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PERTH (miningweekly.com) – The Australian petroleum and gas industry has called on the Queensland government to rule out any increases in taxes or royalties imposed on the industry.
Australian Petroleum Production and Exploration Association (Appea) COO for Eastern Australia Paul Fennelly warned that increasing royalty payments for the state’s natural gas industry was not the right choice for the state.
Fennelly pointed out that Australia’s natural gas projects, several of which were in Queensland, would deliver almost A$13-billion a year in royalties and taxes by 2020.
“This is an enormous contribution when you consider the A$8.8-billion paid by the oil and gas industry in taxes last year was enough to fund more than 7 000 new hospital beds, or pay the wages of almost 100 000 nurses.
“Increasing royalty payments from the state’s natural gas industry, which is currently investing A$70-billion on projects to deliver natural gas to the world and is responsible for 40 000 jobs, is simply not a strong choice for Queensland.”
Fennelly said that Queensland was poised to emerge as a major liquefied natural gas exporter that had the potential to bolster the economic performance of the state for decades to come.
“To impose an increased tax burden on this emerging industry would be extraordinarily short-sighted and damaging. Such measures would diminish the state’s worldwide reputation as a place to do business, and would clearly hinder efforts to bolster the sector’s international competitiveness and efforts to secure further investment.”
Appea’s plea to the Queensland government follows a similar plea from the Queensland Resources Council (QRC) at the end of April.
At the time, the industry body’s CEO, Michael Roche, said that a populist preference for an increase in the resource sector’s royalties to improve the budget’s bottom line would be a misinformed reaction, given the tough economic conditions and outlook confronting the sector.
“The coal sector for example has shed over 8 000 jobs in Queensland in the face of some of the most challenging business conditions in decades,” Roche said.
“There can be no dispute that the best means of boosting the resources sector contribution to the state’s fiscal repair task is the pursuit of policies to promote sector growth, not a resort to job-destroying tax increases.”