‘Gas-fired robbery’: WA LNG projects cheating Australians out of tax royalties, Australia Institute report finds
Two thirds of WA’s offshore gas projects pay close to no royalties or Petroleum Resources Rent Tax, creating a “gas-fired robbery” in an offshore heist that is cheating Australians out of a much-needed tax windfall.
“What if you gave your house to a real estate agent and trusted them to sell it and they gave it away to a mate for free — it’s that outrageous,” Australia Institute principal fellow Mark Ogge said on Monday.
For several decades WA’s Northwest Shelf has had a royalties regime locked in. In 2020/21 the State Government collected $425 million in gas royalties, however there is still approximately two-thirds of offshore gas projects pay close to no royalties to the WA Government and no Petroleum Resource Rent Tax to the Federal Government.
It is important to note that offshore gas falls under the responsibility of the Commonwealth, meaning the income Australians could receive would come via the PRRT.
“Companies are basically banking their losses so that they never pay PRRT. Prelude, Gorgon, Wheatstone and Pluto don’t pay royalties or any PRRT so that gas is literally being given away for free and that gas belongs to the people of Australia,” Mr Ogge said.
Those projects make up close to two-thirds of gas production in WA.
The released report discovered that if the North West Shelf royalty agreements had been extended to all the LNG operations, than approximately $1.6 billion could have been raised in the 2019/20 period. In terms of revenue, this would have brought in an additional $1.06 billion to WA and $500 million to the Commonwealth.
In addition to the tax foregone, taxpayers have been subsidising the industry under successive governments, claims the report.
Both State and Federal Governments have been contacted for comment.