Factcheck: Claims that Australia gives its gas away for free aren’t “tosh” — despite what Madeleine King says

Last week, Australia’s Resources Minister and Shadow Minister tried to defend the gas export industry and current gas tax arrangements.

In particular, they tried to contest the claim that Australia gives gas away for free to multinational gas companies, without royalty payments or payments of Petroleum Resource Rent Tax (PRRT).

Resources Minister Madeleine King scored some headlines with her comment to Radio National Breakfast, that free gas “is clearly an absurd proposition. And to be frank, I’m mystified as to how they get away with such tosh.”

But what exactly was this “tosh”? This “absurd proposition”? It’s important to read her quote in full:

“It’s only in the universe of the Greens party and their friends that they can say that spending hundreds of billions of dollars across the country could be considered in any way free.”

It’s a straw man argument. Everyone acknowledges that gas export facilities cost billions to build. That is not the issue. The issue is that the gas owned by the public is given to those expensive facilities for free.

Minister King never disputes this because it is plain that her government does not charge royalties for most offshore gas and until recently, no gas export company had ever paid PRRT. Constructing the facilities cost money, but they do get the gas for free.

Not to be outdone, Shadow Resources Minister Susan McDonald put out a press release after the Senate inquiry, saying “claims that gas is ‘given away tax free’ were directly challenged during the hearings, including by Treasury officials.”

Really? Did Treasury officials really challenge this? Senator McDonald certainly put this proposition to public servants at the inquiry:

Senator McDonald: Good afternoon. Thank you for your attendance today. Yesterday we heard the claim from some witnesses that Australian gas is given away for free. My direct question is: is this statement correct?

Public servant: I would suggest that there are a range of factors that impact on a gas company’s cost base, if you like…

The answer goes on for some time, but what’s important is that in response to Senator McDonald’s direct and simple question, a public servant gave an indirect and complicated answer. She had to give a waffly answer because a straight answer would have been embarrassing for the government, the opposition, and the public service.

Minister King, Senator McDonald, and public servants can dish up all the word salad they like, but this will not change the simple fact – large volumes of Australian gas are extracted and exported without paying royalties or PRRT.

In other words, Australian gas is given away for free.