Matters of Urgency — Gas Industry: Taxation

Helen Polley

Senator McKim has submitted a proposal, under standing order 75, today, which has been circulated and is shown on the Dynamic Red:

That, in the opinion of the Senate, the following is a matter of urgency:

The need for the government to finally introduce a minimum 25 per cent tax on gas exports to ensure Australians receive a fair return from our gas resources, as gas corporations including Shell, Santos and Woodside benefit from reported war-driven windfall revenues while Australians continue to face high energy prices and a cost-of-living crisis.

Is consideration of the proposal supported?

More than the number of senators required by the standing orders having risen in their places—

With the concurrence of the Senate, the clerks will set the clock in line with the informal arrangements made by the whips.

Steph Hodgins-May

I move:

That, in the opinion of the Senate, the following is a matter of urgency:

The need for the government to finally introduce a minimum 25 per cent tax on gas exports to ensure Australians receive a fair return from our gas resources, as gas corporations including Shell, Santos and Woodside benefit from reported war-driven windfall revenues while Australians continue to face high energy prices and a cost-of-living crisis.

Today we are here to discuss the need for a gas export tax in this country. Seven in 10 Australians are demanding that this place show the leadership expected of them and tax our multinational gas giants and get a fair share back for Australia from our gas. The government and the corporate parties in here are faced with a political choice today. Will they side up and saddle up with their corporate gas donors, or will they vote with the Australian people who are demanding a fair return on Australia's gas and who are demanding at least a 25 per cent tax on gas exports?

We are at a time when we are seeing massive corporations like Woodside, Santos and Shell reporting record wartime profits. They are making billions of dollars in revenue and profits, yet the government tells us that now is not the time to act. If it is not the time to act now, when these multinational corporations are raking it in and Aussies are doing it tough—they are literally budgeting down to the dollar in a cost-of-living crisis and making impossible decisions about whether to fill the car, whether to buy some fresh groceries or whether to get their medication—then when will it be? This government has been unwilling to stare down around 12 multinational gas exporters and say, 'Hang on, guys; it's time for you to pay your fair share. Instead, they are looking down the barrel of knocking 160,000 people off the NDIS. What an utter shame! Seven in 10 Australians support a gas export tax. Will this Labor government today do what it was elected to do and represent those people instead of its corporate donors?

The Greens led an inquiry into a gas tax or into the taxation of Australia's resources, and we heard that Japan makes more money off Australian gas than Australia does. That is outrageous. We heard that this export tax will be borne by the producers—not by other trading nations and not by the Australian public but by the producers, who are making record wartime profits. We heard that millions of dollars were spent by these same gas exporters trying to kill this gas export tax and that they were going to attend Labor's $5,500-a-head post-budget-night fundraiser. It is outrageous. We are seeing donations funnelled into the corporate parties from the likes of Woodside and Santos. In the last 10 years, Woodside have donated $1.2 million. When I asked them, 'What do you get for this donation or investment?' they replied, 'Oh, we get policy meetings.' I mean, come on! We are in this place to do a job, represent the people and have meetings, and they shouldn't cost. It's outrageous.

Even at Labor's own national conference, their own rank-and-file members believed that Australia should get a fair share from Australia's resources. And what does the Prime Minister respond with? He calls this campaign and this push that was driven by the unions a slogan, nonsense and BS. This is not a slogan; this is a demand from the Australian people to do what you're elected to do. As recently as yesterday, the Prime Minister couldn't even bring himself to put the two words in the same sentence. He couldn't even say 'gas tax' when he was asked by my colleague in the lower house about this—pathetic! It is time for political leadership and time for a gas tax. Let's get it done. We can do it today. (Time expired)

Susan McDonald

I rise to oppose this ridiculous rehash of a motion. We have discussed this previously. We had an entire Senate inquiry into this notion, which was filled with absolute lies, mistruths and misrepresentations. In fact, we've just heard some of them repeated again, even though the evidence does not support the view that Japan makes more tax out of Australia's gas than Australia does. It was clearly demonstrated. We had evidence on this, and yet we have to continue listening to this absolute rubbish.

There are no new ideas coming out of this, because this is not a grassroots campaign to get a fair share on our resources. To be clear, this is not an argument based on fact or economics; this is an activist run campaign, a thinly veiled attempt to shut down fossil fuels and future prosperity in this country. The Greens political party know this. They know what they are doing.

So let's be very, very clear about what's behind this. Despite the calls for transparency and clarity on donations, the reason why you know donations from gas companies is that they comply with the rule of law in Australia. They comply with legislation, unlike the donations that are flowing in, in the hundreds of millions of dollars, to the Environmental Defenders Office—millions of taxpayers' dollars that they took to make fake evidence in court. What about the IEEFA and the Australia Institute? They trumpet the need for openness and transparency, yet they do not disclose where their money comes from. We should care about that. When there are activist organisations seeking to alter the political path of this country, to alter the domestic security of our energy supplies and to distort the future prosperity of Australia, the jobs of thousands of Australians and the $22 billion in state and federal taxes and royalties received from the gas industry, we should know where their money comes from. Fortunately, in the US, they have a transparency register for these people, so we see some of the breadcrumbs of their work. But they have absolutely stated they want to shut down fossil fuels around the world, and Australia has been their working ground.

