Gas cartel pays no tax, forces Aussies to pay more

While the gas cartel is busy forcing Australian energy bills up by sending our gas offshore, turns out the industry also pays minimal tax.

According to a new report from The Australia Institute (TAI), major gas companies haven’t paid income tax in seven years despite earning $138 billion from their Australian operations:

New analysis of data published by the Australian Tax Office (ATO) shows that five of the gas industry’s most prominent companies have paid no income tax for at least the past seven years, despite a combined income from their Australian operations of $138 billion.

Four of the five members of the Australian Petroleum Production & Exploration Association (APPEA) (Arrow Energy, Australia-Pacific LNG, Chevron and ExxonMobil) that haven’t paid any income tax are foreign owned resulting in all profits heading straight offshore…

Gas company income tax

Key Findings:

  • In a 2012 APPEA claimed Queensland coal seam gas LNG companies would have paid around $11.2 billion in federal income tax by 2020. They have paid almost none.
  • In 2015 Chevron estimated it would have paid around $4 billion in “direct taxations and royalties” by 2020. It has paid no income tax or resource tax over that period.
  • In 2013 Shell claimed that its Prelude floating LNG project would pay $12 billion in taxes over the life of the project. Shell has since acknowledged it will never pay PRRT has paid no income tax since 2015.
  • An eighth company, Australian company Santos, paid just $6 million income tax on $28.9 billion of income, and paid no income tax from 2015 to 2018 and 2020.
  • A thorough overhaul of taxation of the oil and gas industry in Australia is long overdue.

“It’s unbelievable that you can make $138 billion and pay nothing in tax. Our governments should not be letting this happen and we need an overhaul of how the oil and gas industry is taxed in Australia,” said Mark Ogge, principal adviser at the Australia Institute.

“The gas companies promised us billions in revenue and instead we end up with little in our pockets and a whole lot more climate impacts.

“We trust our politicians to tax our natural resources to the benefit of all Australians, but instead some of the largest gas miners, members of APPEA, are paying absolutely nothing.

“The federal government is virtually giving the resource away for free, gift wrapped in subsidies, mostly to foreign-owned companies, many of whom pay little if any tax.

“Imagine if you trusted an agent to sell your house to get the best deal possible, but instead they gave it to their mate for next to nothing. This is what is happening with our gas resources.

“Far greater scrutiny should be given to the close ties between some of our political representatives and the oil and gas companies who benefit from their largesse with our money.”

Such extreme corruption, from top to bottom. And nobody other than a few like MB and TAI seem to care.

Unconventional Economist

Comments

  1. All this renders any claim of sovereign risk in the event of domestic gas reservation meaningless.

    • Display NameMEMBER

      Yep. Absurd given the gouging and rorting going on. If the average punter understood there would be pitchforks out for these companies.

  2. DingwallMEMBER

    Classic!
    While I acknowledge that if they had paid these taxes our dipsticks in power would have squandered it, imagine if went to hospitals, ambulance services, remote community education and services etc etc etc ………………..

    • ^^
      Where the Bluddy hell are the rest of the media right in the middle of an Election Campaign? Not there for the People of course, as aren’t “Our” momentarily showboating politicians – who’ll soon go back to hiding in backroom deals. ICAC NOW!

    • bolstroodMEMBER

      When the gas Cartel runs the Prime Ministers office all these things are possible,
      It is called State Capture, and the Australian State is in the Fossil Fuel industry bag.

      • DingwallMEMBER

        Technically you could argue it is their fault……….. they are so sh!t they haven’t been able to force the Libs out……. really really sh!t

  3. Maybe if pollies were given the right to a 1% commission on all new tax revenue from primary production there might be some changes.

  4. Tassie TomMEMBER

    Great title – “… forces Aussies to pay more”

    Every time someone doesn’t pay tax, everyone else has to pay more. I wish that point was hammered home by whatever side of parliament suggests introducing a “great big new tax”.

  5. Serious question, why no tax? I know trains cost a lot up front, are they still writing those off current profits?

    • My guesses, massive front end depreciation plus transfer pricing. Profits are booked offshore after selling the outputs more cheaply to a controlled intermediary.

  6. BigBakaMEMBER

    Maybe you could take this article out from behind the paywall and then we could share it!