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O'Neill cautions on new taxes

Image shows rolled up Australian dollars

Photo by Bloomberg

20th April 2023

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – The CEO of oil and gas major Woodside, Meg O’Neill, has urged the federal government to carefully consider the implications of tax changes to the oil and gas industry.

Speaking at the National Press Club this week, O’Neill said investors in the sector needed “confidence in stable regulatory outcomes, or we risk choking our energy industry, impacting both domestic and international supply”.

“This concerns our regional partners, who depend on current Australian gas projects to help them meet their decarbonisation commitments and to keep the lights on in Asian mega-cities,” she added.

O’Neill’s comments come as the federal government considers a review of the Petroleum Resources Rent Tax (PRRT), with Treasurer Jim Chalmers saying the advice contained within the report was the culmination of work done over the life of two governments, as well as substantial consultation and engagement over a long period of time.

This was followed by independent costings for the Greens, which according to The Guardian, could net nearly A$94.5-billion for the federal budget over a decade.

The PRRT is a tax generally on profits generated from the sale of marketable petroleum commodities, and since 2019 onshore petroleum projects have been removed from the scope of the tax.

O’Neill said this week that the Australian government had previously stated its support for the gas industry and provided strong reassurances that Australia was not “quietly quitting” its liquefied natural gas (LNG) industry.

“The same partners who invested in our gas projects can provide the capital to develop lower carbon hydrogen and renewable projects, but only if they consider it a secure investment.

“For Australia to remain an attractive destination for global capital, fiscal and regulatory certainty is paramount,” O’Neill said.

“We are already a big contributor. As the Treasurer acknowledged this week, high export earnings are helping the budget right now.

“We urge the government, in any changes to the tax framework, to consider the long-term and preserve Australia’s ability to attract the next generation of investment, jobs and energy supply.

“Overreaching now could risk undermining future revenue,” O’Neill warned.

She noted that in terms of regulatory certainty, agreement on clear processes and response times for project approvals was essential to unlocking reliable supply.

“Otherwise, energy investment will find another home, taking jobs and opportunities with it. Australia has a leadership role to play through the energy transition, but not through isolation or alienation from the outside world and from those who can bring the capital to fund the responsible development of major projects.”

Edited by Creamer Media Reporter

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