I understand economics. I desperately want to see future prosperity for this country. It's why I came to parliament. I believe in building Australia and more income for Australia to ensure that we are the First World, prosperous nation that we've enjoyed being in the past. We have received billions of dollars from the resources sector and have fantastically well-paid jobs worth double what most of us enjoy. In fact, currently, we've got electricians working in the gas industry who are on $400,000 a year. That will not last if this campaign is successful.

In 2014, the Secretary General of NATO demonstrated that the anti-fracking, anti-gas campaign in Europe and in the UK was run by Russian money. That campaign sought to undermine the UK's energy sovereignty and financial resilience. It was allegedly to increase Europe's reliance on Russian energy sources. We saw how that worked out. The Russian pipeline got blown up, and Europe and the UK in particular were on their knees. That's the goal here. The goal is to reduce Australia's energy sovereignty and our financial independence. This is not a fantasy. It's not a James Bond thriller. This is happening right now, under our noses, because we do not demand the same transparency and scrutiny that we do of politicians. We can't take money from overseas sources. Anybody who gives to us, we have to disclose. So I ask the Greens political party who sit opposite us: on whose behalf are you acting when you push this campaign? Because it's certainly not in Australia's interest.

Varun Ghosh

Gas is an incredibly important resource for Australia. It's important to our economy. It supports thousands of jobs across the country, contributes billions of dollars to the economy as a whole and brings in vital export revenue. That revenue is used to directly and indirectly increase the standards of living of Australians. As a flexible source of power, it is a vital element in our transition plan to a renewable economy and energy grid. As we phase out coal and bring on new renewable energy sources, we need gas to firm it. Gas is also a really important industrial feedstock for a number of industries in Western Australia, and it's a really important fuel for those hard-to-abate energy needs in other parts of the Western Australian industry, including the resources industry.

I'd also say that our reliability as a gas exporter is vital to maintaining strong trade relations with regional allies and partners. Our stability in providing exports to our trade partners during the most recent energy crisis that was created by conflict in the Middle East ensured that Australia was able to leverage those relationships—as ably demonstrated by the efforts of the Prime Minister and the Foreign minister, among others—to ensure that we didn't run out of fuel at a key time and that our fuel supplies remained stable.

A 25 per cent export tax, taken at face value, may well be a good-faith effort to increase the revenue gained off the gas industry. That wasn't the substance of some of the submissions we heard at the inquiry. Some of them were very clear that the purpose of this tax was to tax the industry out of existence—to make it economically unviable. I think our starting point would be the same in terms of getting a fair share from our resources, and the question is how you do that.

One of the interesting parts of sitting on an inquiry and listening to a really large range of people across a relatively short period of time but in quite a lot of detail is that there are a number of different ways you could do this. There is the current petroleum resource rent tax. There's what would be called a Brown tax. There's a wellhead royalty. You could put in place an export tax. There are a range of different ways to do it, but all of them have consequences for the industry, for energy supply in Australia and for investment in energy long term. You need to get into the detail of all that. What emerged from the inquiry is that a 25 per cent export tax was a figure plucked out of nowhere. There was no empirical basis given by any of the advocates other than the amount of money that it would actually raise. And that's okay. That can be superficially appealing. I get that. There's an elemental speciousness to it. But, in terms of actually designing a policy that delivers a return for Australians while also ensuring our energy security, it needs to go a bit further than that and it needs to be better calibrated.

We've already seen a number of changes to the PRRT under this government that have increased the amount of revenue collected, and our goal is to get a fair share. If the Australian people are saying that they think we're not currently getting that or won't get it in the future then that's obviously something that we need to look at, but we need to do it in a way that is calibrated with the other objectives in this space—namely, having a gas industry that permits a transition to a renewable energy grid, having an industry that provides energy for Australians and doing it in a way that doesn't kill standards of living and doesn't destroy important parts of our industry. That's really the overarching thing.

The other point is—and I know there are different views on this in this chamber—that the government's also just set up a national domestic reservation in the gas industry for 20 per cent. That means that we're trying to guide gas that's produced in Australia into Australian industries to bring energy prices down and to stimulate or turbocharge our industries. That is, I think, part of the problem as well. When you've got that policy being rolled out at the moment in order to deliver domestic reservation, which is in effect a kind of tax on the industry, the idea that you would then put a 25 per cent export tax on top of that is potentially devastating to that industry. It might destroy investment in that industry in Australia. The result in the long term would be an Australia that's poorer, that's less energy secure, that's less able to do an energy transition and which ultimately will collect less tax from this industry.

Rather than pushing for an arbitrary tax that doesn't actually have a foundation other than that people like the dollar figure at the end of it, I think where we landed in the report was that we wanted to investigate the options available and look at ways to ensure we're getting a fair share in a way that doesn't distort or destroy the industry or create perverse incentives within certain markets or industries. That was the recommendation of the government members in the gas tax inquiry—that there were a number of options that were worthy of investigation to try and both ensure the viability of the industry and also increase the revenue that Australians receive from it. That's the course we'd advocate for. (Time expired)

Long debate text truncated.