Australia’s oil and gas sector is expected to deliver $16 billion to state and federal governments this fiscal year, underpinning crucial public services and infrastructure spending.
According to new forecasts compiled by the Australian Petroleum Production & Exploration Association (APPEA), the industry will pay $16.26 billion in 2022-23, up from $6.46 billion in the previous fiscal year.
The total comprises corporate income tax, the Petroleum Resource Rent Tax (PRRT), state royalties, and excise for businesses with fiscal years ending on 31 December 2022 or 30 June 2023.
“The oil and gas industry is delivering substantially bigger returns for Australians and this $16 billion will help governments funds policies like disability support and paid parental leave as well as important infrastructure like roads, schools and hospitals,” APPEA Chief Executive Samantha McCulloch said.
McCulloch stated that gas companies are among Australia’s largest taxpayers, yet they face a slew of regulatory intrusions that jeopardise energy security, investment, and future revenue streams to governments.
The figures represent estimates, and ultimate revenues will be affected by changing economic situations, such as altering prices and foreign currency exchange rates.
According to McCulloch, along with other contributions made by the sector in royalties, corporate income tax, and other levies, the PRRT provides increasing returns to taxpayers.
“But it’s important to remember direct payments are only one part of the industry’s broad economic contribution – enabling almost $500 billion economic activity annually, supporting 80,000 jobs, providing essential energy to millions of homes and businesses, including major sectors like manufacturing and transport, and facilitating economic growth. For example, APPEA’s Financial Survey has found the industry’s estimated direct spending on Australian goods and services would grow to $45 billion this financial year, up from $29.9 billion previously,” she stated.
APPEA members who export in addition to providing domestic supply are expected to contribute more than $15 billion to governments this fiscal year, up from $5.67 billion the previous year.
McCulloch said between 2010 and 2020, the sector invested approximately $300 billion in LNG projects, with a demonstrable return on investment.
“With changing economic conditions, including higher than forecasted prices, the taxation profile of the LNG industry is changing and the sector is on a faster path to make up the losses accumulated during construction, bringing forward timeframes for tax payments. This further shows how the tax system – with long-term settings encouraging investment in major multibillion-dollar, high-risk nation-building projects – is working, stimulating investment, job creation and delivering for Australians,” McCulloch added.
