Tax increase on gas industry threatens energy security

Click here for TV/audio grabs with CEO Janette Hewson

The Queensland Resources Council (QRC) says now is the worst possible time for the federal government to increase taxes on gas exports that will provide very little return to Australians in the long run.

QRC Chief Executive Officer Janette Hewson said at a time of heightened global instability and fuel insecurity, the federal government should instead focus on policies that drive new investment.

In a submission to a Federal Parliamentary Committee, QRC outlined the importance of Queensland’s gas industry to energy security in Australia and among our trading partners, keeping the lights on and heating in homes and supporting major industries and manufacturers.

“The introduction of an extra federal tax on top of the existing state royalty system would amount to a punitive double taxation for the gas industry, undermining new investment, jobs and crucially, energy security,” Ms Hewson said.

“Recently we have seen firsthand the importance of Queensland’s fuel sources during geopolitical instability to power our major industries, to provide supply along the east coast and to also stabilise our economy.

“The industry is already facing uncertainty as the government finalises its National Gas Market Review, including supply security settings, export control and rules for a domestic reservation scheme.

“A new gas tax will only compound uncertainty, delaying investment and future supply.

“Despite claims a new tax will raise tens of billions in revenue, history shows punitive taxes reduce investment and ultimately deliver less economic benefit for governments and communities.

“As we’ve seen with Queensland’s coal sector, the introduction of the world’s highest royalty rates has led to severe reputational damage to our state’s largest export industry, reduced investment, job losses and reduced spend with regional businesses,” Ms Hewson said.

The oil and gas industry is a significant contributor to the Queensland and national economies and paid $22 billion in taxes and royalties last financial year.

“In Queensland alone the gas industry contributed $21.7 billion, supported more than 94,000 local jobs and spent $6.4 billion supporting local businesses and community organisations.

“The best way to increase support to Queensland communities is through policies that encourage new investment and create new projects, not by imposing new taxes that drive away investment that will shrink the industry.

“Queensland’s resources sector underpins hundreds of thousands of jobs and is the cornerstone of our energy security.

“What the industry needs right now is stability – not a surprise new tax.”

Media Contact:

Matt Dunstan – [email protected]