Queensland Premier Anna Bligh has called for a review of the RSPT, involving special consideration for LNG projects. However, Federal Treasurer Wayne Swan has said that he will not contemplate different tax rates for different commodities, ruling out special consideration for Australia’s burgeoning LNG industry.
Australian Petroleum Production & Exploration Association (APPEA) Chief Executive Belinda Robinson said that the budget reliance on the growth of the LNG sector underscored the importance of the government genuinely consulting with the industry on the RSPT, to “tease out and fairly address all relevant issues including the definition of a ‘super profit’”.
“Australia’s oil and gas industry has considerable experience with a profits-based tax – the Petroleum Resource Rent Tax – but the super tax on resources as currently proposed more closely resembles a hefty increase in company tax than it does an efficient profits-based tax,” said Ms Robinson.
Queensland Minister for Mines and Energy Stephen Robertson has pushed the Federal Government to increase the threshold that defines a ‘super profit’ as part of the assessment of the Federal Government’s Resource Super Profits Tax.
Mr Robertson told the APPEA conference, currently taking place in Brisbane, that he was working with Queensland Premier Anna Bligh and Treasurer Andrew Fraser to have the profit threshold raised to at least 11 per cent from the Federal Government’s proposed 6 per cent.
Mr Robertson said the Queensland Government is aiming to do this before companies have to start paying the tax.
Mr Robertson said he was concerned about the impact on Queensland’s LNG industry where a number of proponents are due to make final investment decisions about proposed projects in the near future.
APPEA Chairman Eric Streitberg said that the true tax paid by the sector had been misrepresented by the Federal Government in its case for the need for the introduction of the RSPT.
Mr Streitberg said “Personally, as a representative from a small independent company I am very concerned to make sure the government understands that all sectors of our industry are important, not only the mega LNG projects, but the fledgling CSG to LNG projects in Queensland and the smaller independent companies.
“The increase in tax will in no way be compensated for by the proposed resource exploration rebate. This will not achieve the same thing that a flow-through share scheme would have done and has the potential to lead to some very poor exploration outcomes.
“APPEA is fully committed to working with the Government on getting the design right. We are not opposed to change – it just has to be done correctly,” Mr Streitberg said.
Federal Minister for Resources and Energy Martin Ferguson said at the APPEA conference that the Federal Government “is committed to a genuine consultation process about the RSPT”.
Mr Ferguson said “Around every reform there is room for negotiation about the finer detail.
“That is why I encourage all of you to engage with the Resources Tax Consultation Panel,” Mr Ferguson said.
