Only in Australia. As our major gas companies and some of the world’s biggest fossil fuel multinationals make tens of billions in profits from selling Australia’s hydrocarbons, the actual return to taxpayers is set to fall in coming years, the budget papers show.
In the Morrison government’s last budget back in April, taxpayers were finally going to see some return from the Petroleum Resource Rent Tax (PRRT) scheme, which has generated pitiful amounts of revenue in recent years courtesy of gas companies running up huge capital expenses and artificially inflating them.
Between 2022 and 2026 taxpayers would have seen $9.6 billion in PRRT revenue, according to the estimates in the April budget. In Labor’s budget tonight, that revenue forecast has been downgraded to $9.15 billion, despite a small forecast increase this year and next due to the surge in global gas prices. That surge has left local gas-based manufacturers struggling in Australia and delivered windfall profits for gas exporters.
According to the government, revenue is expected to fall “as production in maturing fields (including in the Bass Strait) declines and the prices of oil and gas stabilise. PRRT liabilities will be further weighed down by the cost of decommissioning parts of the Bass Strait fields, following a direction from the National Offshore Petroleum Safety and Environmental Management Authority to commence decommissioning works in coming years.” Oil producers will be able to claim the cost of cleaning up after themselves against their PRRT liabilities.
The downgrade in PRRT revenue reflects just how utterly unfit the scheme is to handle gas exports. Labor — like the Coalition, a recipient of generous donations from major gas exporters like Santos and Woodside — refuses to do anything to fix it.
Remarkably, the amount of revenue forecast for 2025-26, $2 billion, is 40% lower than the amount of PRRT revenue the Howard government earned in 2002-03 adjusted for inflation. In real terms, fossil fuel exporters are paying less PRRT than before the massive expansion of the Australian gas industry over the past 15 years.
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