A 25 per cent tax on Australia’s gas exports could fund free public transport in the country “forever”, former Greens leader Adam Bandt has claimed.
A Senate inquiry is probing Australia’s gas tax arrangements amid calls for a new 25 per cent tax on exports or an increase to the petroleum resource rent tax (PRRT) on windfall profits – proposals gas companies warn could put Australia’s energy security at risk.
The Australia Institute estimates a new 25 per cent tax would generate a whopping $17bn per year.
Mr Bandt, who is now the Australian Conservation Foundation’s chief executive, said the tax could be used to fund “free public transport forever”.
“They would be erecting statues in every town square for the first prime minister that makes the gas corporations pay their fair share of tax and uses it to fund free public transport, grow the industries of the future or pay for the clean fields after cyclones and floods,” he said.
Mr Bandt, who is also fronting the inquiry, said there was widespread support for a reappraisal of Australia’s gas tax arrangements.
Earlier, Australia Institute Executive director Richard Denniss told the inquiry on Tuesday the proposal was about fairness and a “once in a lifetime opportunity”.
He said Australia Institute research showed the Japanese government collected about $8bn per year from imported coal and gas – of which Australia is one of the largest suppliers.
“The Australia Institute released research today showing that the Japanese government gets more revenue from Australian gas imports than the Australian government gets from Australia’s gas exports,” he said.
“Now, perhaps the parliament thinks that’s fair. Perhaps the parliament thinks that’s as it was designed to be.
“Or, perhaps this is a unique opportunity for parliament to come together on an issue that seems to unite parliamentarians in a way that few issues do to fix this issue.”
Mr Denniss said the proposal was “not about harming Japan” and the price paid for gas by the Asian power would not increase.
“The Japanese could always cut their import tax if they’re really concerned about the price of gas,” he said.
“A gas export tax will not increase the price of gas paid by Japan. It will not increase the price of gas paid by Korea or any of our other customers.
“There’s no Norway premium for Norwegian gas, which is heavily taxed. All of the gas is selling at the same world price.
“The reason the gas industry is sad is they know the customers won’t pay the higher price.”
Mr Denniss said a tax would increase the supply of gas to Australians “by taxing the gas exporter to increase the supply of gas”.
“And, we will push the price of that gas down,” he said.
Outside of the inquiry, Mr Denniss said the gas industry had a “very small employment” of about 18,000 people.
“There’s 100,000 who work at McDonald’s,” he said.
“Nurses pay more income tax than the gas industry pays in the company tax.”
Tax would ‘close’ gas industry
Opposition Leader Angus Taylor claimed the proposed 25 per cent tax would “close down the gas industry”.
“That is the intent of that tax,” he claimed.
“Right now, we need more oil and gas. That way we get affordable energy in this country.”
Mr Taylor said the May budget needed to “restore Australian standard of living, protect their way of life, and bank the windfall that is coming from the inflation that every Australian is paying for”.
Speaking to NewsWire, Nationals Senator Susan McDonald, who sits on the inquiry, said the probe’s first day was “not based in fact or data”.
She said The Australia Institute was unable to explain how they reached the potential revenue of $17bn, and questioned whether Australia’s tax take would fall rather than continue to grow as projected in the tax was introduced.
“I think this is a dangerous proposal and it’s just once again demonstrating Labor has only one element in their bag: This is a carbon tax on gas,” she said.
Senator McDonald acknowledged Australians “are desperate to see any green shoots of how they can have a better quality of life”.
However, former schoolteacher and Punters Politics mastermind Konrad Benjamin told the inquiry that Australians were “getting ripped off” and that had “struck a chord with punters”.
“We, millions of regular Aussies, are now paying attention, and we understand a few things that we might not have understood before,” Mr Benjamin said.
“We understand that Australia’s gas is incredibly valuable. We understand that we’re giving most of it away for free to foreign corporations.
“We understand that those same foreign corporations pay close to bugger-all tax.”
Mr Benjamin said the question for “punters” was: “How is it that we are holding all of the cards yet still losing?”
“We’re told every day we can’t afford to invest in schools … we have to cut costs here, cut funding,” he said.
“We’re about to hear that the global economy is going through a shock, and we have to talk about belts because something that happened overseas is making everything more expensive for us.”
Labor renegade backs tax
Labor MP Ed Husic, who has been an outspoken member of the caucus, told Sky News that claims a new tax would jeopardise future investment were “self-serving”.
He denied the tax posed a sovereign risk.
“Mine is not an argument against foreign investment and I respect the role that it plays,” he said.
“But, it can’t be foreign investment that is completely on its own terms. It has to recognise that. This is the nation’s resource.”
Mr Husic has backed the tax, saying Australians “think that there have been obscenely sweet deals for multinational, gas companies”.
He said it would be a “missed opportunity” but not a lost opportunity if it was not included in the May budget.
Asked about debate over the mining tax, Mr Husic said “times had changed”.
“I reckon it’s time for that boogie man to be put to rest,” he said.
“I think the biggest thing is the Australian public, regardless of where you sit on the political spectrum, reckon we should be getting a better deal.
“If you can unite the left and right on this issue, then that’s an important thing.”
Opponents of the measure warn a new tax could put at risk Australia’s relationship with Asian countries reliant on Australian gas but which Australia’s is also reliant upon.
Centre for Policy Development economic director Toby Phillips said buyers of Australian gas would, however, be paying global prices regardless of whatever tax regime Australia had in place.
“To the extent that we hear talk about this harming trade relationships, competitiveness, we’ve got to be clear that that’s largely coming from entities that are investors in our export terminals, not customers of our export terminals,” he said.
Centre for Policy Development energy transition lead Miles Prosser said there was “good reason” to believe Australia would remain competitive.
“Energy will be the basis of an Australia’s competitive advantage for a long time to come, whether that’s fossil fuel or renewable and clean energy,” he said.
“The transition that we’re talking about here is how Australia can take advantage of that energy endowment that we have and use it to develop industries that employ people that pay taxes.”
The inquiry was told about 300,000 jobs over 30 years would be exposed to the global decline in the use of fossil fuels, many in Sydney and Brisbane.
