There is a push to squeeze more from gas companies into the public purse as profits soar.
Proposed changes to the Petroleum Resources Rent Tax (PRRT) announced as part of the federal budget will claw back an extra $2.4 billion over the next four years.
Crossbenchers are calling on the government to go further instead of tinkering around the edges, as well as look into a resource rent tax.
Independent MP Allegra Spender said the changes didn’t come close to giving Australians their fair share of record profits from resources being sold overseas, with an extra $40 billion going into gas companies’ coffers last year.
“This change is going to collect little more than one per cent of that each year,” she told reporters in Canberra.
The Wentworth MP said the government needed to take the pressure off workers propping up the budget through higher income taxes.
“If you just fiddle with these taxes, then you miss the opportunity … to rebalance away from workers, away from Australian families and to get the full benefit of the Australian resources,” she said.
Ms Spender added that tax reform now through a resource rent tax as the critical mineral sector grows would also position Australia to benefit into the future.
“If we don’t get on with a resource rent tax then we are absolutely failing the next generation.”
North Sydney independent Kylea Tink said the government needed to look at bold tax reform “rather than just tinkering around the edges and hoping that nobody gets upset in the process”.
Her crossbench colleague Monique Ryan said it was ridiculous Australians were missing out on resource profits while commodity prices are high.
“All Australians are losing out on the extraordinary profits being made from windfalls resulting from war profits,” she said.
The Greens also want the government to go further, saying the changes only bring forward some revenue and don’t claim an extra dollar in tax.
The minor party says it’s not good enough when the gas companies are happy with the changes which would bring in less than the revenue from the indexation on HECS and student debts.
“It is an utterly broken tax system,” Greens senator Nick McKim told ABC radio.
“What’s very instructive is the gas cartel loves it.”
Senior minister Penny Wong said the government had struck the right balance with the changes after admitting no offshore LNG projects have paid PRRT and that most projects aren’t expected to pay a substantial amount until 2030.
“The measure is … intended to address this problem and will require the offshore LNG industry to pay more tax sooner,” she told the Senate.
“This is about ensuring a fairer return to the Australian people from the resources they own. It’s also about providing certainty to industry and making sure Australia remains a reliable trade and investment partner.”
The Australian Petroleum Production and Exploration Association agreed the changes provide greater investor certainty for the industry.
But Ms Spender said bringing the taxes forward without increasing the revenue clawed from major gas companies would still short change Australians in the future.
“I don’t think it’s a worthy trade-off because we still have to face these revenue pressures later,” she said.
(Australian Associated Press)