Australia missing big gas capture
Authorities say Australia’s revenue from oil and gas production has fallen “far behind” in capturing the benefits of the LNG export boom.
The International Transport Workers' Federation (ITF) has reviewed industry data which shows the Government collected just $US7.3 billion in revenues related to oil and gas production in 2014.
This figure is well below those achieved by Australia’s peers when compared as a percentage of total production.
The global workers’ union says Malaysia received $US20.2 billion that year, nearly three times as much as Australia, despite its production levels being less than 30 per cent higher than Australia’s.
The ITF criticised the effectiveness of Australia’s petroleum resources rent tax (PRRT).
“The PRRT is not a royalty payment but a profit-based tax. While the rate is set at 40 per cent, it is not forecast to collect any revenues on LNG production for decades,” the ITF said in a briefing paper.
“Effectively this means that Australia's offshore oil and gas is being given away for free.”
The ITF said there were much stronger royalty rates in places like Alberta in Canada, which commands a rate of between 5 to 40 per cent.
In the US, the Federal Government rate for offshore production is 18.75 per cent.
The ITF points out that Commonwealth waters do not command any royalty on offshore gas production, despite similar onshore production having a royalty of 10 to 12.5 per cent (set by the states).
“As Australia is on the verge of a major expansion of LNG exports and revenues are forecast to fall, Australia may succeed in becoming the country that gets the lowest share of government revenue from its oil and gas production,” the global union warned.