Via Domainfax:
Oil and gas multinationals would pay an extra $4.2 billion in tax over four years under a royalty policy costed by the Parliamentary Budget Office, as resource giants prepare to be hit by new taxes in Tuesday’s budget.
The independent assessment of the policy submitted by the Greeens shows a 10 per cent royalty style system would bring in as much as $15 billion over the next decade as Australian LNG production booms, but such a move is not being considered by the Turnbull government because of the risk it poses to future investment.
Instead, it is understood the government will change the “uplift concessions” for all new projects, potentially opening a new battlefront with industry heavyweights over the definition of “new” under the petroleum resource rent tax.
Tuesday’s budget could see it cut to as low as 5 per cent, bringing it into line with the concession companies receive for the development of established projects that are considered less high-risk.
Good stuff. A big and dumb royalty for a sector that is currently paying bugger all for the privilege of selling the nation’s gas. Indeed, on the east coast households and businesses are subsidising the gas cartel to give the gas away at huge losses in Asia.
That highlights one problem with The Greens proposal. If the gas cartel isn’t broken first then it will simply pass the cost of the royalty on in local prices we’re it is busy gouging.
What we need is a royalty plus domestic reservation. Then we’d finally be getting some value from our gas exports, as well as crashing east coast energy prices to end the great hollowing out, as well as putting decarbonisation back on track.
The gas majors will argue that it will retard development of future resources but, frankly, who cares. What’s the point in the nation paying a cartel to dump it in Asia at huge losses anyway?
