Steph Hodgins-May (Victoria, Australian Greens) Share this | Link to this | Hansard source

by leave—I move:

That the Senate take note of the report.

I note the final report of the Select Committee on the Taxation of Gas Resources. Our inquiry heard loud and clear from Australians that they are not getting a fair share for their gas resources while multinational corporations rake in enormous profits. I think Ken Henry said it best when he said, 'Cut the crap and just do it.' That became the defining message to this inquiry from the public.

During the global energy crisis, gas companies made an estimated $112 billion in windfall profits, yet the petroleum resource rent tax actually fell during that period. It's a rip-off. Australia's gas tax is dramatically lower than that of other countries like Norway, Qatar, the UK and Canada. We heard from witness after witness that PRRT is fundamentally broken and that it is riddled with holes and deductions that let gas corporations minimise what they pay. It is a broken system.

We also heard from gas company after gas company, which, I might add, refused to send their CEOs. They were too weak to send their CEOs. This was a national inquiry into an issue that is of probably the most significant public importance in recent time, and the CEOs of those big gas exporters didn't even have the guts or the courage to show up. Then, when we heard from their lower executives who turned up, they parroted gas industry talking point after gas industry talking point. These are the talking points that even the Prime Minister himself started parroting. We had the ludicrous scenario of the Prime Minister quoting the gas lobby talking points and vice versa ad nauseam.

The capture is stark. The revolving door is spinning faster than ever, with nearly every single resources minister going on to work in the fossil fuel lobby. And those political donations that continue to roll in certainly seem to pay dividends when policy is being written by this government. It is disgraceful and the Australian people are absolutely appalled.

These are the key findings of our report, and I think that what's not in the final report is more telling than what is in there. We heard an explosive analysis indicating that the Japanese government collects more tax from Australian gas than Australia does. Well done, Japan! You are acting in the interests of your people, as the Australian people are demanding this government do. But it is failing to do so, with all these faux excuses that were dismantled by witness after witness in our inquiry.

Evidence to the inquiry showed that a minimum 25 per cent gas export tax could raise up to $17 billion per year to go towards things like electrifying our country and helping people through this really tough cost-of-living crisis that they are experiencing. We heard that really the government needs to stare down 10 gas export projects—that's it—to raise $17 billion worth of revenue. And evidence from Treasury, from economists, and even from gas companies themselves contradicted the claims of the Prime Minister and industry that an export tax would impact trade relationships and would drive up prices overseas. This was rebutted by Treasury, it was rebutted by the gas industry and it was rebutted by Ken Henry.

We heard that the burden of any export tax would overwhelmingly fall on multinational gas shareholders, not international customers, because prices are set largely through global markets and long-term contracts. So every time we saw the Prime Minister get up and say, 'Now's not the time,' we called nonsense, based on the evidence our inquiry heard. It is the profits of those gas exporters that are at stake, and that is exactly who the Prime Minister is going in to bat for. Evidence showed that most Australian gas project would remain highly profitable, even with a 25 per cent gas export tax. Taxpayers already subsidise the gas industry, through infrastructure, public support and fossil fuel subsidies, yet we receive barely anything in return.

We heard witnesses saying, 'We're not like Norway; they have a stake in their fossil fuel industry and they take on the risk and take on the reward.' Well, we're the mugs; we just take on the risk, by investing in the infrastructure. We don't take on the reward. We don't tax these guys. We heard that Shell, a company that has announced double profits through this illegal war that's happening, paid no PRRT in more than 10 years. In over a decade, they paid not a cent of petroleum resource rent tax. INPEX, who are plundering the Northern Territory, fall into that category as well.

Importantly, witnesses stressed that the window to secure public revenue for gas exports is closing as the global transition away from fossil fuels accelerates. When the Prime Minister says, 'Now is not the time,' again, we all rubbish on now not being the time. These corporations are set to make obscene windfall profits through this illegal war—blood soaked illegal profits—and now is exactly the time that the Australian public expect them to pay what they owe.

