The Albanese government, especially Treasurer Jim Chalmers, has made much of allegedly toughening the Petroleum Resource Rent Tax (PRRT) on LNG projects since the change was revealed pre-budget last weekend.
Under the changes to the tax, the Albanese government accepted Treasury’s recommendation to limit the proportion of PRRT assessable income that can be offset by deductions to 90%.
The change starts July 1 this year and will effectively bring forward the date that liquefied natural gas projects are expected to pay PRRT. Under current rules, they are not expected to pay any significant amount until the 2030s.
Now the government gets money earlier than had been expected — which is being touted as a toughening and a crackdown on big gas. At least four existing LNG projects will start paying PRRT in July — Chevron’s Gorgon and Wheatstone projects and Woodside Energy’s Pluto venture in Western Australia, and Inpex Corporation’s Ichthys LNG venture in Darwin (Inpex is Japan’s biggest oil and gas producer).
The big spin was how much more money the reworked PRRT would bring in compared to previous years — $2.35 billion (rounded up in all the media reports to $2.4 billion) to a maximum of $2.850 billion in 2025-26 and then falling to $2.5 billion in 2026-27. Back in 2008-09 the PRRT rules were changed and the tax was forecast to take in $2.1 billion that year. But the latest toughening only gets an extra $250 million (in unadjusted dollars) 15 years later and that maximum of $2.86 billion in 25-26 is actually a little less when the $2.1 billion is adjusted for inflation and becomes $2.86 billion.
There is a simpler way of looking at what in effect is just a minor accounting fudge. Back in 2008-09 the value of Australia’s LNG exports was $10 billion. This year the latest resources and energy quarterly from the federal Department of Industry, released in late March, estimates the value will reach $91 billion by June 30 this year. That’s nine times the figure 15 years ago — and the claimed tax take hasn’t changed — or at best will be a whole $250 million more.
$2.35 billion is a much smaller proportion of $91 billion (2.5%) than $2.1 billion was of $10.086 billion back in 2008-09 (21%). In 2009-10 exports totalled 18.7 million tonnes. The latest resource quarterly says they totalled 83 million tonnes in 2021-22 and will end up around 88 million tonnes by June 30.
What this means is that the revenue from the reworked tax is lower in real terms than back in 2008-09 and a much smaller share of that vast increase in LNG production and export volumes than 15 years ago.
More a PR fiddle than a fudge when you think about it.
This just makes it even more obvious that Labor is captured by the fossil fuel industry. Unfortunately we have been sold out by both major political parties. A travesty .
vote Green and independant
Might make you feel good, but a pretty pointless exercise really.
Not so. If all the people who would vote green but for this ‘pointless’ furphy that the main parties love people to swallow did actually vote as their brain recommends we would have a different and better government and society. It’s true.
Precisely. It is rapidly becoming apparent that the major parties cannot or will not govern for their citizens instead of their doners. Greens, Teals and other independents are gradulaly taking over.
Ha ha I lean more towards the beer party at the moment
Agree. Didn’t matter which party is the government. The resource companies are very powerful in Australia and certainly pull the strings
Godammit!
Surely this is the whole point of Australia’s wealth of resources, to make private interests in other countries as rich as Croesus. If a lucky few Australians get a little thankyou note or two – or perhaps some other gratuity – for helping point the torrent of money in the right direction, that is only fair.
Up-voted under the assumption that you were being sarcastic.
Only a cynic would suggest that the Labor has been duchessed by the gas lobby (just like the Libs). Of more interest is the ‘rise’ in PRRT revenue of $2.4Bn is dwarfed by the rise in tobacco revenue ($3.3Bn) in the Budget. That same cynic might suggest there’s some link between Australia’s draconian (new) anti-vaping laws (which will likely drive many back to smoking) and a shameless grab for cash from smokers – instead of the petroleum industry. I know from whom I think the money should be extracted.
Methane is horrible stuff that is scientifically shown to wreck the climate, the environment, our ecology, biodiversity, and plenty of other stuff we are not even aware of yet (!). I doubt we should be argueing over who profits from it the most. We should be demanding that it remains underground where it belongs. It is no better than coal as it leaks out in production and is more destructive than CO2. There’s a satellite going up soon which will zero in on methane leaks and tell the tale.
arguing