Angus Taylor has warned Labor against the “death by a thousand cuts” of the gas industry, signalling the Coalition may reject changes to the petroleum resource rent tax (PRRT).
The shadow treasurer made the comments at the National Press Club on Wednesday, in an alarming sign for industry that the Albanese government may be forced to deal with the Greens to pass the reform.
Labor and the Coalition are also engaged in a budget barney over the opposition’s plan to increase the income-free threshold for jobseeker, which the social services minister, Amanda Rishworth, has warned is “not costed”.
The government has proposed to limit the proportion of taxable income from offshore oil and gas projects that can be offset by deductions to 90% in a move that could collect $2.4bn over four years. The Greens and independents have suggested more extensive PRRT tax changes could raise more than $9bn every year.
The Australian Petroleum Production & Exploration Association has said Labor’s policy would “provide greater certainty” to the industry and called for bipartisan support to “ensure the ongoing efficiency and administration of the PRRT regime”.
On Wednesday Taylor was asked if he was concerned that opposing the PRRT could force Labor to deal with the Greens. He replied that he didn’t “want to get ahead of our processes” because the opposition is still “systematically and methodically” working through the budget.
“But there’s a couple of principles that are important regardless of the outcome,” he said. “Number one, if you want more of something, you don’t tax it more. It’s pretty simple. It’s pretty basic economics.
“But that’s what Labor has chosen to do here, and it’s disappointing that that’s their approach more generally.”
Taylor said that “taxing more” struck him as the wrong way to deliver affordable energy. “We want a gas industry that’s successful in this country, not one that’s dying by a death by a thousand cuts.”
In Thursday’s budget reply the opposition leader, Peter Dutton, offered bipartisan support for a range of cost-of-living and welfare measures including improvements to bulk-billing, single parent payments, and jobseeker for those aged 55 to 60.
The Coalition has so far withheld support for the $40 a fortnight base rate increase to jobseeker, proposing instead that the amount jobseekers can earn before their payments are reduced increase from $150 to $300 a fortnight.
Initially the Coalition suggested this could cost as little as $700m, but on Tuesday Dutton revealed a discrepancy with the Parliamentary Budget Office suggesting it could cost “in the order of about half of what the government is proposing to spend” on jobseeker, or $2.3bn.
On Wednesday Rishworth said that while Labor had “focused our support on strengthening the safety net” the Coalition had “just torn that down”.
“We also want to ensure that people are able to move off income support into careers, into jobs that are meaningful for them,” she told reporters in Canberra.
Rishworth noted that “75% of people on jobseeker and other working-age payments are not reporting any earnings, which means they’re not even using the income free threshold that’s available to them”.
Rishworth said there were “no costings” of the Coalition’s policy and “no analysis of what actual improvement it will mean for all those people that have been locked out of the labour market”.
In April the treasury secretary, Steven Kennedy, indicated that how welfare payments interact with earnings will be a focus of the upcoming full employment white paper.
Kennedy said that “the elasticity of labour supply is higher at the lower end of the income distribution, which is where those on income support are most likely to be”.
On Wednesday, Taylor cited the “very good” speech, arguing it reinforced the need for the Coalition’s policy because unemployed people are “paying an effective tax rate of 50-60 cents in the dollar” as their earnings increase.
Taylor could not say how much the policy will cost, explaining it was still working with the PBO “now we’ve got the budget parameters”.
“We know that this is a policy that has the potential to get more people into work.”