Despite all this overwhelming evidence, the committee did not support actual recommendations for reform. As I said, what's missing from the report is incredibly telling, and I'll let the public join the dots as to why we didn't get those recommendations. But the Greens have been on the record for a very long time saying that we must tax our gas exports, and Australians deserve and expect it of us. Labor is trying to kick the can down the road rather than confront the reality that Australians are being ripped off and that the great tax rip-off continues under its watch.

We see the Prime Minister continue to repeat and echo those gas talking points. On the same day, hours before this report was due to be published, they said, 'Look over here at our gas reservation policy written by industry'—nothing to see over there. How cynical can you get? People see through it. They see the smoke and mirrors and the distraction from the real issue, and they call BS.

This government is literally taking the Australian public for fools, and it's simply not working. We've seen polling reflecting that the vast majority of Australians want to tax our gas and want a fair share of our resources—and not unreasonably. Labor knows that the system is broken, but they are too timid, too weak and too captured to challenge the gas lobby. What other industry gets their inputs for free? Farmers don't get free seed or fertiliser. Bakers don't get free flour. Why does the gas industry get gifted our gas? Chevron was gifted to the tune of $300 billion worth of our gas for their Gorgon project—money that then flowed into Trump's inauguration fund. What a disgrace. This budget could be an opportunity for real reform, to stare down the gas cartel and get some money back for Australians instead of cutting essential public services. But I fear that the cowards in Labor will not do that.

If Labor thinks the book is closed and that, if we don't get a gas tax in the budget tonight, that's the end of it, then it has got another thing coming, because I warn you that this campaign is just getting started. We have seen and heard firsthand the fury of this community campaign of everyday Australians saying, 'Enough is enough.' 'We want our fair share,' they say. They look to countries like Norway, with multiple trillion-dollar sovereign wealth funds, and they imagine what Australia could be paying for—not begging for scraps and cutting 160,000 people off the NDIS. We could be funding free, high-quality universal child care. We could get dental care into Medicare. There is so much we could do with this money, and all it would take is for this government to stare down its gas industry donors.

The Greens will not rest until we scrap the broken PRRT; until we introduce, at least, a 25 per cent gas export tax on our resources; and until we use that money to pay for things that Australians need and Australians deserve. Let's cut the crap and get it done.

Dean Smith (WA, Liberal Party, Shadow Assistant Minister to the Shadow Treasurer) Share this | Link to this | Hansard source

I'm privileged to make a slightly calmer and more rational contribution to the very important issue contained in this report. The Australian Greens and Independents have sought to hijack what is a genuine sentiment in our country. That genuine sentiment is for a fairer return for Australians from the extraction of our natural resources. Indeed, in my home state of Western Australia this is a growing sentiment. It's been hijacked by the Australian Greens and Independent senators because they want to use it as camouflage for their desire to end fossil fuels. Contrary to the contribution of the senator before me, the enthusiasm for the campaign is running out of steam—excuse the pun.

This report confirms what the coalition has said from the outset: Australia does not need a reckless new gas tax, and Australia needs more gas supply, more investment and more energy security. The Greens and Senator Pocock came to this inquiry with a prewritten answer to tax gas harder, punish investment and dress up an antigas campaign as tax reform. The coalition's position has been clear and consistent: no arbitrary windfall levy, no retrospective tax grab and no policy that risks jobs, investment, regional communities or Australia's reputation as a reliable energy supplier, especially not at this critical geopolitical time.

The PRRT is working. It was consciously designed to tax profits once major high-risk projects recover their enormous upfront costs. That is exactly what is happening. The industry is already paying its required tax. Australian Energy Producers has confirmed that the oil and gas industry contributed $21.9 billion last year and remains the second-highest corporate taxpayer in Australia. The Australian Taxation Office evidence also corrected the false claim made by the Greens and Independent senators that gas companies are not paying tax. Corporate tax paid by oil and gas reached $10.4 billion in 2023-24. The Prime Minister himself rejected the dishonest claim that gas is being exported tax free. Labor has not backed the Greens position, because even Labor knows the numbers do not support it. But let's wait and see exactly what Labor might do in coming months or the next year.

