Labor and the Greens plan to use a formal parliamentary inquiry to investigate Australia’s royalty regime for oil and gas companies, following a damning report.
The Australian National Audit Office released a report on Monday that found “significant shortcomings” with the way in which royalties are levied on offshore petroleum operations from the North West Shelf (NWS) off Western Australia.
The NWS project accounts for more than a third of Australia’s oil and gas production.
It is a joint venture between seven major international companies including Woodside Energy, BHP Billiton Petroleum and Chevron Australia.
The ANAO report found companies involved in the project had for years been claiming deductions for things that were not permitted.
It said the consolidated royalty schedule, which governs how royalties are calculated, had not been updated in the last 10 years.
Labor says it will now push to have the existing corporate tax avoidance inquiry include public hearings into the petroleum resource rent tax (PRRT) and commonwealth royalty regime, to cover royalties paid by the NWS project.
The Greens say they want to establish a separate inquiry to focus specifically on the revelations from the ANAO report.
The Tax Justice Network says either proposal would be a positive step.
“The Tax Justice Network has been calling for some time for a parliamentary inquiry into the systematic rorting of the PRRT by multinational oil and gas corporations,” the International Transport Workers’ Federation president, Paddy Crumlin, said.
“Any move from within the parliament for greater scrutiny and transparency on a tax, which is demonstrably failing to deliver appropriate benefits to the Australian people, is a positive step.
“Of course, the real test will be the findings of any inquiry and whether or not they are implemented by the government of the day.”
A spokeswoman for the NWS project said the project had been “open and transparent” about deductions claimed for the 30 years since royalties began.
She said deductions had been claimed with the full understanding of the Department of Industry, Innovation and Science and Western Australia’s Department of Mines and Petroleum that the deductions were allowable.
“[They] have expressed that they believe the processes over royalty collection are robust and accurate,” she said.
