A report by an independent senator and crossbench MPs have accused Australian gas exporters of not paying their fair share of taxes, leading to a loss of AU$13.3 billion in royalty revenue for state or federal governments.
Six of Australia’s ten LNG export plants, according to research by the Australia Institute, do not pay royalties to state or federal governments, ABC reports. Among the six, four were based in Western Australia, and two in the Northern Territory.
Senator David Pocock, an ACT member, called the looting of Australia’s resources by the gas sector “state-sanctioned daylight robbery,” with the report saying the extra funds could have been used to improve public servives such as education and healthcare.
“We are seeing a betrayal of Australians and our future by the major parties. We are seeing state capture by the gas industry,” AAP reported Pocock, as saying. “They are absolute leeches on this country and this has to end.”
Royalties refer to the natural resources’ purchase price, which are paid by the miners to compensate for its depletion.
Offshore fields in Commonwealth waters are the responsibility of the federal government, and not the state royalty regimes.
However, the government did not have the power to impose royalties on these gas fields.
“Most of the offshore gas in Australia pays absolutely no royalties at all,” Australia Institute’s executive director Richard Denniss told The Business, ABC reported.
“The Commonwealth chooses to collect royalties on gas from the North-West Shelf, but the Commonwealth chooses not to collect any royalties on other offshore projects.”
Australia has benefited greatly from gas exports, which have brought in a total of $265 billion over the last four years despite the absence of royalties. Royalty-free gas was valued at about $149 billion.
“In the last four years alone, Australians have given away the gas that made $149 billion worth of LNG, for free,” the Australia Institute report said.
Reacting to the allegations, the industry noted that it does pay its taxes. According to Samantha McCulloch, CEO of Australian Energy Producers, the sector paid $17.1 billion in taxes, royalties, and other fees to the government this fiscal year, amounting to a significant financial contribution. She added that the Australia Institute study was inaccurate, made using out-of-date data.
“To claim that Australia’s gas resources are given away ‘for free’ is a deliberate misrepresentation of a critical sector to Australia’s economy,” McCulloch told AAP.