This is the political reality. The Greens and Senator Pocock are isolated, and their campaign has more to do with shutting down gas than with improving the tax system. A 25 per cent export levy would not be modest. Wood Mackenzie's analysis found it could push effective tax rates above 80 per cent, reduce project value by up to 94 per cent and put future production and revenue at risk. You do not increase tax revenue by making projects 'uninvestable'. You increase revenue by getting projects approved, attracting capital, producing more gas and keeping Australia competitive.

Woodside, Chevron, INPEX and Santos all made the same basic point. Investors made multibillion dollar decisions in good faith under existing rules, and changing those rules again so soon after the 2023 PRRT reforms would damage Australia's reputation. INPEX described the 2023 reforms as a handshake that meant pens down on the PRRT. Instead, only a few years later, the industry has been dragged back into a politically driven tax debate. Chevron warned that frequent tax reviews create fiscal instability. Woodside said the PRRT does work. Santos said retrospective changes should not be supported. That spells danger for gas exploration, gas production and jobs in the gas industry in Australia.

We have heard the Greens and others talk about Norway but they ignore the basic difference. Norway coinvests with industry and shares the risk. Australia relies on private capital. You cannot copy Norway's tax rate while refusing to copy Norway's investment model. This inquiry has also exposed the activist agenda behind the campaign. Some submitters were not arguing for better tax design; they were arguing to stop new gas projects altogether.

Mehreen Faruqi (NSW, Australian Greens) Share this | Link to this | Hansard source

Yes.

Dean Smith (WA, Liberal Party, Shadow Assistant Minister to the Shadow Treasurer) Share this | Link to this | Hansard source

Yes, says Senator Faruqi—sprung! That matters because gas is not another industry; it underpins manufacturing, jobs, exports, household energy reliability and the energy security of key partners including Japan and Korea. Japan's warning should be taken seriously. Australia's LNG reputation has been built over decades. Surprise retrospective taxes would send exactly the wrong message to our closest trading partners. Regional communities know what the activists ignore. In places like Onslow, in my home state of Western Australia, the gas sector delivered jobs, infrastructure, local business opportunities and long-term community investment.

The coalition's recommendation is simple and responsible: there should be no arbitrary windfall levy on gas exports. Australia needs an increased tax take, not an increased tax rate. That means encouraging investment, approving projects faster, reducing duplication, and backing the sector that helps pay for the services Australians rely on. The Greens and Senator Pocock have a different ambition. Their ambition is not tax reform; their ambition is to punish the industry. The coalition wants the industry to keep investing, keep employing, keep exporting and keep paying tax in Australia.

If I might just go back to where I started, there is in this country and in my own home state of Western Australia genuine sentiment that people want to see more of the value return to their local communities. That is a national interest. The question will soon become: what is the best way to do that that does not imperil future investment, that does not imperil our trading relationships, that does not imperil the future investment in local community?

Mehreen Faruqi (NSW, Australian Greens) Share this | Link to this | Hansard source

The planet deserves better; people deserve better. While the Labor government cries poor, it has been another really good week for the boss of your lobbyists, who walk away with a smile and another year's freedom to destroy the planet without worrying at all about paying tax on enormous profits. That this pantomime is so familiar makes it no less depressing. If you earn a wage, you pay tax. If you don't earn a wage and you receive income support, you probably still pay tax. If you purchase goods and services, you pay tax. If you access health care, you pay tax. If you contribute to your super, you pay tax. If you take out home insurance, you pay tax. If you pop down to the pub for a schooner—or in my case, a cheeky mocktail—you pay tax.

