One Nation leader Pauline Hanson has entered the great energy and resource debate, calling for immediate government intervention in the offshore drilling gas industry.
She warned that Australia will end up like Greece if it retains the current petroleum profits tax model.
The outspoken senator said that Australia should adopt a shared production model, and if the multinational gas producers did not like it they should “pack up their bat and ball and go”.
She said the Federal Government’s decision not to change the current profits based tax model was tantamount to billions of dollars leaving the country through avoidance. “We’ll end up like Greece,” she said.
She made her intervention in a live Facebook broadcast with former Australian Tax Office official Jennifer Game to demand a part-nationalisation of the gas fields.
What is shared production?
Shared production, which exists in other oil and gas producing nations such as Qatar, Malaysia and Nigeria, enable resource companies to use revenue from production to repay exploration and development costs. Then, either future profits or extracted fuel is split between the government and the company.
Ms Hanson’s sudden decision to enter the fray could signal that One Nation will use the energy sector as a bargaining chip in the Senate after the Federal Government announces the 2017 budget next week.
There will be a lot of hard negotiating behind the scenes in the months following the budget as the government pushes to have it approved in the Senate.
No to fracking – yes to offshore drilling
Ms Hanson did, however, agree with Prime Minister Malcolm Turnbull insomuch that it is absurd that Australia is the world’s leading gas exporter but does not have gas enough for its domestic needs. She also decried the fact that what little gas was available is prohibitively expensive.
On the flipside, she is all out against Mr Turnbull’s view that the long-term solution to Australia’s gas crisis was increased onshore production, including more Coal Seam Gas.
“Fracking destroys our farmland and creates “health issues for people,” she said.
“We should have equity in these offshore gas fields,” she said.
Petroleum Resources Rent Tax ‘easy to avoid’
Ms Game said such dramatic intervention into the offshore gas industry would mean the companies “are going to cry sovereign risk” and threaten to leave but that should not be a deterrence.
Only two of the six offshore gas operations in Australia paid royalties and the Petroleum Resources Rent Tax was easy to avoid because of deductions for exploration and other costs.
“Smart countries don’t use a profits based tax because it encourages tax avoidance. They use shared production.”
Last week, the government decided against changing PRRT laws, despite pressure to do so.
Senator Hanson said “I’m sick of this, billions of dollars leaving this country. We’ll end up like Greece.”
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