The Liberal government of Western Australia has questioned whether the nascent boom in liquefied natural gas is delivering "sufficient return" to the public.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
As pressure builds at federal level for a parliamentary inquiry into the tax contribution of the multi-billion-dollar gas projects operating in Commonwealth waters, WA has added to growing concern over where the gas wealth being produced ends up.
WA Treasurer Mike Nahan is annoyed that billions of dollars spent by his state on infrastructure supporting LNG projects will not flow back to the state through the federally-imposed petroleum resource rent tax.
"WA would support further scrutiny into whether taxpayers are receiving a sufficient return on government support for offshore LNG projects," said Mr Nahan, who also holds the energy portfolio in the Barnett Government.
Fairfax Media revealed this week that by 2021, when Australia will eclipse Qatar as the world's biggest LNG exporter, less than $1 billion in PRRT revenue will flow into federal coffers.
Qatar, which imposes a flat royalty or takes a financial stake in its LNG projects, will receive $26.6 billion for the same volume of gas.
Just five per cent of oil and gas projects operating in Australia, paid any PRRT in 2014-15, according to the most up-to-date Australian Tax Office figures.
The 30 year-old North West Shelf venture operated by Woodside is the only LNG project that pays PRRT while Chevron's giant Gorgon plant and others are not expected to pay anything for "decades", according to some experts.
Treasurer Scott Morrison said he is taking advice on what he called a "sensitive tax matter" and Labor is currently discussing whether to put its weight behind a parliamentary inquiry already backed by the Greens.
A coalition of organisations, including the ACTU and Greenpeace, is calling for the inquiry to explore whether the PRRT needs to be tightened to ensure Australia reaps the benefits of the boom.
Concern is acute in LNG states like WA, which cannot levy a separate royalty on offshore gas.
The $3 billion WA expects to receive in iron ore royalties this year is twice the total the Commonwealth will take in PRRT from oil and gas projects nationwide.
"The state government incurs a wide range of costs as a result of these projects relating to town site development, schools, hospitals, community facilities and roads that are either directly associated with the project or arise from the economic and population growth accompanying the project but does not receive any PRRT revenue when they are in Commonwealth waters," he said.
WA estimates it spent $8 billion in infrastructure associated with the North West Shelf and receives an annual grant equivalent to two-thirds of the PRRT paid by the project, which is then reduced further by the GST distribution system.
The state expects a $482 million grant associated with the North West Shelf in 2016-17 but Mr Nahan said it would be more than wiped out by a $1.2 billion "grant loss" from GST.
