You have got to love Canberra. Always the easy option:
An alliance of Greens and crossbench senators say they would not back Labor’s higher taxing regime on oil and gas unless it doubles the amount raised.
…The gas industry largely welcomed Treasurer Jim Chalmers’ announcement in the May budget that reforms would raise an additional $2.4 billion over four years by limiting deductible expenditures allowed under the tax to 90 per cent of revenue.
The Greens and crossbench are right. The tax is woefully inadequate. Even doubled, it is tiny. More fruits of Jim “Chicken” Chamlers and his fear-driven policymaking.
But that is not the biggest problem. That comes down to this:
The change would hit five major offshore liquefied natural gas projects – Chevron’s Gorgon and Wheatstone mega projects in WA, Japan-owned Ichthys off Darwin, Woodside’s Pluto, and the Shell-led South Korean joint-venture Prelude, according to Parliamentary Budget Office costings done for the Greens in July.
The projects are all offshore in the west and north. East coast gas is mostly onshore. The tax paid by the Curtis Island LNG three is exempt from the PRRT because the gas is coal-seam, not maritime, and so misses Commonwealth jurisdiction.
Yet these three are just as undertaxed and immensely more economically destructive. A point made by one of the owners, Origin Energy, in its profits yesterday:
The feedback comes as Origin Energy reported a jump in east coast gas prices in the June quarter, despite the price controls introduced by the Albanese government in the wholesale gas market. The 10 per cent increase in prices from the March quarter helped offset the impact of a 16 per cent dive in LNG prices for Origin.
That is, local gouging offset falls in global prices. That drove the electricity prices wild and raised utility bills by 50%. Yet this business is barely taxed.
Why isn’t anybody in Canberra trying to reform this egregious market structure? It would be much more beneficial for the economy and budget.
Because they are all chasing easy wins for party political gain.
Speaking of which, this is just pathetic:
Victoria will go it alone on its ban on natural gas in new homes from next year, with other state governments rejecting the move on Monday.
As experts continued to debate whether the ban will push up Victoria’s carbon emissions because of an increase in brown coal generation, some states said they would use gas connections to blend in hydrogen as part of plans to reduce emissions.
This unreform was recommended by the corrupt Grattan Institute, financed by Origin, to conduct research by its former executive Tony Wood.
Not only is it symbolism over substance, but it will also be environmentally destructive.
It is a pure distraction from the need to break the undertaxed eastern gas cartel that has wrecked the energy transition, war-profiteered and delivered the worst inflation shock in forty years.
