Gaslighting The Nation: Australia's Gas Scandal Exposed, How Qatar Collects 20x The Revenue On Gas
- Hidden Archivez
- Sep 20, 2024
- 4 min read
Updated: Dec 21, 2024
Photo Cred: JonesDay
Introduction:
Australia's gas industry has been shrouded in controversy, with allegations of conflicts of interest, excessive subsidies, and a revolving door between government and fossil fuel lobbyists.
This article delves into the complex relationships and policies that have led to accusations of a "fossil fuel fiesta" in Australia.
Gas Export Tax System:
- The Australian government's gas export tax system has been criticized for favoring exporters over domestic consumers.
- The Petroleum Resource Rent Tax (PRRT) has been labeled a "joke" due to its ineffectiveness in capturing fair revenue from gas companies.
- Labor’s Minister for resources Martin Ferguson presided over a number of the legislative changes which allowed gas extractors to avoid tax before he retired from politics and became a fossil fuel lobbyist. Ferguson is one of many former politicians in the fossil fuels lobby.
- Liberal's Minister for Industry, Tourism and Resources Ian Macfarlane with a similar deal
Subsidies and Royalties: Fossil fuel companies in Australia receive more in subsidies than they pay in royalties:
- In 2020-21, the gas industry received $1.3 billion in subsidies, while paying just $1.1 billion in royalties.
- Since 2014, the gas industry has received over $10 billion in subsidies, while paying less than $6 billion in royalties.
- In 2019-20, the fossil fuel industry earned $115 billion from selling Australia’s petroleum and coal resources and paid state and federal governments an estimated $7.3 billion in royalties.
- Michael West Media calculated that powerful mining lobby Minerals Council of Australia and its experts from Deloitte had exaggerated tax and royalties payments by $45 billion over ten years. The report found a return of less than 10% to the owners of the minerals... The Australian public, on $2.1 trillion in mining exports.
In 2019, the last year for which we have royalties data, the multinational fossil fuel miners paid an estimated $7.3 billion in royalties. Most of the revenue, some $5.4 billion, came from coal; petroleum royalties amounted to just $1.8 billion.
Yet the value of coal exports was $54.6 billion while petroleum exports were 10% higher at $60.2 billion. Petroleum extractors paid royalties, including PPRT payments, of just 2.9% on their export revenue in 2019.
In comparison, last year coal mine royalty payments averaged 9.8% of total export value, which was also significantly higher than the average of the previous 10 years. Thermal coal royalties averaged about 8%; metallurgical coal payments averaged 9%.
However, Australia’s royalty payments on coal are still less than rates of payments globally. In the US, the coal royalty is 8% for underground mines and 12.5% for surface mines.
So why do the petroleum companies which operate in Australia get away with such small royalty payments compared to their coal colleagues?
In Australia, all royalty schemes for mineral commodities are operated by states and territory governments. The one significant exception is offshore petroleum, which is the sole jurisdiction of the federal government.
Up until 1987 there was no system to ensure multinationals paid royalties for offshore petroleum. The Hawke government introduced the PRRT to ensure the public received a fairer payment in return for access to the resources. However, the PRRT has failed to deliver this.
Lobbying Influence: The fossil fuel industry's lobbying efforts have shaped government policies:
- The Australian Petroleum Production and Exploration Association (APPEA) has been accused of "aggressive lobbying" to influence government decisions.
- APPEA's former CEO, Malcolm Roberts, was appointed to the government's Energy Security Board.
Revolving Doors: A disturbing trend of "job-swapping" between public servants and fossil fuel lobbyists has been exposed:
- Former WA Premier Mark McGowan took up multiple roles, including a part-time role as a strategic adviser for mining company Mineral Resources.
In August it was confirmed he was taking up a role at mining giant BHP
- Former Minister for Resources Martin Ferguson took up a position as a non executive director of British Gas
- Minister for Industry, Tourism and Resources Ian Macfarlane was appointed chief executive of the Queensland Resources Council
- Julie Bishop announced a new role with a Perth mining services company, following her departure from politics.
- Scott Morrison's reported links to a UK defence job highlight the need for lobbying reforms.
In 2022–23, Australian Federal and state governments provided a total of $11.1 billion worth of spending and tax breaks to assist fossil fuel industries. This year’s figure represents a 5% decline on last year’s, but subsidies in the forward estimates have increased from $55.3 billion to a record $57.1 billion. This is 14 times greater than the balance of Australia’s Disaster Ready Fund, which is used to respond to climate disasters.
As a result to all the above :
- Australia's PRRT revenue has declined by 90% since 2014, despite a surge in gas exports.
- Qatar earns $76 billion from gas exports, compared to Australia's $2.6 billion from gas exports, all whilst Australians face skyrocketing energy bills.
Gas Exports Skyrocket
Revenue Plummets
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