Only in Australia. As our major gas companies and some of the world’s biggest fossil fuel multinationals make tens of billions in profits from selling Australia’s hydrocarbons, the actual return to taxpayers is set to fall in coming years, the budget papers show.
In the Morrison government’s last budget back in April, taxpayers were finally going to see some return from the Petroleum Resource Rent Tax (PRRT) scheme, which has generated pitiful amounts of revenue in recent years courtesy of gas companies running up huge capital expenses and artificially inflating them.
Between 2022 and 2026 taxpayers would have seen $9.6 billion in PRRT revenue, according to the estimates in the April budget. In Labor’s budget tonight, that revenue forecast has been downgraded to $9.15 billion, despite a small forecast increase this year and next due to the surge in global gas prices. That surge has left local gas-based manufacturers struggling in Australia and delivered windfall profits for gas exporters.
According to the government, revenue is expected to fall “as production in maturing fields (including in the Bass Strait) declines and the prices of oil and gas stabilise. PRRT liabilities will be further weighed down by the cost of decommissioning parts of the Bass Strait fields, following a direction from the National Offshore Petroleum Safety and Environmental Management Authority to commence decommissioning works in coming years.” Oil producers will be able to claim the cost of cleaning up after themselves against their PRRT liabilities.
The downgrade in PRRT revenue reflects just how utterly unfit the scheme is to handle gas exports. Labor — like the Coalition, a recipient of generous donations from major gas exporters like Santos and Woodside — refuses to do anything to fix it.
Remarkably, the amount of revenue forecast for 2025-26, $2 billion, is 40% lower than the amount of PRRT revenue the Howard government earned in 2002-03 adjusted for inflation. In real terms, fossil fuel exporters are paying less PRRT than before the massive expansion of the Australian gas industry over the past 15 years.
Are the big fossil fuel companies playing Australians for chumps? Let us know your thoughts by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.
Thank god we have a relatively free press in this country and responsible and decent journalists like Bernard Keane and Adele Ferguson who are prepared to ‘shine a light’ on corruption and malfeasance when it occurs on a grand scale.
This story makes me furious! Bernard sums up the situation with:
“Labor — like the Coalition a recipient of generous donations from major gas exporters like Santos and Woodside — refuses to do anything to fix it.”
This is a clear case of “He who pays the piper, calls the tune”.
When are the well-meaning but gullible and naive “useful idiots” (as Vladimir Lenin might have described them) in the ‘Labor’ Party going to wake up to how they are being used and scammed?
In a post-script that follows the article, Crikey asks (rhetorically, I presume):
“Are the big fossil fuel companies playing Australians for chumps? Let us know your thoughts by writing to letters@crikey.com.au.”
That is like asking the question “Does night follow day?”
My response to this egregious situation is that, inter alia, our resource industry should be nationalized in its entirety and run in the interests of the Australian people, not for the benefit of the greed merchants in large capitalist corporations.
Comrades, it’s time to wake-up and rise-up!!
You are easily satisfied, Robert.
You say these journalists ‘shine a light’ and yet the article leaves us none the wiser about why the new federal government is failing to change the PRRT which serves Australians so poorly.
You quote the article saying Santos and Woodside donate to both major political parties. That’s a start, but don’t you want to know more?
How much do they donate to each party? Spoiler: Less than a million dollars a year. Don’t you wonder how such a tiny donation can yield those companies so many hundreds of millions?
How does the scheme really work?
Is it the jobs awaiting politicians after they retire from government?
Is it bribes that go unreported?
Considering how much goodwill another $20 billion would generate for any government that managed to collect it and spend it, don’t you wonder what the rationale really is for doing nothing to change the status quo.
What journalist will tell us the full details of how this works?
I constantly amazed, not that politicians can be easily bought – that’s a SOP & KPI, but how cheaply!
The reported amounts are clearly not accurate, probbably by orders of magnitude, so we need to look at other inducements, preferments, well paid sinecures for services rendered and other, more tangible benefits.
Property developers can arrange home renovations, to give one notorious example from the 80s.
I agree. Nationalise the lot. The people of Australia are being taken for chumps and ripped off wholesale. The politicians are doing well out of it so there is no motivation from them to change anything.
Vote independant from now on.
My feeling is that the rot is a lot deeper than we realise.
Recently I received an electricity bill,the first in the over a year since I installed a 5kW grid connect Solar system, as working at home, I run a very tight ship as far as using everything when tbe sun shines, almost nothing at night.
Well, no mystery there, lotsa overcast weather, and even small usage costs double what it used to, but knowing a lot about renewables etc, (as some may know I wrote the Labor plan) I followed it up a bit, as All who generate power from Solar get paid 8 cents/kilowatt hour, but are now paying app. 40 cents/hour, mainly because of high coal and gas expenses.
Seems a bit anomalous, why slug the Renewables by only paying 8 cents? when gas companies charge so much more.
Sure some Govt subsidies there, to help folk pay for their Solar, but usually quite a lot paid anyway, and certainly not paid for by the Electricity retailers, so I found that there is a Govt(?) department that sets the payment, – at least in Queensland, called the Queensland Competition Authority, who maintained that the amount was quite fair because “we” didn’t have to pay for poles and wires, metering etc., the which is not true, as I was able to read off my bill the cost of poles and wires, and separately the metering charge, – a bit over $370. per year, same as everybody else. Had to talk to his boss, would write. – did, same story from his boss, as “people” didn’t have to pay, no increase, – hard to believe the higher ups did not know, especially when informed otherwise.
So this ‘authority’ is deliberately enabling almost free electricity to the electricity retailers, – something smells a bit fishy.. – why?
People who work, the majority do not work from home, so this means the dynamics of expensive gas powered electricity make it no longer economical for all the people who have borrowed money to contribute Solar, Solar Rooftops in Australia contribute 35% of all renewables, this is an enormous contribution, and a great asistance to the Labor plan, the which is now Law, but this is now seriously sabotaged by this authority, based on fallacious beliefs.
As I pointed out to them, they are arguably committing a traitorous act, and fully intend to continue.
It may seem a small thing, but look at the push to encourage old folk to borrow against their equity in their house, to make up for inadequate age pension, – I enquired, to say double my pension, ie, half paid by a loan on my app. $45000. dollar house, I would not have any equity left in 14 years.
In the case of the Authority sabotaging the push to Renewables, it may be the Govt. deparment itself, not accepting times have changed or of ‘considerations’ from electrical retailer or fossil fuel company, or a bit of all three, but probably the light of day should clear that one up, things like compound interest being applied to a totally no risk older person’s home, hint at major changes in attitudes and practices required of the banking sector, possibly totally dissolve altogether, and start from scratch.