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How $11 billion in promised taxes from the gas sector has gone missing

Business

More than $11 billion in promised corporate taxes has gone missing after 10 years of the coal seam gas to LNG industry, according to the Australia Institute.

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Ahead of the opening of the gas industry conference today in Brisbane by Prime Minister Scott Morrison, the left-leaning think tank said an analysis of ATO records showed that five of the most prominent gas companies in Australia had paid no tax for at least the past seven years while they had a combined income of $138 billion.

It said that at the start of the CSG industry in Queensland in 2012, the gas industry said the LNG companies would pay $11.2 billion in federal income tax by 2020.

“They have paid almost none,” the institute’s principal advisor Mark Ogge said.

The institute said that Arrow Energy (Shell-PetroChina) and APLNG, (Origin, Sinopec and ConocoPhillips) had not paid any tax since 2014. Santos had paid $3 million in 2018, but that may not have been attributed to its GLNG (Santos, Petronas, Total and Kogas) project.

The ability for companies to do this is based on their ability to offset profits with accumulated losses and costs.

While they may have paid little or no income tax, the report does not include royalties paid or other taxes.

APPEA acting chief executive Damian Dwyer said the Australia Institute reported mispresented the contribution of the industry, excluded direct payments like royalties and rents, and did not  reflect the way the tax system works.

“The companies that this anti-gas group is referring to deliver more than $5bn in direct payments to governments every year – that’s more than $150bn since the late 1980s,” he said.

“Looking at rents and taxes as a measure of economic contribution is far too a narrow lens – it totally ignores our overall contribution through employment, supporting other industries and facilitating regional growth – which was measured by AGIT at almost $500 billion a year.”

However, Ogge said the sector earned $138 billion over the decade without paying tax on it.

“Our governments should not be letting this happen and we need an overhaul of how the oil and gas industry is taxed in Australia,” Ogge said.

“The gas companies promised us billions in revenue and instead we end up with little in our pockets and a whole lot more climate impacts.

“We trust our politicians to tax our natural resources to the benefit of all Australians, but instead some of the largest gas miners, members of APPEA, are paying absolutely nothing.

“The federal government is virtually giving the resource away for free, gift wrapped in subsidies, mostly to foreign-owned companies, many of whom pay little if any tax.

“Imagine if you trusted an agent to sell your house to get the best deal possible, but instead they gave it to their mate for next to nothing. This is what is happening with our gas resources.

“Far greater scrutiny should be given to the close ties between some of our political representatives and the oil and gas companies who benefit from their largesse with our money.”

 

 

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