An alliance of Greens and crossbench senators said it would not back Labor’s higher taxing regime on oil and gas unless it doubles the amount raised.
Labor is likely to reject the crossbench proposal released on Tuesday that would seek to raise anPetroleum Resource Rent Tax, forcing it to negotiate with the Coalition if it wants its legislation to pass.
The change would hit five major offshore liquefied natural gas projects – Chevron’s Gorgon and Wheatstone mega projects in WA, Japan-owned Ichthys off Darwin, Woodside’s Pluto, and the Shell-led South Korean joint-venture Prelude, according to Parliamentary Budget Office costings done for the Greens in July.The 40 per cent PRRT is levied on projects once they become cash-flow positive – which takes decades because massive capital costs are fully deductible upfront and indexed each year.
The government has also been forced into a major diplomatic offensive to calm jitters among Australia’s biggest gas buyers, particularly in South Korea and Japan, where alarm is most acute over a series of interventions by Labor into the gas industry, including last year’s price cap and the industrial carbon price reforms known as the safeguard mechanism.
Opposition Leader Peter Dutton in late May signalled the Coalition would work with Labor to pass the PRRT changes so long as the government streamlines approvals of future gas projects.“They can work with the Coalition to weaken environmental protections to fast track gas projects, or they can get this legislation through with the Greens and crossbench if they increase their minuscule tax take. It should be a simple choice.
To pass its PRRT changes, which have not yet been tabled in parliament, Labor needs either the Coalition’s support, or a combination of the Greens and at least two more crossbenchers. Mr Pocock confirmed he would vote no to the government’s legislation unless it backed the Greens’ proposal.that his preferred reform would be to lift the rate at which super profits are taxed under the PRRT to 50 per cent or 60 per cent from the current 40 per cent.
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