If a report from Domainfax is true then the Xenophon dregs are complete morons:
It is understood next month’s budget will tackle longstanding concerns about the way energy companies are taxed by curbing “uplift concessions”, which determine tax deductions associated with exploration and construction. But in a concession expected to win industry support, the changes will exempt existing projects.
…This disparity has caught the interest of crossbench senator Rex Patrick, who could help the government pass its plan to cut the corporate tax rate from 30 per cent to 25 per cent for all companies. Senator Patrick and his Centre Alliance colleague Stirling Griff this week signalled a willingness to vote in favour of the tax cut after previously ruling out support.
With Australia poised to overtake Qatar as the largest exporter of gas in the world by 2020, critics of the PRRT note Canberra is forecast to receive a much smaller tax take than the Middle Eastern country.
“On the face of it the legislation is simply not supportable, but if it is packaged together with a number of measures [it is],” Senator Patrick told Fairfax Media.
They can’t be this mad or stupid, surely. There are no new projects coming. The LNG glut remains huge and all of our cheap gas is already on the boat:
The tax needs to be retrospective or it is useless.
For that matter, unless it is levied as a pre-profit royalty it still won’t make a fair return. There is $80bn of useless LNG plant to write off and depreciate with or without generous uplift rates.
Worse, given the cartel has virtually a free hand setting discriminatory prices for local customers, it will simply reclaim any new tax in higher prices.
Giving up tax cuts in return for this would be a form of national suicide.
Meanwhile, Energy Minister Josh Frydenberg has damn near snapped his owns spine with a gas contortion this morning. Yesterday Frydenberg admitted the truth:
“Let me ask you this, Alan. Why in New South Wales, where more than 80% of the power comes from coal, have prices continued to go up? And the reason is because you import more than 95% of your gas. Gas sets the price of electricity.”
Now we get this today via The Australian:
Energy Minister Josh Frydenberg has welcomed news AGL Energy plans to build a new $400 million gas-fired power station near Newcastle, but warned that plant’s 252 megawatt capacity will do little to fill the shortfall left if the company proceeds with its intended closure of the 1800 megawatt Liddell coal-fired power station.
“I welcome more investment, whether it’s by AGL or other players in domestic gas facilities, but let’s bear in mind this is an additional 200 megawatts of capacity,” Mr Frydenberg told ABC radio.
“It’s a peaking plant. When Liddell closes that’s 1800 megawatts that will be taken out of the system.
“We have the Australian Energy Market Operator on the record saying that were Liddell to close in 2022 and then not sufficient investments made, that there is a greater chance of blackouts, and we have the ACCC on the record saying that if Liddell was sold to a third party competition would go up and prices would go down.”
We don’t need Liddell. It won’t drop prices much because “gas sets the price of electricity”. What we need is cheaper gas. The stuff in the ground in NSW is not cheap enough to extract. The stuff being shipped offshore is.
We need domestic reservation. Holding back only 10% of east coast exports would crash the gas price and resolve all our energy woes in one fell swoop.
The firms shipping the gas lose money on every molecule that they ship. That’s why they pay no tax!!!!
