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

I was going to make a point of order that I thought I was on my feet first, if that helps. In rising to debate this private members' bill, Offshore Petroleum and Greenhouse Gas Storage Amendment (Reporting of Gas Reserves) Bill 2018, I'd like to start by reflecting on the great work that this chamber has done on corporate tax avoidance and on tax justice and tax transparency, and I do mean that genuinely, in a 'tripartisan'—if that's the right word—spirit. Senators of all colours in here have worked very hard in recent years to try and improve corporate tax transparency.

I note with some pride and satisfaction that it was my colleague ex-Senator Milne that initiated the first Senate inquiry into corporate tax avoidance, back in 2014. A number of senators, including myself and others in this chamber, had been lobbied quite hard and extensively by various groups to have this Senate inquiry. Tax Justice Network was one of them. Another one was Micah Challenge, and some fantastic advocates out there for tax justice. Tax justice, tax equality and transparency are absolutely critical, not only to general economic wellbeing in this country but some of the critical issues that we debate in this place, like inequality. Getting the big corporations to pay their fair share of tax, to stop rorting the system, is not only absolutely fundamental for fairness and justice but it's exactly what the Australian people want their representatives in parliament to do. They want us to stand in here, they want us to review the laws and they want us to change the laws and make sure we crack down on dodgy tax rorts.

One of the biggest tax rorts we have in this country, which we have had numerous debates on but have failed to reach an agreement on, is the petroleum resource rent tax, the PRRT. I like to call it the petroleum 'rort' rent tax, because that's exactly what it is. Some of the biggest, most powerful, most profitable companies on the planet—and I'm talking about the big oil and gas companies, like ExxonMobil and Chevron; they're all thrown into the mix—extract resources that are owned by the Australian people and pay bugger-all for them; in fact, they pay virtually nothing for the resources. It's an input into their production. That input is owned by the Australian people, yet we get nothing back from these companies. In theory they should be paying some kind of royalty based on the value of those resources to the Australian people and they should be paying corporate tax. As we discovered in the inquiry—as Senator Ketter rightly said, he chaired the Senate Economics Committee inquiry into the petroleum resource rent tax—the Greens initiated that inquiry but Labor chaired it. We discovered that a number of these companies actually don't pay income tax either. In fact, while the committee proceedings were underway, the Australian Taxation Office took Chevron to the Supreme Court and then the High Court to make sure that they paid their fair share of tax in their crackdown on tax loops, such as transfer pricing.

Why is it important that we fix the petroleum resource rent tax? There are two fundamental reasons. One Nation are in here to represent the first reason. That is, it's just not fair that some of the wealthiest, biggest corporations on the planet aren't paying their fair share of tax, especially when the average Australian has to pay their tax and has to pay it on time, and if they don't then woe to them. As we know, the Australian Taxation Office will crack down on them. It seems fundamentally unfair. There is no justice at all in the fact that because you're powerful, because you can employ the best lawyers and have millions and billions of dollars at your disposal you can somehow rig the system—and, may I say, a totally imperfect system, a system that's too easily rigged. That's another issue we have to address. We have to change some of the laws around these things to stop corporations getting away with unethical behaviour.

The first fundamental reason is that we need justice. We need everybody to pay their fair share and we need a system of changes to our existing laws and regulations that will enable that to occur. That's bloody hard in a place like this when some vested interests that don't want the system changed are in here lobbying and donating to big political parties to make sure we don't get changes. That's also part of the rigged system. We call it the special interests effect: once again the rich and powerful have the means at their disposal to come in here and make sure they get what they want and your average punter on the street doesn't.

Let me tell you what the second fundamental reason is that we need to fix the petroleum resource rent tax. We discovered this during the inquiry, and it became really obvious to me when we heard from a number of witnesses, including Dr Craig Emerson, who was the architect of the petroleum resource rent tax. This tax enables the extraction of marginal resources. It is the tail wagging the dog in terms of oil and gas and energy in this country. We heard from a number of submitters, including directly from the horse's mouth, the big companies themselves, that, if we change the petroleum resource rent tax system, their projects would not be viable. I thought, 'Is that just corporate BS and spin?' It turns out that they actually have a point. A number of these projects are almost suboptimal, and, if it weren't for our extremely generous tax system, especially the concessions they get, they wouldn't be out there exploring for that oil and gas.

