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Amidst ongoing discussions about Australia’s resource taxation, a new proposal to impose a levy on exports has sparked a debate, with industry groups and political opponents cautioning that such a move could jeopardize the sector’s future.
Today, a Senate committee convened to review proposed changes to the taxation of Australia’s gas exports, with a particular focus on liquefied natural gas (LNG) sent overseas.
The Australia Institute has put forward a proposal for a 25% flat export tax, estimating that it could generate $17 billion in revenue while also reducing domestic gas prices.
“An export tax offers a comprehensive solution to these issues,” stated Richard Denniss, director of the Australia Institute, during the inquiry.
“While a windfall tax promises theoretical benefits, our current system addresses very few of the existing challenges,” he added.
The change would bring Australia closer to other major exporters like Norway and Qatar, which make vastly more money from their gas exports.
Labor backbencher Ed Husic said a gas tax would be simple and provide more “direct benefit” but Opposition Leader Angus Taylor was far from supportive.
“Do you want to shut down the gas industry in this country and do you want to have no fuel security in this country?” he said.
Superpower Institute chief executive Baethan Mullen said some gas projects that would have gone ahead without the tax would no longer happen if it were imposed.
The gas industry argues it already paid $21.9 billion in tax last year alone.
Gas companies appearing tomorrow are likely to make the point that projects that don’t go ahead don’t generate tax revenue.
Dennis was dismissive of that line of argument.
“[Japanese oil and gas company] INPEX are currently seeking a new project in Norway. Right now,” Dennis told the senate.
“They are taking the piss. They are mocking us. They are playing us for fools.”
Konrad Benjamin, the face of popular social media channel Punter’s Politics, said millions of regular Australians were now paying attention to how little Australia was making from gas royalties compared to Norway and Qatar.
“If it’s profitable, they’ll still come,” he told the Senate.
“Just like in Norway. They said they’d leave, guess what, they didn’t.”
Former Treasury secretary Ken Henry has also been a vocal supporter of taxing gas exports more.
“Just do it. Just do it in the national interest and stop the crap that the Australian public has put up with for decades,” he said.
The push for more tax on gas coincides with the need for more money on the budget’s bottom line.
“Our policies about gas taxes haven’t changed,” Environment Minister Murray Watt said.
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