An Oxford University expert says Australia would be $90 billion better off if it adopted European-style resource tax policies and argues the Turnbull government has given up on collecting a meaningful amount of revenue from some of its most valuable resources.
In one of a suite of new submissions to a Senate inquiry, Oxford Institute for Energy Studies academic Juan Carlos Boué warned unless Australia “radically overhauled its fiscal regime” it would have the second lowest share of government revenue from oil and gas in the world.
Australia is on track to eclipse Qatar as the largest exporter of gas by 2020, but is expected to only earn $600 million in 2018 – the same amount of revenue the government earns in beer tax every year – compared to Qatar’s $26.6 billion.
Calling the result “a silver medal finish that no Australian should desire,” Mr Carlos Boué, a former industry consultant, found Australia had an effective tax ratio of 21 per cent on gas resources, falling below the 35 per cent or more taken by the North Sea nations of Denmark, the Netherlands, Norway and Germany.
There are no taxes because there are no profits. The exports are all loss-making on an all-in cost basis. That leaves huge depreciation, write downs and carry forwards compounded by rent tax uplift rates to ensure no taxes are ever paid.
The broader inventory on the cartel is stark:
- profitless exports;
- leading to artificial shortages and discriminatory pricing at home;
- with no tax take and little in royalties, and
- the complete derailing of the Australia’s planned decarbonisation.
In short, all Aussie households and business are paying the gas cartel to take our gas away, plus to wreck our contribution to fighting climate change.
It’s not just highway robbery. It’s beyond belief.