MATTERS OF URGENCY

Senator GHOSH (Western Australia) (16:12): Gas is an incredibly important resource for Australia. It's important to our economy. It supports thousands of jobs across the country, contributes billions of dollars to the economy as a whole and brings in vital export revenue.

That revenue is used to directly and indirectly increase the standards of living of Australians. As a flexible source of power, it is a vital element in our transition plan to a renewable economy and energy grid. As we phase out coal and bring on new renewable energy sources, we need gas to firm it.

Gas is also a really important industrial feedstock for a number of industries in Western Australia, and it's a really important fuel for those hard-to-abate energy needs in other parts of the Western Australian industry, including the resources industry. I'd also say that our reliability as a gas exporter is vital to maintaining strong trade relations with regional allies and partners.

Our stability in providing exports to our trade partners during the most recent energy crisis that was created by conflict in the Middle East ensured that Australia was able to leverage those relationships—as ably demonstrated by the efforts of the Prime Minister and the Foreign minister, among others—to ensure that we didn't run out of fuel at a key time and that our fuel supplies remained stable.

A 25 per cent export tax, taken at face value, may well be a good-faith effort to increase the revenue gained off the gas industry. That wasn't the substance of some of the submissions we heard at the inquiry. Some of them were very clear that the purpose of this tax was to tax the industry out of existence—to make it economically unviable.

I think our starting point would be the same in terms of getting a fair share from our resources, and the question is how you do that. One of the interesting parts of sitting on an inquiry and listening to a really large range of people across a relatively short period of time but in quite a lot of detail is that there are a number of different ways you could do this.

There is the current petroleum resource rent tax. There's what would be called a Brown tax. There's a wellhead royalty.

You could put in place an export tax. There are a range of different ways to do it, but all of them have consequences for the industry, for energy supply in Australia and for investment in energy long term. You need to get into the detail of all that.

What emerged from the inquiry is that a 25 per cent export tax was a figure plucked out of nowhere. There was no empirical basis given by any of the advocates other than the amount of money that it would actually raise. And that's okay.

That can be superficially appealing. I get that. There's an elemental speciousness to it.

But, in terms of actually designing a policy that delivers a return for Australians while also ensuring our energy security, it needs to go a bit further than that and it needs to be better calibrated. We've already seen a number of changes to the PRRT under this government that have increased the amount of revenue collected, and our goal is to get a fair share.

If the Australian people are saying that they think we're not currently getting that or won't get it in the future then that's obviously something that we need to look at, but we need to do it in a way that is calibrated with the other objectives in this space—namely, having a gas industry that permits a transition to a renewable energy grid, having an industry that provides energy for Australians and doing it in a way that doesn't kill standards of living and doesn't destroy important parts of our industry.

That's really the overarching thing. The other point is—and I know there are different views on this in this chamber—that the government's also just set up a national domestic reservation in the gas industry for 20 per cent. That means that we're trying to guide gas that's produced in Australia into Australian industries to bring energy prices down and to stimulate or turbocharge our industries.

That is, I think, part of the problem as well. When you've got that policy being rolled out at the moment in order to deliver domestic reservation, which is in effect a kind of tax on the industry, the idea that you would then put a 25 per cent export tax on top of that is potentially devastating to that industry. It might destroy investment in that industry in Australia.

The result in the long term would be an Australia that's poorer, that's less energy secure, that's less able to do an energy transition and which ultimately will collect less tax from this industry. Rather than pushing for an arbitrary tax that doesn't actually have a foundation other than that people like the dollar figure at the end of it, I think where we landed in the report was that we wanted to investigate the options available and look at ways to ensure we're getting a fair share in a way that doesn't distort or destroy the industry or create perverse incentives within certain markets or industries.

That was the recommendation of the government members in the gas tax inquiry—that there were a number of options that were worthy of investigation to try and both ensure the viability of the industry and also increase the revenue that Australians receive from it. That's the course we'd advocate for. (Time expired)