Government’s oil and gas tax response will leave regional communities at a loss
By Diane Kraal
Falling revenues from petroleum mining, that spurred a review of the Petroleum Resource Rent Tax (PRRT), have hit regional communities hard and these same communities aren’t likely to get any relief from the government response.
Local communities that support the resource sector have called for funding now to build new infrastructure. But there is no good news for local communities in the review report because its recommendations will only apply to future projects subject to the PRRT. It won’t herald any changes in the up and coming federal budget.
The government’s recommendations from the review for existing projects can best be described as administrative. The report was silent on the introduction of Commonwealth royalties for those gas projects that are currently only subject to the PRRT.
My research on the industry and community submissions to the review shows the petroleum industry has closed ranks and called for no change to resource taxation. By contrast an alliance of regional shire councils want PRRT revenue placed in a future fund.
In addition to this, a group of trade unions, social justice groups and individuals have pressed for a reintroduction of Commonwealth royalties for offshore gas projects, currently only subject to the PRRT.
Petroleum industry lobbying has tempered the impact of submissions from the regional councils and the rest. It’s held the same sway as it did in 2010, where the formidable force of industry lobbying was effective against the introduction of the Rudd/Gillard government’s minerals resource rent tax.
What regional councils are calling for
A group of 27 regional councils from all over Australia lodged submissions. These councils were unified in asking for PRRT revenue to be placed in a future fund for regional use.