But if you are a multibillion dollar company extracting and exporting Australian gas, chances are you pay no tax or next to no tax. Nurses in Australia pay more personal income tax than oil and gas companies. Teachers pay double the tax paid by oil and gas companies. The Labor government even collects more each year from student debt repayments than it does from companies who dig up and ship out our natural resources. The truth is companies like Chevron and Santos are massively ripping us off. There is zero tax paid on over half of all gas exported from our country. While the major gas companies rake in billions, loopholes and write-offs mean they are paying negligible amounts of company tax or the failed petroleum resource rent tax.

The Albanese government is making bad budget choices yet again. They refuse to tax their big donors and make them pay their fair share, but they'll kick disabled people off the NDIS while finding hundreds of billions of dollars of public money for non-existent nuclear subs. They'll tinker with the housing policy in a performative act of so-called intergenerational equity and boast about their bottom line, but they won't scrap the punitive, disastrous fee hikes and funding cuts of the job-ready graduates scheme. By taxing gas exports at 25 per cent, we can collect $17 billion a year to pay for the things people need to live a good life. It shouldn't be a big ask. It is not a big ask. It is just about fairness.

Yes, the Greens do want to make the top end of town pay their fair share, because it is way past time. We want to invest in quality public services, to provide care for those who need it, to provide free education, to make sure housing is affordable and accessible to everyone, and to transition to clean energy and a fossil-free future. We are proud of that. I want to congratulate my colleague Senator Hodgins-May on her incredibly hard work on this inquiry. Under her leadership, the committee has produced an undeniable and overwhelming body of evidence to support a gas tax. We know that this is really popular policy. People know what is fair and what is unfair.

My heart and hopes have been lifted by the community's loud and vocal support for the Greens plan to legislate a minimum 25 per cent tax on gas exports to fund urgent cost-of-living relief. The Albanese government knows this too. They know it very well. They have heard it from hundreds of people and hundreds of experts. The ball is now in their court. They can be cowardly and side with war-profiteering multinational gas corporations, or they can stand with the people of this country.

Susan McDonald (Queensland, National Party, Shadow Minister for Resources and Northern Australia) Share this | Link to this | Hansard source

I don't know that I've ever been more distressed by a populist, un-Australian agenda than I am by this one. I came to this parliament because I believe in Australia. I love that we are one of the First World countries of the world, that we are prosperous, that we can afford fantastic health care and education, and that we have roads, schools and hospitals. We will debate in here about where they should be and how much we should spend on them, but at the end of the day we have choices. We have choices because Australia is one of the most blessed countries on the planet. We have coal, oil and gas. We have uranium, critical minerals, rare earths and all the base metals that we need to trade. It is mining that pays the bills in Australia. The first, second and third biggest taxpayers in this country are from those industries, and we are blessed to receive foreign investment to allow us to unlock that potential.

But we tinker around with our settings and our trade relationships at our peril, and I can tell you why it's at our peril because other countries have gone down this road. Let me tell you the story of another country similarly blessed with minerals, resources and agricultural produce. In the 1980s, they too decided to become a socialist country. They too decided to change their settings on foreign investment and exports, and they absolutely cruelled their gas and beef industries. I speak of Argentina, which now seeks to reposition itself with highly competitive, aggressive, assertive trade settings to attract gas investment back to that country. We don't have to do that. Australia has enjoyed 40 per cent of the world's LNG investment into this country. That has fuelled small businesses and big businesses. It has fuelled royalty payments and PRRT payments and, of course, the employment of hundreds of thousands of Australians, who have enjoyed jobs that are more than double—sometimes four or five times—the average salary. These are the people who live in Australia and do the hard work in order to access these resources.

We speak specifically about gas. Gas is not just for energy. Gas is used for fertiliser that allows us to only use a fraction of the surface of the planet in order to grow the amount of food that we need for our nations—for our population. Gas is used for polythene pipe. Gas is used to make all sorts of fuels and the little tubes that you're hooked up to in hospital. They're used for the gas that keeps food safe. It is used for so many reasons.

And Australian gas is important. It's important because, when we mine it here, when we access it here, it's not only important geopolitically—it's important right now for our trade arrangements for liquid fuels. It is important for Australia's prosperity, and, if you care about emissions, well, Australians emissions are lower than in some of the other countries that would be accessing their gas. They're three reasons why we should be extracting gas here.

