notes, Australia can't reach our 2050 net zero targets without reducing and decarbonising our consumption of natural gas. The Future Gas Strategy notes that that'll occur through increased electrification of processes that currently use natural gas, replacing natural gas with low-emissions gases and converting remaining emissions from natural gas to be fully offset.

But the Future Gas Strategy also notes the role that gas plays in supporting our economy through the transition to net zero. Gas operates as a backstop for renewables, it's fast ramping and dispatchable, and it can complement variable renewable sources of power. California and Germany are just two examples of economies which have seen coal exiting, renewables expanding and gas supporting that transition. Gas does emit CO2, but 40 to 60 per cent less per unit of electricity than coal. Gas also supports hard-to-abate industries, like steel, cement, chemicals, and ammonia and hydrogen production. It can help households and firms as we make that clean energy transition. While batteries and pumped hydro, the so-called wet batteries, are increasing, they are still costlier, and gas has a bridging role to play.

We've seen over recent years Australia's LNG production declining. Domestic gas demand is falling as households move off gas production, notwithstanding that we still have five million homes connected to gas for heating, cooking and hot water. Our LNG exports fell to the lowest level in four years, largely as a reduction in LNG demand from Asia.

The member talks about the importance of fair taxation of the oil and gas industry, and it's important to draw the House's attention to the decision that the Treasurer made in 2023. As a result of the Treasury gas transfer pricing review and the Callaghan review, the Treasurer announced that the government would limit to 90 per cent the share of petroleum resource rent tax income which could be offset by deductions to 90 per cent from 1 July 2023. That sounds quite technical, so I'll put it in plain terms. Previously the west coast gas projects had not been on track to pay PRRT until the 2030s—we brought that into the 2020s. We can see that, over the latest budget update forecast, the government will collect $5.4 billion in PRRT over the four years to 2028-29, and that's on top of the corporate tax those companies will pay.

We've seen an increase in the company tax paid by the oil and gas sector from $1.1 billion in the five years to 2021 to $10.4 billion in 2023-24. Our changes have ensured that offshore gas companies are paying more tax sooner. They have increased the number of companies paying PRRT from 11 to 16 in 2023-24, and, collectively, the oil and gas industry paid almost $12 billion in taxes in 2023-24. That's on top of the important reforms that Labor has made to multinational tax. No government in Australian history has done more on multinational tax fairness than the Albanese government. No government around the world is doing more to improve multinational tax integrity than Australia. We put in place legislation to ensure multinationals pay their fair share of tax, setting a 15 per cent global minimum tax. We curtailed excessive debt deductions, increasing the revenue to the budget by hundreds of millions of dollars.

We've increased corporate tax transparency with a world-leading public country-by-country reporting register, ensuring that large multinationals operating in Australia need to disclose the amount of tax paid in countries around the world. If you are tendering for a large government contract, you now have to disclose your country of tax residency. We have boosted funding for the ATO's Tax Avoidance Taskforce by $200 million a year and extended the operation of the taskforce. We've put in place reforms which have curtailed the ability of companies to operate in opaque fashion through a beneficial ownership register, ensuring that firms need to disclose their true owners. This is an important measure when many Australians are looking to the government for comfort and reassurance at a time of fuel pressures. We have set out a collective approach with the states and territories, guided by four levels of action: level 1, plan and prepare; level 2, keeping Australia moving—that's the current level; level 3, taking targeted action; and, level 4, protecting critical services for all Australians.

We are ensuring that fuel supply flows to those who need it. This has been done with a range of measures, such as the appointment of a national Fuel Supply Taskforce Coordinator, Anthea Harris, and counterparts in the states and territories. We increased the penalties for petrol companies that rip off Australians. Those penalties were $10 million when this government came to office. We increased that to a maximum of $50 million or three times the benefit of the breach, or 10 per cent of turnover—and just recently we increased that maximum penalty to $100 million. We have provided additional resources to the ACCC to crack down on anticompetitive and anticonsumer conduct. We've released a fifth of the Australian fuel reserves, and we've targeted that at regional areas. We have announced the halving of the fuel excise for diesel and petrol and a cut to the heavy vehicle road user charge to zero for three months—measures which provide motorists with some relief at the bowser.

I remember the way in which the former prime minister Scott Morrison railed against electric vehicles. Under us, we've seen an increase in the share of EVs on the roads from single digits to double digits, and that means that there are fewer people needing to line up at the bowser and there is less pressure on our fuel supply. We have temporarily changed petrol and diesel standards to get more fuel flowing, and we have tasked the ACCC to issue on-the-spot fines.

The cabinet is engaging with international partners to keep supply flowing. We have a range of international relationships with countries such as Singapore and Korea, through which much of our oil flows. Indeed, in the case of Korea, they are also a significant recipient of Australian gas, so it is in the interests of both countries to ensure that that supply flows. The National Coordination Mechanism is an important way in which the Minister for Climate Change and Energy has engaged with states and territories on supply and distribution.

We understand that this crisis isn't homegrown. This is a crisis caused by the decision of the United States and Israel to take military action in Iran. At the outset of the conflict, the United States and Israel said that the principal goal was to decrease the chances of Iran being able to build a nuclear weapon. That having been achieved, the government has encouraged the US and Israel to bring the conflict to an early conclusion. It is in those countries interests, as well as in Australia's interests and in the interests of the global economy to bring this conflict to a swift end. Australia is not a significant player in the Middle East, but we have urged on all parties that it is time to reach a ceasefire and that it is time to bring this conflict to an end.

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