Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Hansard source

I should get a few facts on the table here, seeing that this is a matter that has been subject to some misleading press speculation. Condensate was made exempt from the crude oil excise in 1977 to encourage the sunrise industries investment in the North West Shelf gas project. Condensate is a light oil processed in association with natural gas. The budget removes this start-up concession some 24 years after the project came on-stream—24 years after the project came on-stream! The measure will have no impact whatsoever with regard to the price of LPG, petrol, diesel or similar products, since these are all traded on the global spot market. It will have no impact on Western Australian revenues. Excise payments will be deducted from the royalties Western Australia receives from the North West Shelf gas project but the Commonwealth will make up the difference. Nor will it affect other gas projects in offshore areas. They will continue to be covered by the petroleum resources rent tax regime.

What removing this concession will do is give the Australian community a fairer share in the benefits of resource exploitation on the North West Shelf. The concession has been worth almost $1.5 billion to the six participants in the project over the past five years alone. And this was at a time when oil prices were at about half their current levels. With oil prices now at record highs, continuing to exempt condensate from excise would deliver windfall gains to these companies. The North West Shelf gas project is now firmly established and highly profitable. It no longer needs this massive subvention from Australian taxpayers. The concession has become an anomaly that can no longer be justified.