The Petroleum Rent Resource Tax (PRRT) is being used as bargaining chip should One Nation backtrack on its support for company tax cuts, according to the Australian Financial Review (AFR).
Industry sources have told the AFR that changes to the PRRT didn’t appear in the 2018-19 Budget in order to be used as a tool to negotiate with Pauline Hanson’s One Nation, who have been highly critical of the current PRRT structure.
The Federal Government has been trying to pass its company tax cuts through the senate, and is reliant on the One Nation block’s support.
A government source has told the AFR that the reason the changes to the PRRT didn’t appear in the budget were the fears that it would hand One Nation too much power when the debate over company tax returns to the senate floor next month.
Any changes to the PRRT are unlikely to affect existing projects, however, new and proposed projects such as Woodside’s Browse and Scarborough developments and ConocoPhillips’ Barossa project could be subject to the changed tax.
The budget papers revealed revenue from the PRRT will grow by 18.5 per cent in FY18 to $1.1 billion, jumping a further 22.7 per cent in FY19 to $1.35 billion, after which it is expected to plateau until 2021-22, adding $1 billion over four years.