It’s wonderous the tricks a whore politican will turn to earn a quid, via Twitter this morning:
Freshly minted Resources Minister Keith Pitt is off to an inauspicious start, threatening a big new tax on the Australia’s wealth-creating gas sector just two days after his swearing-in. The Morrison Gov’t is too focused on itself to deliver leadership & good policy
— Joel Fitzgibbon (@fitzhunter) February 7, 2020
Except that the gas sector pays no tax. Is it really the ALP position that that is too much? Qatar is pulling 26x the revenue from its gas royalties. Our gas cartel is paying no tax at all and never will as things stand. Previously via the ABC:
Oil and gas giants operating in Australia may not have to pay tax for years to come, as they accumulated $324 billion worth of tax credits in 2017-18.
Australian Taxation Office (ATO) statistics show the amount of tax credits, which can be used to lower liabilities in future years, has risen from $282 billion in 2016-17.
The figures reignited calls by some groups for a 10 per cent royalty to replace the petroleum resource rent tax (PPRT).
Quite right. But the Government is already running scared from itself, at the AFR:
“New taxes are not the solution our economy needs,” Senator Canavan tweeted on Friday night in a swift response to a story in The Australian that the government was considering a gas tax hike to prop up its budget.
Mr Frydenberg responded that the speculation was “wrong” and said the Treasury review would not be finalised until after the May budget.
“The review into gas regulations referred to in the @australian article was announced in Nov 2018 and will not be back to Govt before this year’s budget,” Mr Frydenberg wrote on Twitter.
Meanwhile, the gas sector is melting down as China pushes away cargoes, also at AFR:
Total’s head of gas, renewables and power, Philippe Sauquet, said the company regarded the force majeure declaration as a negotiating tactic.
“There is a strong temptation from some long-term customers to try to play with the force majeure concept,” he told investors last week.
“To say I cannot take my cargo under the long-term contract, but I would like to buy spot, is contradictory.
“Of course, we have to be careful; if there is a real quarantine in all unloading ports in China, we have a real case for force majeure … but for the time being this is not the case. For me it is ordinary negotiation.”
Expect prices to crash to unimaginable lows ahead and for more contracts to break. Coronavirus might just turn out to be the long awaited LNG contractpocalypse that resets global LNG as more of spot-based market.
Australia should also take the opportunity to rewrite its gas market regime to break the export cartel.
Don’t waste a good crisis, I say!
