The announced changes to the Petroleum Resource Rent Tax (PRRT) will result in more revenue being collected early to meet Budget challenges, the Australian Petroleum Production & Exploration Association (APPEA) said.
“The changes aim to get the balance right between the undeniable need for a strong gas sector to support reliable electricity and domestic manufacturing for decades to come and the need for a more sustainable national budget,” APPEA Chief Executive Samantha McCulloch stated.
According to McCulloch, the announcement will give greater clarity to the industry as it considers future investments needed to ensure customers’ domestic and regional gas supply security.
“Our investments support tens of thousands of Australian workers and deliver substantial economic benefits to communities across Australia. PRRT revenues are already at their highest level ever, forecast to deliver revenue of more than $11 billion over the forward estimates. The PRRT changes are forecast to deliver an additional $2.4 billion over the forward estimates at current forecast commodity prices,” McCulloch added.
McCulloch said the outcome also brings to an end the protracted Callaghan Review, which had public input and will ensure the PRRT regime’s continued effectiveness and administration.
To ensure confidence in future investment, a bipartisan approach will be required, and APPEA urges the government to engage constructively and productively with the opposition.
For more than a half-century, according to McCulloch, Australia has also been a stable energy-producing nation for Asia’s energy-consuming countries.
“We cannot and must not walk away from this role, which is the foundation of our strategic ties throughout the Asia Pacific. It has also been the foundation of decades of prosperity for Australians. Gas is going to be a critical part of the global energy mix for decades. If Australia does not invest in new gas supplies, the slack will be taken up by others, costing Australian jobs and prosperity. The US has recognised the danger of this and is growing both its gas industry and its carbon capture and storage (CCS) industry,” McCulloch said.
McCulloch stated that gas companies were among Australia’s greatest taxpayers, with an APPEA financial study last month showing a near-tripling of the industry’s contribution to state and federal budgets this year, funding hospitals and roads.
“Gas will also play a central role in transforming our energy system for net zero – backing up renewables, producing low-carbon hydrogen and fuelling Australia’s manufacturing sector as well as the processing of critical minerals,” McCulloch noted.
She said Australia has supplied Asian economies with energy for decades, and now they want the country to assist them in decarbonising using Australia’s enormous carbon storage resources, creating a new business opportunity for Australia.
“As the International Energy Agency said in its recent Australia 2023 Energy Policy Review: ‘Australia is well-suited to large-scale deployment of CCS to facilitate domestic CO2 abatement and support regional emissions reductions’,” she added.
