Push to end tax ‘rort’
Multinational gas producers are paying minimal tax while our hospitals are starved of funds.
Last year Australia’s national nursing union ran a series of TV and radio ads across the country highlighting how $57 billion ripped from health budgets was compromising the care nurses are able to deliver to the community.
The ads by the Australian Nursing and Midwifery Federation also alerted the public to the $1.2 billion in funding slashed from the aged care system.
Australia’s public hospitals remain in “a constant state of emergency” due to funding shortfalls, according to the Australian Medical Association (AMA).
Yet while hospitals go begging the Australian government continues to allow major corporations to avoid paying billions of dollars in tax every year.
The offshore gas industry is a prime example.
Australia may soon overtake Qatar to become the world’s biggest exporter of liquefied natural gas (LNG).
Yet multinational companies pay Australia very little for the gas they extract from Australian waters.
A report by the McKell Institute reveals that under the Petroleum Resources Rent Tax (PRRT), offshore gas producers pay minimal tax on the profits they make.
They pay nothing at all for the gas under the sea because unlike most of the resources industry they are largely exempt from paying royalties.
By extending the royalty system to all projects in Commonwealth waters the government could generate up to $28.4 billion over 10 years, the McKell report finds.
That is more than double the $13.8 billion the federal government is spending on health this year.
Gas production booms but government rents drop
While gas production has boomed in recent years, PRRT receipts have actually decreased and will continue to decline, the report says.
In 2014-15, the federal government received $1.8 billion in PRRT revenue, and this is predicted to fall as low as $0.81 billion by 2020.
At the same time, gas and oil companies in Australia are making significant profits, with the industry turning over $67 billion in 2014-15.
Major petroleum companies “poorly compensate the Australian public for the publicly owned resources they are extracting and selling for profit,” the report says.
With LNG worth hundreds of billions of dollars set to be exported in the coming decades, there is a push in the Senate to reform the system.
“The whole thing has become a complete rort,” said Labor Senator Sam Dastyari.
“Australians are missing out on billions of dollars in royalties when Australia is experiencing a gas boom,” said independent Senator Jacqui Lambie.
Victorian Senator Derryn Hinch said Qatar was expected to raise about $26 billion in revenue from royalties by 2021.
“Compare that to Australia. The forecast is that we’ll raise less than $1 billion under the current system.”