Via the AFR:
The federal government is planning to toughen up on allowable deductions under the Petroleum Resources Rent Tax but is expected to exempt existing projects from the new regime to avoid the creation of sovereign risk.
Sources have said the changes, to be announced at or around the May budget, will lead to increased revenue but not in the short term, including the four-year budget estimates period.
They are expected to involve cutting back the so-called “uplift rate” that determines the level of deductions that oil and gas ventures can carry forward into future years, an area of the PRRT framework that industry sources say is the most vulnerable as government looks to tighten up the rules.
In other words, it will do nothing. There are no new projects coming. LNG is built-out and facing an epic glut right through the 2030s. Either we tax existing projects or this is worthless.
This is an action replay of the Government’s gas reservation failure in which it installed the policy only to not use it.
The good news it it means there is a double free kick for Labor when it’s elected. Now it can hike both gas reservation and taxes with out having to go through complex legislative debates. A flick of the pen will do it.
