Prime Minister Anthony Albanese has ruled out adopting a so-called super profits tax on oil and gas producers to cover power price hikes as he flags additional measures to help ease cost of living pain.
Albanese has told ABC AM he’s not tempted to follow the UK and adopt a similar measure in Australia.
“No, we won’t be going down that track. What we will be doing is identifying how we can make a practical difference in addition to the announcements that we made during the election campaign about cost of living,” the prime minister said.
He blamed rising power prices approved by the Australian Energy Regulator on nine years of “policy chaos” under the Coalition, and spruiked Labor’s plans to invest in renewables and upgrade electricity transmission.
“We’ve had a neglect of the ageing grid. Our plan is to put downward pressure on prices by boosting renewables and storage in the grid,” Albanese said.
“We need to tackle cost of living. The good news is that our climate change plan will put downward pressure on prices at the same time as it creates jobs and economic activity.”
Quite right. There’s no need for a “super profits tax”. But there is a need for a tax. Any tax:
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…
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.
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Just as pressing is the need to trigger the Australian Domestic Gas Reservation Mechanism (ADGSM) to stop the phenomenal energy price shock with the stroke of a pen.
It appears we are going to be governed by an intellectually feeble weakling who is easily manipulated by “gotcha moments”.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