The Labor Party has made its position on this very clear this morning, and I know the Liberal-National Party have made their position very clear. They want to support oil and gas and the hydrocarbon industry, but it wouldn't surprise anyone in this chamber if I said the Greens don't. We don't want to see any more extraction under massive trillion-dollar projects that pollute our planet. It's as simple as that. We know that, with political conviction, we can move to 100 per cent renewable energy in this country. We just need to get on with it. In fact, in 2010, the Greens, working with Labor, did bring in the gold standard with the clean energy package. And, as we know, the human wrecking ball, Mr Tony Abbott, destroyed the clean energy package, just like he, sadly, destroyed marine protections that passed this Senate last week. So we're back to the drawing board.

We find today, given the current chaos within the LNP, the Liberal-National Party, that it looks like our Prime Minister, Mr Malcolm Turnbull, is going to walk away from any kind of policy on energy and tackling climate change. So we've had absolutely no progress on tackling what is arguably the biggest issue and the biggest challenge of our generation, which is reducing emissions and tackling global warming. That's extremely relevant to this debate today. If we want to hold big corporations to account, if we want tax transparency, we need to understand why the government are so stuck in their position, why they've ignored the recommendations of the Callaghan review and refused to change, even at the edges, any part of the petroleum resource rent tax system. Their own independent inquiry has recommended those changes, but what they've done is just kick the can down the road. They haven't even changed some of the uplift rates.

Let me tell Australians this. If you're an offshore oil and gas company, you can claim your exploration expenditure at an uplift rate of 15 per cent per annum. If you go out and spend $5 billion exploring the Great Australian Bight, the value of those tax credits is uplifted at 15 per cent per annum indefinitely. For the expenditure on your oil and gas fields while they're operating, it's five per cent per annum plus the bond rate and 15 per cent for exploration plus the bond rate plus your decommissioning costs. And, if you spill oil while you're exploring—like, sadly, we have seen off north-west WA, and we've seen some terrible examples of it in the Gulf of Mexico—guess what? That's tax deductible too, and it's uplifted at 15 per cent. Where companies have multiple projects and can actually transfer these tax credits between projects, the Australian taxpayer, the public, are incentivising these companies. We are giving money to some of the biggest, wealthiest corporations. And it is actually what the system is designed to do. It's fundamentally set up that way. So it's not illegal. It might sound bloody unethical, but it is not illegal. It is the law, and it's been deliberately written so that big corporations, the dirtiest polluters on the planet, some of the biggest tax dodgers on the planet, some of the wealthiest companies on the planet—which, as Senator Ketter said earlier, treat their workers like crap—are being incentivised because we won't change the petroleum resource rent tax system in this country.

I don't know if senators are aware what those current tax offsets, those tax credits, are worth to these big polluters, these big wealthy companies. Last time I checked, in 2009, when we looked at their total tax offsets, they had $9 billion, and that rolled over into 2010-11. That's $9 billion of tax offsets. In other words, they don't have to pay tax. It's $279 billion in the last 10 years. That's how much tax they haven't had to pay thanks to this system that's set up to incentivise and encourage big oil and gas companies to go out and extract uneconomic hydrocarbons in risky areas like the Great Australian Bight. Deepwater Horizon comes to mind. The Great Australian Bight has some of the deepest oil exploration waters on the planet and some of the roughest oceans. Believe me, I like those oceans being rough. It means big swells in places like Tasmania and Victoria. I have seen what the Southern Ocean can dish up. It has some of the most marginal conditions on the planet for oil and gas exploration, yet we are incentivising these companies to come in and explore—because of this tax system.

If we want to tackle climate change; if we want future generations to have what we've had; if we don't want to see the planet burn, sea levels rise, oceans acidify and the Great Barrier Reef gone within our lifetimes, which is a very real proposition; if we don't want to see longer droughts and more suffering for our rural communities; if we don't want to see damage to our fishery industries like we have seen in Tasmania to rock lobster, abalone and aquaculture from warming waters in the ocean and viruses and pests that bring about the loss of jobs and export growth; if we actually care about our planet then we need to crack down on this tax rort today. But we can't do that in this bill.

This bill encourages more transparency, and so we applaud the intent of this bill. We will support anything that makes this industry more transparent. What we need to do is remove the concessions in the petroleum resource rent tax that allow these ridiculous amounts of tax offsets to build. It wouldn't surprise me if these were a trillion dollars in 10 years time. We need to put in place a royalty floor, a platform, so that we are guaranteed every year to get money back from these big polluters and big wealthy companies that aren't paying for their resources. That's why the Greens have called for a couple of things.

