The Australian Government and Senate are running separate investigations into the failure of the PRRT as well as the royalty regime for the North West Shelf project, following a campaign by the Tax Justice Network.
The TJN has made a submission to the Government Inquiry calling for an end to the 'free ride' for the offshore gas industry outlining a range of necessary reforms to the PRRT. In addition, we are calling for the immediate introduction of a new 10% Commonwealth royalty on all current and future offshore oil and gas projects that are currently only subject to the PRRT.
A robust tax base is essential to fund education, health care and other government services and restore the Budget over time.
Liquefied Natural Gas will soon compete with iron ore to be Australia's largest export. However, various analyses show that the primary resource tax on this export, the Petroleum Resource Rent Tax, or PRRT, will not collect any new revenue for decades to come. [Learn more]
On Wednesday 30 November, Treasurer Scott Morrison announced a public government inquiry to be headed by distinguished economist Michael Callaghan AM, to report by April 30 with recommendations for fixing the loopholes in the PRRT. The Treasurer said he plans to implement the reforms in time for the May Budget.
This followed moves by the Labor Party and Greens to establish a Senate Inquiry; which will still go ahead.
The Tax Justice Network Australia has been calling for an inquiry for the past year, and recently stepped up its campaign with additional reports, lobbying, and a large community petition that collected over 17,000 signatures. The Network has been credited by the media and the Treasurer himself as the key drivers of the recognition of the need for reform.
"It was a dogged group of Tax Justice Network advocates - the same people who launched the corporate tax avoidance research that eventually resulted in the Coalition's diverted profit tax - who saw the scandal in the PRRT."
- Sydney Morning Herald
The International Transport Workers Federation (ITF), a TJN member organisation, has published three research reports highlighting problems with the PRRT:
Australian LNG Exports to Boom, Tax Revenue is a Bust (October 2015)
Comparison of Australia and Qatar LNG Exports and Revenues (September 2016)
- An International Comparison of Australian Government Revenues from Oil and Gas Production (November 2016)
The Tax Justice Network Australia wrote to Parliamentary leaders in September 2016 calling for an open and robust inquiry, to clarify these issues and inform policy development to close off any gaps in the future PRRT tax base.
This campaign by the Network has generated a huge amount of media interest. You can see an extensive collection of media stories here.