But we will not continue to extract gas here if we scare off investors. I've already talked about the slide from 40 per cent to 15 per cent, and, if we go with this ridiculous, crazy, socialist plan of increasing gas taxes when we have a very well researched and substantive arrangement for offshore gas, the PRRT—onshore gas is captured by state royalty plans—if we go down this road, we risk losing that investment. That is an investment that does pay the bills.

Let me run through some of the absolute lies that have been peddled by the anti-fossil-fuel activists around this. The first one is that we pay more for gas that we import than we export—lie. We don't import any gas at all.

The second is that nurses and teachers pay more tax than is paid in PRRT. As an ex-economist, they're lies, lies and damn statistics. If you take a 10-year period and you average wages for or tax paid by nurses and teachers and you do it over the same period that these projects are coming online and not yet producing—or, if they are producing, have not yet been able to deduct their capital costs, which is the arrangement under the PRRT—you can make the numbers say anything at all. That is another lie—to say that nurses and teachers pay more tax and then pick a specific period to skew the numbers.

Another is that beer pays more tax than the PRRT, again picking numbers and periods of time over these huge projects. There has been $440 billion spent in Australia to develop our gas reserves over the last 15 years—extraordinary numbers. Beer does not produce more income and tax for Australia than gas does.

The ATO is constantly misquoted as saying that gas companies are tax avoiders. They have corrected the record in this regard in person and in writing, over and over, and yet the lie's still repeated.

The next one is that Japan receives more tax on Australian gas than Australia does—another outrageous lie that has been absolutely put to bed by the Australia Institute's report itself. The Australia Institute claims that energy import tax produces A$8 billion per year for the Japanese government. It excludes the fact that that is on coal and oil as well as gas. The Australia Institute then says $1.8 billion of that energy import tax comes from gas; however, Australian gas only accounts for 40 per cent of that. So we're now down to $720 million. These are the Australia Institute's own numbers. They don't want to clarify their references.

It is dangerous if we seek to fiddle with the investment settings that provide so much income to Australia in payroll tax, in company tax, in state royalties and, yes, in PRRT. It's like a hockey stick, the amount of income that we will receive from that as the capital expenditure is expensed and the superprofits of 40 per cent are paid to Australia over the coming years. This is a dangerous agenda, and guess who is funding it. It is people who have a clear agenda to shut down fossil fuels in Australia—the things that produce our energy, that produce our fertiliser and that could, in future, provide our liquid fuels and our fuel security right here in this country. They won't tell you that the 25 per cent gas tax—that policy, that regime—is being pushed by organisations like the Sunrise Project and the KR Foundation. When this same agenda, the anti-gas agenda, was run in England, it was later found by NATO to have been run by Russia seeking to undermine the UK's energy and economic sovereignty. Do you not think the same thing is happening here in Australia?

We should be angry, because this populist agenda run by people who seek to shut down investment in oil and gas and coal in Australia is run by people who do not want us to be successful. They will dangle baubles like 'You will get more tax' and 'We will spend it on things that do not make us money into the future and that will leave Australia broke and poor in the future'. This is an anti-Australian agenda. I plead. I beg. If you have any interest in Australia and Australia continuing to be a First World country, ask some more questions. Ask who is funding these organisations—who is funding the Australia Institute, who is funding IEEFA, who is funding Punters Politics, who is funding senators in this place's private foundations and the KR Foundation. These organisations are receiving millions and millions of dollars that put any gas industry contributions to shame. In fact, I only wish they would fund us in the same way that this dark money that seeks to shut down Australia's prosperity is flooding into this country and is funding this outrageous campaign that will damage us. The government's move for the reservations policy will seek to do the same. I beg you: ask the better questions.

