Anthony Albanese is being pulled in opposite directions as he prepares to bring forward a key tax on offshore gas projects.
The Prime Minister wants to increase the revenue taken from the Petroleum Resource Rent Tax by $2.4bn over the next four years by bringing forward an adjustment to the levy.
The government plans to introduce a 90 per cent cap on the use of deductions that can be offset under the PRRT from July 1.
The changes, which have been under consideration since 2019, would result in major liquefied natural gas projects paying PRRT about a decade earlier than they would have otherwise.
The Australian Petroleum Production and Exploration Association has backed the Albanese government’s proposed changes to the PRRT and is calling for a bipartisan approach to drive them through parliament.
Opposition Leader Peter Dutton wants red tape on the gas industry cut. Picture: NCA NewsWire / Martin Ollman
After earlier signalling the Coalition would oppose the changes, Peter Dutton on Friday outlined his demands for his support of the legislation.
The Opposition Leader wants Labor to streamline approvals of gas projects in exchange for the Coalition’s support, which the government needs in order to pass its PRRT changes through parliament.
The Prime Minister admitted the reforms were “modest” but said the government wanted to support the gas industry.
Labor can easily get legislation through the lower house, but it needs to deal with either the Coalition or the Greens and the crossbench in the Senate, where it doesn’t hold a majority.
The government had urged the opposition to support the PRRT changes, saying if the Coalition didn’t get on board it would be forced to negotiate with the Greens in the upper house.
Mr Albanese said earlier this month the Liberals and Nationals should support the changes given gas companies and the APPEA had both said “they can live with” the reforms.
Deputy Liberal leader Sussan Ley told reporters on Friday Mr Dutton had made a “sensible offer” to work with the government on the “critical issue” of unlocking supply in the gas market.
“We all know that investment is often held up and taken offshore when the approvals and the red tape just get too onerous,” she said.
“So, this is a sensible approach by Peter Dutton to say to the government, we need these projects to go ahead.
“This country needs these projects because people need access to affordable, reliable power. So, an offer to work with the government is a very sensible one.”
The Prime Minister’s PRRT proposal has the gas industry’s support. Picture: NCA NewsWire / Martin Ollman
But the Greens have reacted with alarm, which isn’t surprising, given they have a mandate to oppose all new coal and gas projects.
The Greens are calling on Labor to rule out watering down environmental protections and doing what the minor party describes as a “dirty deal with the Liberals”.
Greens senator Nick McKim rejected the suggestion that sustained pressure from the Greens on the PRRT would only entice Labor to deal with the Coalition to pass the relevant legislation through parliament.
“Political donations are institutionalised bribery,” he told reporters on Friday.
“And what we are seeing is the effect of that and the giant hooks that the gas corporations have into both the Labor and Liberal parties.”
Greens senator Nick McKim claims Labor and the Liberals are in the gas sector’s pocket. Picture: NCA NewsWire / Gary Ramage
Senator McKim said the Greens’ message to the government was “very clear”.
“We’re saying to the government, work with us to make sure the gas corporations pay their fair share of tax,” he said.
“Don’t work with Peter Dutton to deliver for the gas corporations, letting them off the hook and undermining environmental protection in Australia.”
Limiting the proportion of PRRT assessable income on LNG projects was one of the key recommendations made by a Treasury review of gas transfer pricing, which the government released earlier this month.
The Greens want more “substantive” reforms made to the PRRT, which they say would raise $94bn over the coming decade under costings of their proposal conducted by the Parliamentary Budget Office.
Asked if his party’s own policies would “scare off” gas companies, Senator McKim said they would force the industry to pay its “fair share of tax” so the government could “genuinely help” Australians with the cost of living.
Labor isn’t likely to be feeling amenable towards the Greens at the moment, given the two parties remain locked in negotiations over the government’s signature housing policy.
Tensions over the Housing Australia Future Fund recently boiled over, with several government MPs shouting at the Greens over their opposition to the $10bn investment vehicle in its current form.
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