Do Tim Wilson’s claims on the gas export tax stack up? No, they don’t.

Shadow Treasury spokesperson, Tim Wilson, was on Triple J’s Hack yesterday and he made some interesting statements and claims about gas tax.

Let’s have a bit of a fact check.

STATEMENT:

Dave Marchese: Tim Wilson, politicians like Senator David Pocock are calling for a 25% tax on gas exports. And this idea has started to gain a bit of support from politicians across the board. You’re the Shadow Treasurer. Do you support a gas tax?

Tim Wilson MP: Well, it would very much depend on how these things are ultimately going to be designed and I’m not sure that’s necessarily the best way to address this. There are already royalties paid for gas that is exported.

FACT CHECK:

1. Royalties are not a tax

Gas companies like iron ore and coal (and other) miners pay state royalties because the gas is owned by states.

Gas companies want to take gas that Australians own and convert it into a product that can be sold for profit – much like a builder using bricks to build a house and then trying to claim what they paid for the bricks as the same thing as what they are paying in tax.

It is only right that state governments put a price on the gas they sell to miners. But that is just a business cost, it is not a tax on profits at all.

2. Most gas is royalty-free

What Wilson fails to point out is over half (56%) of gas exported from Australia attracts zero royalty payments, effectively giving a public resource to multinational gas corporations for free.

Almost all gas from offshore sites is royalty-free.

If Wilson thinks royalties are so good, he should be calling for a national royalty scheme for all off-shore gas and he can sign our petition calling on the government to do just that!

STATEMENT:

Dave Marchese: So, do you think these big multinational companies though are paying enough tax?

Tim Wilson MP: Well, there will never be a time that I’ve ever found in Australian history where people don’t think that large companies and multinationals are not paying enough. What we need is investment to get the fuel, to fuel the Australian economy.

FACT CHECK:

1. We do not have a gas shortage.

More than 80% of Australia’s gas is exported or used to convert into LNG so it can be exported.

Here’s a fun little nugget – more gas is used to convert gas into LNG than is used by the entire Australian manufacturing industry.

2. We do not need more gas

There is no prospect of Australia running out of gas – the government’s Future Gas Strategy 2024 reporting showed that even when you included contracted gas exports, we have more than enough capacity, and that actually if the world does move to net zero by 2050 the gas export will shrink drastically.

STATEMENT:

Dave Marchese: But does it bother you that Australia gets more taxes from beer, which is a headline that has really concerned a lot of people around Australia, than it does from the biggest gas exporters in the world?

Tim Wilson MP: The challenge is that that’s simply not true, that we’re looking at one specific tax rather than the full spectrum of taxes that are paid as well as royalties.

FACT CHECK:

1. Sigh, remember ROYALTIES ARE NOT TAXES.

But hey Tim, if you think gas royalties are so good, you would think WA would be making an absolute motza out of them, right? Right??

Whoops – WA raises even more money from gambling taxes than it does from gas royalties – that is quite incredible, given WA does not have pokies in clubs!!

2. Beer drinkers do pay more than gas companies pay the Petroleum Resource Rent Tax (PRRT)

It’s just a fact.

But also spirits drinkers pay more, people who drinks cider and pre-mixed drinks like vodka cruisers or Canadian Club pay more excise than gas companies pay PRRT. Heck, even smokers pay more!

STATEMENT:

Dave Marchese: Economists, sorry Tim Wilson, like Chris Richardson, saying this PRRT, the petroleum resource rent tax, initially was a great idea, but it’s failed and it’s not keeping up and we’re not getting as much money as we could be. It could be billions and billions of dollars a year, 17 billion annually according to some estimations. Are we missing out here?

Tim Wilson MP: Well, gas currently pays about $21.9 billion worth of tax, so that’s in excess of the number you put forward.

FACT CHECK:

1. Once again for those at the back: ROYALTIES ARE NOT TAXES

The figures Wilson is citing comes from a gas industry advert – one that includes $7.1bn in royalties and just $1.35bn in PRRT.

Wilson and the gas lobby want to include company tax as well when comparing the amount of tax paid by it and beer drinkers. Oddly it doesn’t want to include the income tax paid by beer drinkers when it compares the two.

We know for example that across 2014-15 to 2022-23 nurses paid more incomes tax than did the gas companies when you combined company tax and PRRT.

Gas companies like every other company in Australia must pay company tax. This is not some generous benevolence on their part.

2. We are not getting as much money as we should

The problem is even though the gas export values soared off the back of the Russia invasion of Ukraine, the amount of PRRT pair in 2022-23 was lower than it was in 2000-01 when Australia exported 97% less gas than in 2022-23!

The PRRT is a failure, we need a 25% tax on gas exports.