The Labor government should scrap the pretence it cares about renewables and be upfront with Australians, Sky News Political Editor Andrew Clennell says.
The government took three options from Treasury before reforming the Petroleum Resource Rent Tax (PRRT) in 2023.
It introduced a 90 per cent deduction cap at the time, ensuring a minimum taxable profit of 10 per cent, seen as the weakest option at the time.
Sky News’ Political Editor Andrew Clennell said the path of least resistance on energy reforms was “the Albanese way”.
“But I mean, the biggest fraud that this government perpetuates, one of the biggest, is they say ‘we’re all about net zero, we’re about renewables, that’s our priority’,” he said.
“But the only thing that keeps the budget and the economy going is mining.
“Why can’t you just be more honest about it instead of pitching for that vote and really perpetuating a bit of a fraud on the Australian people.
“Say: ‘look, we’re trying to develop this, but at the moment we’re living on this’, (but) it doesn’t fit what their base wants to hear.”
Critics of changing the PRRT, including the Coalition and resources companies, have argued further taxes on exported gas would damage investment.
Those in favour have pushed for as much as a 25 per cent tax on gas exports, arguing for more money made from extracting Australia’s resources to remain in the nation.
Sky News host Laura Jayes argued the current PRRT was “not fit for purpose”.
“We’re not getting the right return on investment, but there needs to be a quid pro quo here … it’s a complex picture and an oversimplification of it doesn’t serve any of us well,” she said.
“But I think the industry is just resisting and arguing for their status quo, this train is coming and it’s going to hit them if they don’t get involved and start designing it.”
Clennell and Jayes both agreed Australians would unlikely see an overhaul of the tax in the federal budget on account of the war in the Middle East.
It comes as a Senate Committee yesterday heard from Australian stakeholders supportive of changes to the tax.
Labor’s internal environmental action network pushed the Albanese government to consider a “very substantial tax” on gas profits made as the war in the Middle East bumps margins.
It argued Labor’s membership supported bigger returns for taxpayers, after MP Ed Husic announced he supported a 25 per cent export levy.
Speaking on Tuesday, however, Opposition Leader Angus Taylor said a 25 per cent levy would kill off Australia’s gas industry.
He claimed it would “close down” the industry, “and that is the intent of that tax”.
His colleague Andrew Hastie broke ranks earlier in the year, declaring he would be open to a 25 per cent tax.
MST Financial energy analyst Saul Kavonic penned a piece in The Australian, saying Australia had the right to tax its gas “any way” it pleased.
“We just need to be clear-eyed about the trade-offs,” he wrote, before suggesting a new gas tax would damage future investment and erode the nation’s trading reputation.
“We must ask if a new gas tax is worth the risk of running out of fuel next month. It would change the rules on our trading partners, including Japan, Korea and Malaysia; the same partners Albanese is asking to keep sending us fuel during the global crisis,” he wrote.
“If we break the rules amid a shortage, they may do the same to us. We wouldn’t want them slapping a new tax on fuel exports to us any more than they want us hitting their gas investments.”