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

I don't think there's anything more Australian than a fair go—than wanting a fair go. It's fine for the National Party to care about a fair go for big, multinational tax avoiders. It's not fine for them to stand up for the average Australian who would actually like to see the big, foreign owned, multinational companies pay their fair share of tax and royalties. From the good senator from the National Party, Senator McDonald, it's quite fascinating to hear the turning of the tables on the dark money coming from the green sector when she's been part of a political party that has been quite happy to campaign against renewable energy alongside massive misinformation and disinformation campaigns funded by the fossil fuel industry, including mostly foreign fossil fuel interests. It's interesting to hear the tables being turned there.

I want to make a few comments because I did participate in one of the hearings. I want to congratulate Senator Hodgins-May for her work chairing this committee. It was a very intense three days of hearings in Canberra and Western Australia. Other senators were there.

When Senator McDonald talks about this un-Australian campaign against a gas tax, or against the PRRT, I want to remind senators that it has been a long, long road to try and get these big, multinational companies to pay their fair share of tax. We had nearly three years of inquiries, from 2017, 2018 and 2019, into companies like Chevron who were avoiding tax through profit shifting and managed to, through the ATO, get some revenue for the Australian people—in fact, many billions of dollars of revenue for the Australian people. We had an inquiry specifically into the PRRT where we did also go to Western Australia in 2018 and 2019, and the government, to try and undercut the Senate inquiry, released the Callaghan review, which recommended some changes to the PRRT system. Even a Liberal-National government, as the government was at the time, realised it was a completely unfair tax system designed for another era. The PRRT—and this came from Craig Emerson himself, who appeared before the inquiry at the time—was designed for Bass Strait oil and gas exploration in the eighties, not for large, value-added LNG projects. That's not what the PRRT was designed for. It was completely not fit for purpose. The government tweaked the edges. We had some changes to uplift rates. But there was no substantial reform.

I say to the Liberal Party and the Labor Party: this issue's not going to go away. Australians have a pretty good idea about a fair go, and they know when they are being conned. And they are being conned. One thing that really struck me from the hearings in Perth, listening to the executives that did turn up from the big oil and gas giants, was that it was really obvious that they felt like they were doing us a favour. They more or less said: 'We are doing you a favour. If it weren't for us, none of your resources would be exploited. None of this gas that we are basically profiting from and sending overseas and paying very little tax on would happen without us. So you have us to thank for opening up your resources.' Well, I pointed out to them that the taxpayer actually does deleverage a lot of their risk and has spent hundreds of millions of dollars in doing so over the years. They're not doing this out of the goodness of their hearts. They are doing it because they make significant profit out of this, as they do all around the world. You could say the same thing of any company that's saying: 'We see a business opportunity. We're going ahead. We're going to invest in it. We don't want to pay any tax because we are doing you a favour by employing people.' Hello! That's not how the world works. The sheer arrogance of these answers was like, 'You owe us! You, the Australian people, owe us for coming in and making billions of dollars of profits out of your resources which you, by the way, own. They'd be sitting out there in the ocean and nothing would be happening to them at all if it weren't for us. You owe us, so how dare you ask for us to pay a fair share on the export of your resources overseas.' Really? It was that simple to me. I was absolutely dumbfounded by the attitude of some of these big companies.

It's time for that to change. It's time for the Australian government to say to these companies: 'Now you need to pay a fair return to the Australian people, who own these resources.' If they don't, then too bad. Don't exploit these resources. Kick them out. We don't need more fossil fuels. We don't need new developments like the Browse project off the North West Shelf. What we need to do is transition to renewable energy. Of course, Senator McDonald deliberately ignored the fact that Australia has an abundance of sunshine and wind power. We have geothermal and hydro. We have so much renewable energy. Renewable energy is already producing 50 per cent of our wholesale power, and it's only going to increase into the future. We don't need more fossil fuel projects. We need the ones that are here now to pay a fair return to the Australian people. Here's an idea. If they did pay a fair return, there are plenty of things we could do with that money. We might start by compensating communities for the damage that their fossil fuel emissions are doing to our climate and environment. That might be a good place to park that money. I seek leave to continue my remarks later.

Leave granted; debate adjourned.