The Australia Institute report finds that the total value of our natural gas exports over the four years to June 2024 was $265 billion. It estimates that 56 per cent of this resulted in no royalties, state or federal.<\/p>\n
\u201cThis means that more than half the gas exported from Australia is given for free to the companies exporting it,\u201d it says.<\/p>\n
The royalties that were paid over the past four years represented less than 4 per cent of the total value of the gas exported. It should have been nearer 9 per cent, yielding an extra $13 billion.<\/p>\n
We\u2019re always being told how important mining and gas are to the economy. But how, exactly? It\u2019s not our job to help big foreign companies make big profits. Mining and gas are capital-intensive industries, meaning they don\u2019t employ many people. And most of the capital equipment they use would be imported.<\/p>\n
The increasingly foreign-owned BHP tells us it\u2019s the Big Australian, while telling the taxman it\u2019s the Big Singaporean.<\/p>\n
So it\u2019s vitally important that the businesses \u2013 even when they\u2019re locally owned \u2013 pay a fair price for the natural resources we allow them to extract and take away. The energy and minerals are, after all, non-renewable.<\/p>\n
And it\u2019s equally important that the mineral and gas companies pay a fair bit of tax on their hefty profits. We\u2019ve had far too much, for instance, of the increasingly foreign-owned BHP telling us it\u2019s the Big Australian, while telling the taxman it\u2019s the Big Singaporean.<\/p>\n
Which brings us back to next week\u2019s roundtable. The radical change in the way companies are taxed, proposed by the Productivity Commission<\/a> as a way of improving our productivity, has been opposed by 24 business lobby groups, and isn\u2019t likely to fly.<\/p>\n But it was intended to reduce the company tax paid by most of our companies, while covering the government\u2019s loss of revenue by increasing the tax on our 500 biggest companies, many of them the local subsidiaries of foreign multinationals.<\/p>\n The change would have made it harder for them to fiddle their taxes. And they would have included our big foreign-owned gas companies.<\/p>\n The Productivity Commission\u2019s modelling in preparation for the roundtable includes an assessment of each of our taxes: how much they damage the economy by discouraging people from working, saving and investing.<\/p>\n Loading<\/p>\n I have doubts about these exercises, but the commission\u2019s assessment gave the worst rating to the state governments\u2019 stamp duties, the rate of company tax, and the top rate of personal income tax. (I\u2019ve been on that top rate for almost all my career, and it\u2019s done nothing to dampen my enthusiasm for bashing out another pontification about economics.)<\/p>\n But here\u2019s the point: it gave the petroleum resource rent tax a small positive rating. In other words, it said that, if the rate of this tax were increased, it would do more to encourage working, saving and investing. That\u2019s an indication of the price we\u2019re paying by allowing the accidental free ride we\u2019re giving the gas exporters to roll on.<\/p>\n Earlier this year, the boss of the Australia Institute, Dr Richard Denniss, caused a stir by claiming that the government takes more money from uni students through HECS than it collects from the petroleum resource rent tax. It was such a strange assertion the ABC set its fact-checkers on him. They had to admit his numbers were right<\/a>.<\/p>\n And though it may seem an odd comparison, it\u2019s a valid one. The government makes graduates contribute to the cost of their education because it doesn\u2019t have enough money to do everything it would like to. In which case, why is it giving our gas away to big companies?<\/p>\n