Australian oil and gas giants pay extra $9billion in tax

Australia’s gas and oil exporters will be forced to cough up an extra $9billion in taxes after a scathing report recently revealed five major players in the industry had not paid income tax for the past seven years.

Multinational giants will almost triple their financial contribution to the federal and state governments this financial year after years of sending huge profits offshore using perfectly legal accounting methods.

The gas export sector is expected to fork out an estimated $13.87 billion in 2022-23 – up from $4.8 billion last financial year, according to Australian Petroleum Production & Exploration Association (APPEA) forecasts.

More than half ($7billion) will be in corporate income tax, along with an extra $500 million in petroleum resource rent tax, $860 million in state royalties and $690 million in excise.

APPEA has stressed final revenues will be subject to changing economic conditions, including fluctuating prices and foreign currency rates.

Australian gas and oil exporters will cough up an estimated $13.87 billion in taxes and royalties 2022-23, compared to just $4.8 million in 2021-22 (pictured are technicians at Chevron)

The additional taxes and royalties will help bankroll public roads, schools and hospitals.

‘These forecasts demonstrate some of the direct financial value to the economy and the Australian public of long-term taxation settings that underpin these large, capital-intensive and complex projects,’ APPEA chief executive Samantha McCulloch said.

‘The taxation profile of the LNG industry is evolving with changing economic conditions, including higher than forecasted prices.

‘The industry is on a much faster track to make up the losses accumulated during the construction of these complex and capital-intensive projects, bringing forward timeframes for tax payments.’

She added gas exporters were delivering huge economic benefits for Australians while helping customers across Asia reduce emissions.

‘The Federal Government estimates Australia’s LNG has the potential to lower emissions in importing countries by around 166 million tonnes of carbon dioxide annually by helping them switch from higher-emissions fuels – this is equivalent to about a third of Australia’s annual emissions,’ Ms McCulloch said.

Australian gas and oil exporters are forecasted o cough up an extra $9 billion to federal and state government, much of that in corporate income tax

The additional taxed and royalties from gas and oil exporters will go towards schools, roads and hospital (pictured, a rigger drilling for coal seam gas reserves in Queensland)

The news comes as the former competition watchdog boss called on multinational oil and gas companies to share massive windfalls from soaring prices driven up supply interruptions resulting from the Russia-Ukraine conflict.

Former ACCC chairman Rod Sims believes the oil and gas sector made ‘huge revenues with very little employment’, compared with other industries.

‘It’s really unhealthy for society having companies make huge gains when others in society are suffering those same high prices,’ he told Nine Newspapers.

‘With the prices as high as they are, I think it’s most unlikely that people would think there’s a fair share of revenue coming to the Australian public from these projects. It needs to be looked at now.’ 

The Australia Institute earlier this year revealed five energy giants paid no income tax over the past seven years, despite generating a combined $138billion in profit. Pictured: Santos LNG plant Darwin

‘These are enormous projects they’re dealing with so, of course, the dollars are going to be large – but it’s the tax rate that’s key and how much return they are getting, particularly at this time when they are making very large amounts of money.’

The Australia Institute earlier this year revealed five energy giants – Chevron, ExxonMobil, Arrow Energy and Australia-Pacific LNG and Senex – paid no income tax over the past seven years despite generating a combined $138billion in profit. 

It prompted calls for Prime Minister Anthony Albanese to impose ‘far greater scrutiny’ on the firms who are forcing massive price hikes on customers despite paying little or no tax.

‘It’s unbelievable that you can make $138 billion and pay nothing in tax. Our governments should not be letting this happen and we need an overhaul of how the oil and gas industry is taxed in Australia,’ Australia Institute principal adviser Mark Ogge said earlier this year.

Prime Minister Anthony Albanese has been urged to impose ‘far greater scrutiny’ on multinational giants paying little or no tax

‘The gas companies promised us billions in revenue and instead we end up with little in our pockets and a whole lot more climate impacts.

‘We trust our politicians to tax our natural resources to the benefit of all Australians, but instead some of the largest gas miners, members of APPEA, are paying absolutely nothing.’ 

APPEA had estimated the members of the association would pay roughly $11billion in tax by 2020 – saying the gas and oil exploration would bring significant revenue to Australia.

Instead, the energy giants have paid no money in tax – while Australian venture Santos paid just $6million income tax from $28.9billion.

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