The head of fuel and oil big Woodside has warned the federal government to withstand reaching for a bandaid resolution to its finances woes by lifting or altering the petroleum useful resource lease tax.
Chief govt Meg O’Neill recognised the temptation to change the tax settings for fossil gasoline firms given the finances place however warned such efforts might jeopardise new provide.
“The risk that we run, though, is to try to do something in the near term that’s a bit of a Band-Aid, but it’s going to cause long-term harm,” she instructed the National Press Club on Wednesday.
“It’s going to cause investment again to be under additional pressure, and opportunities we may pursue to bring new projects to bear may be under pressure,” she added.
But the federal treasurer can also be underneath strain to trim spending and lift further income to assist fund rising spending priorities, reminiscent of defence and aged care, with out including to authorities debt.
Recent modelling by suppose tank the Grattan Institute discovered altering the tactic for pricing fuel within the tax preparations, one of many generally cited points with the scheme, would ship as a lot as $4 billion yearly to authorities coffers.
Treasurer Jim Chalmers has stored reforms to the petroleum useful resource lease tax on the desk, telling reporters on Monday he’s involved the system is lower than scratch.
Mr Chalmers within the technique of reviewing recommendation from Treasury on the tax on the earnings of fossil gasoline extractors, and is working by means of choices to enhance how the tax applies to fuel producers.
The overview was first commissioned by the previous coalition authorities and after stalling throughout the pandemic, was restarted by Labor final yr.
Ms O’Neill mentioned the PRRT was a kind of “super profits tax” utilized to the offshore oil and fuel trade that kicks in after firms have recouped their funding from the price of exploration, growth and manufacturing.
She mentioned when Woodside is bringing in income, it pays the 30 per cent company tax fee in addition to the extra 40 per cent levy, leaving its efficient tax fee at 58 per cent.
“Woodside is the biggest payer of PRRT in Australia since coming into the Bass Strait joint venture last year, and we’re proud of the contribution that we make and we’re proud of the fact that when prices are high we make us a more significant contribution to Australia’s coffers,” she instructed reporters on Wednesday.
Ms O’Neill additionally mentioned commodity costs fluctuate from yr to yr, with the excessive costs seen final yr following three years of document low costs throughout the pandemic.
“We need to make sure that our investment decisions are resilient throughout the cycle.”
She mentioned the corporate was working carefully with the federal government to articulate the “long-term impact of any sort of short-term change” to tax settings, together with the potential of much less authorities income sooner or later.
Source: www.perthnow.com.au
