“Modest and responsible” is how Labor describes its plan to increase the tax take from multinational corporations by limiting deductions and implementing the OECD’s 15% minimum tax.
Along with its cut to public service consultant spending and an end to the Coalition’s rorting and pork-barrelling, it forms the centrepiece of the opposition’s decidedly unambitious fiscal plan.
The multinational crackdown will raise just $1.89 billion over the forward estimates, partly because of a delayed introduction until 2023.
No one will ever vote against forcing multinationals to pay more tax. It’s as near to a victimless crime as you can get in tax policy. But there is a subset of multinationals who will continue, under Labor’s “modest and responsible” tax reforms, to get away with the biggest theft in Australian history.
Few Australians appear to know about the failure of multinational fossil fuel companies to pay anything to Australians for the privilege of making tens of billions from the sale of Australia’s oil and gas reserves. As Crikey reported this week, global giant Chevron has actually been paid more by taxpayers in subsidies for its failed Gorgon carbon capture and storage project than it has paid in tax to 2020, despite generating $37.6 billion in revenue since 2016.
Chevron has now flagged that the massive surge in export revenues from rising global energy prices means it will finally start paying tax in Australia — $650 million in 2022 and more beyond that.
Other multinationals have also paid no tax or petroleum resource rent tax (PRRT) despite massive revenue from oil and gas exports.
Between 2015 and 2020, Exxon earned $57 billion in revenue, claimed it made zero profit, and paid no tax. Nor has it paid any PRRT.
Shell earned $25 billion revenue, claimed a total profit of $616 million, and paid zero tax and zero PRRT.
Japanese company Inpex made $7.6 billion in revenue, claimed profits of $39 million and paid no tax or PRRT.
The relatively new Ichythys project, run by Inpex, Total and other companies, generated more than $7 billion in revenue since the first gas was shipped in 2018, without paying any tax or PRRT.
Remember, these figures are all before the dramatic surge in energy prices that has seen gas export revenue double in the past 12 months.
Local companies like Santos are in a similar position with both their onshore and offshore projects. Santos made $21 billion from onshore and offshore gas in the five years to 2020 and claimed just $73 million in profits and paid no tax and about $200 million in PRRT.
Woodside earned $36 billion in export revenue between 2015 and 2020, claimed just under $8 billion in profits, and paid $250 million in tax and no PRRT.
As with Chevron, Santos and Woodside are receiving more in subsidies from the Morrison government for scams like carbon capture and storage than what they are paying in tax.
Labor in conspicuously silent on why fossil fuel multinationals and Australia’s own fossil fuel giants should be allowed to in effect capture Australian resources for themselves and make billions off them without paying Australians for the use of these finite resources — let alone the catastrophic damage they are causing via carbon emissions.
The only party that has raised the issue of the failure of multinationals to pax tax or royalties for offshore gas has been the Greens, who want to replace the broken PRRT.
Fiscally that would be the least damaging new tax possible, with the burden falling on mostly foreign shareholders enjoying superprofits from Australian natural resources.
The companies would argue that a new tax would deter investment, but the current scramble to open new gas fields despite the need for an urgent transition away from fossil fuels and a growing reluctance of major investors to support new fossil fuel projects suggest very little is likely to stop investment while energy prices remain high.
This article was first published by Crikey.
Bernard Keane is Crikey’s political editor. Before that he was Crikey’s Canberra press gallery correspondent, covering politics, national security and economics.
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