We want to change the uplift rates in the petroleum resource rent tax. We want to remove decommissioning costs as a deductible expense against the petroleum resource rent tax. We want a flat 10 per cent royalty rate on the wellhead value of all offshore oil and gas projects. We've had this costed by the Parliamentary Budget Office. This would be allowed to be expensed against the petroleum resource rent tax liability, so big companies could expense this. It would bring in about $1.4 billion in revenue every year to the Australian people. It would be collected from these companies, and there would be nothing they could do about it. We have submitted a number of these costings and we will be releasing them over time. This is the kind of reform that the Australian people want to see. Nobody out there believes this petroleum resource rent tax is a good thing, unless you are in the pocket of a lobbyist or unless you are taking donations from big oil and gas companies to give them what they want in this place. Nobody out there believes this is the right thing. They want to see tax justice.

I can tell you that the momentum is building across this country, as it is across this planet, to get politicians, to get the political class, to get parliamentarians, to act on climate and reducing emissions. While we speak now, plans are still underway to explore the Great Australian Bight. Companies are taking new seismic tests off Commonwealth waters around King Island in Tasmania, for example. I've been approached by the rock lobster industry and other industries to make sure that there is a proper approval process. At this stage, they feel what they're going through with NOPSEMA is a box-ticking exercise. There is a considerable amount of new science—and I've no doubt it wasn't paid for by the fishing industry, like so much fishery science is in this country—which is showing that seismic testing does have an impact on marine life and on commercial fisheries. There are a lot of things that tie back to changing the rort that is the petroleum resource rent tax. While we're there, there are many other things we actually need to do to fix our tax justice system.

The Greens went to the last federal election with a very comprehensive policy around tax justice. We've recently managed to secure, in this place, an increase in transparency through a private member's bill for tax disclosure. We've put up amendments to other tax bills to try and improve tax transparency, and we have seen the MAAL bill—which passed in this place—have some impact on clawing back billions of dollars of revenue from big corporations that haven't been paying their fair share of tax. But we need to go much further. We need to either ban shell companies altogether, as there's a push on in the US to do, or at least start with a beneficial ownership register of these shell companies, which are used so effectively to avoid paying tax. It interested me to read in an article the other day that Donald Trump has nearly 42 shell companies associated with his own business operations. We know these companies are used to dodge tax, and much, much worse. They're also used to launder money for organised crime, and so on and so forth. We need to know who owns these companies, or we need to ban them outright. While I respect there are some legitimate reasons for using tax havens, there aren't many good reasons. Mostly, they are used to avoid tax scrutiny. That's why they're called shadow jurisdictions.

The Greens would also like to see changes to transfer pricing, which we've raised in this place before, and we would like to see a comprehensive review of the system around our international treaties and obligations, and responses from the ATO working with countries or secrecy jurisdictions that won't share information.

All in all, the job's nowhere near done. There has been a lot of good work done in this chamber by a number of senators of all political colours, and I want to reflect on that today and put that on record. But it's not enough. If you actually want to make a difference then I and my party, the Greens, urge senators to consider restructuring real reform for the petroleum resource rent tax: crack down on the $279 billion of tax avoided by these companies. The system was set up in the 1980s for a totally different industry, an industry that was, essentially, petroleum and condensate; it wasn't set up for multibillion- and trillion-dollar offshore oil and gas developments. It's too complex, it doesn't work, it has no transparency, and it is fundamentally unfair that these companies can avoid paying what they owe the Australian people. Any other industry that buys inputs into its production, like things to make bricks, has to pay for that. Why is it that these resource companies don't have to pay for the resources that are owned by the Australian people?

While we're at it, we can actually do something to help the planet. We can make sure that the tax system isn't incentivising companies to go and explore marginal petroleum and gas that is not needed on this planet any more. We need to be moving away from our reliance on fossil fuels. We need to be going to a future that's 100 per cent renewable. If we don't, not only will we not meet our Paris targets, which are nowhere near good enough, but we will continue to see this planet change in our own lifetimes. It is happening right before our eyes now. It is happening in the oceans, and it is happening on land. It is changing. We have a massive moral obligation to do everything we possibly can to move to a different future for future generations. I urge senators to have a very close look at the Greens' proposal to put a 10 per cent flat royalty rate in for oil and gas.