The Politics    Wednesday, May 31, 2023

PRRTy trick

By Rachel Withers

Tanya Plibersek and Jim Chalmers face each other, laughing, on the government benches in the House of Representatives

Environment Minister Tanya Plibersek and Treasurer Jim Chalmers during Question Time, May 23, 2023. Image © Mick Tsikas / AAP Images

The petroleum resource rent tax changes appear to be one giant sweetheart deal, and we are the losers

Environment Minister Tanya Plibersek did not even bother to answer the question. Asked on RN whether the government had given Woodside Energy a “sweetheart deal” in its proposed changes to the petroleum resource rent tax, through an exemption applying only to the oil and gas producer’s North West Shelf project, Plibersek laughed that this was “the sort of thing that you’d expect from Adam Bandt”. “We’re working really hard in Australia to get to net-zero carbon emissions by 2050,” she continued, failing to address the substance of the question. Asked again, Plibersek barrelled on: “No government has done more to get us on the path to net zero than this government, and I’m really proud of that.” Fill-in host Hamish Macdonald tried again, asking why Woodside would be spared from the extra tax. “If you want to talk about specific decisions made in the budget about the tax regime, you might want to get the treasurer on the program,” Plibersek replied, before returning to her rote answers about net zero. I’ve written before about the poisoned portfolio Plibersek has been handed, with the loyal frontbencher expected to defend Labor’s indefensible environmental policies. Today, the environment minister sounded like she had completely given up on trying to defend the party’s policies – net zero fucks left to give.

What is going on with this Woodside exemption, and with this hopelessly weak change to the PRRT? (Let’s remember that these are changes the oil and gas industry has welcomed.) The Greens started raising questions yesterday, accusing Labor of a “sweetheart deal” after it was revealed that the cap on deductions would not be applicable to certain types of expenses, meaning the $34 billion North West Shelf gas project would not be impacted. “By excluding Woodside’s biggest project from the gas tax, Labor is weakening the gas tax to benefit their donors,” Bandt said, with the Greens preparing to go hard on the PRRT in Senate estimates. And go hard they have. Treasury spokesperson Nick McKim yesterday asked the ATO for the value of gas companies’ carried-forward deductions, with officials revealing that they were sitting on $277 billion of tax credits, just waiting for a taxing day. McKim has today tweeted that estimates has revealed “exactly who was in the room while Labor’s PRRT proposal was being designed: Woodside, Santos, Shell, BP, ExxonMobil and more”. “Political donations paying off big time yet again,” he added.

Woodside has rejected suggestions of a “sweetheart deal”, saying its North West Shelf project remained subject to the PRRT, but that its main contribution was under different forms of tax. (The Greens noted in a statement that the Commonwealth received just $345 million from Woodside in 2021–22, with most of the company’s tax going to Western Australia. As Crikey points out, Woodside’s net profit after tax was $2.4 billion last year.) It’s telling that Plibersek, who is surely across the details of this policy, didn’t bother to put forward any defence, as one of the first Labor ministers to be publicly asked about the “sweetheart deal”. But not nearly as telling as the fact these tax changes are so weak to begin with that the industry has been openly encouraging the Coalition to back them.

The opposition looks ready to come on board with the PRRT reforms (Labor needs either the Coalition or the Greens), with leader Peter Dutton now offering to back the already very gas-friendly reforms if the government offers to reduce red tape and wait times on future gas project approvals (a “sensible approach,” according to Liberal deputy Sussan Ley). As the AFR reports, the Coalition may even be open to working with Plibersek on her reforms to the Environmental Protection Act, which resources groups claim go too far. I’m sure the Coalition’s involvement will fix that right up.

Is the government really going to deal with the out-of-touch opposition rather than the Greens and David Pocock on the pathetic PRRT reforms, adding further sweeteners for the gas industry in order to win the Coalition’s approval? This, after all, is the same opposition that voted against Labor’s 2030 emissions-reduction target, refused to engage on the safeguard mechanism, and recently declared to the gas industry that it would reverse Labor’s interventions, with a “carbon tax” dig for good measure. The government can deal with Bandt on this, or it can deal with Dutton. The former would involve scraping back extra revenue from the gas corporations, with more money added to the budget’s bottom line, while the latter would involve making life even easier for the gas giants that already pay very little tax. If Labor does choose to consort with the Coalition, it will be a very sweet deal for the fossil-fuel lobby, which continues to donate significant amounts of money to both major parties.













Rachel Withers

Rachel Withers is the contributing editor of The Politics.

@rachelrwithers

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