During a Radio National appearance, the Labor MP said the gas contract prices now being offered to manufacturers are continuing to rise following a “heads of agreement deal” with Resources Minister Madeleine King – which was designed to guarantee supply and ensure there was no shortfall in the local market.
Power prices are soaring, with electricity bills forecast to rise 30 per cent next year and gas prices 20 per cent.
Yesterday, shadow treasurer Angus Taylor said that the primary goal of government has to be “to get the price down [and] the key to that, it’s economics 101, [is] get more supply in, that’s how markets work”.
But Husic said new gas production would take years to bring online and “the biggest focus long term is the price mechanism” to force gas exporters to sell cheaper gas into the local market.
The Labor MP added that the onus is on gas companies to offer cheaper prices to avoid harsh regulations.
“They are not taking this issue seriously. They’re not picking up the signals, [they’re] completely tone-deaf,” he said.
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Chalmers speach yesterday
We have crossed a threshold’: Oil and gas taxes in Chalmers’ sights
Chalmers, speaking to the Melbourne Institute on Wednesday, said the surge in energy prices meant the government was contemplating options that would have been unpalatable just a few years ago.
“As someone who is a relatively reluctant intervener in markets, for me, and for my colleagues, I think we have crossed a threshold where everybody in our cabinet - and I think most people in the Australian community - accept ... when the price is expected to become so extraordinarily high that they risk strangling industries, then we need to do something about it,” he said.
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“If there’s something sensible, responsible, but also meaningful that we can do to take some of the sting out of these high prices, then obviously we’ll consider doing that.”
Data to be released on Thursday by the Australian Tax Office, covering tax paid by the nation’s largest businesses, shows commodity prices feeding huge amounts of tax into the federal budget but little from the taxation of petroleum and gas.
In 2020-21, large public mining companies paid a combined $32.3 billion in tax, a 29 per cent jump on the $25 billion paid in 2019-20. The increase was largely driven by a spike in iron ore prices.
The nation’s largest banks paid $15.2 billion in tax, up $1.1 billion, while large businesses across the entire wholesale, retail and services sector paid $15.3 billion.
The same data showed just 10 large businesses paid a combined $926 million in petroleum resource rent tax (PRRT). It was up on the $881.1 million paid by 12 corporate entities in 2019-20.
A Treasury working party, formed under then-treasurer Josh Frydenberg in late 2018 but put on hold during the COVID pandemic, has been revived to consider transfer pricing of gas under the PRRT system. It is explicitly looking at how extreme profits are taxed during periods of high prices.
Chalmers said while PRRT was expected to lift a little this year and next due to the surge in oil and gas prices, more could be raised.
“I think there is an appetite in the Australian community to see if that tax can operate more effectively,” he said.
Shadow treasurer Angus Taylor said the government should focus on policies that pumped more gas into the country’s power network.
“Our focus is to get the price down, not to tax more. The primary goal here right now has to be to get the price down (and) the key to that, it’s economics 101, (is) get more supply in, that’s how markets work,” he said.
But the PRRT is already “fit for purpose”, argues Australian Petroleum Production and Exploration Association Chief Executive Samantha McCulloch, who noted the tax had been reviewed four times since 2017.
“The PRRT is already a profits tax delivering a growing return for Australian taxpayers – totaling around $40 billion since its introduction and another $11 billion across the forward estimates in last week’s budget.”
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Woodside, which accounted for just under 10 per cent of Australia’s LNG production for export last year, released a statement after Chalmers’ speech saying they needed “stable tax and fiscal settings in order to make the large, long-term investments that support energy security, decarbonisation and economic growth”, and that the current PRRT regime “operates as intended”.
“We paid more than A$700 million in Australian taxes, royalties and excise in the first half of 2022 and about A$12 billion since 2011,” a spokesman for the company said
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