Gas giants pay no tax on income of $138 billion

Silhouette of gas plant and worker (strike hancock)
Gas plant (Image: Shutterstock)

New analysis of data published by the Australian Tax Office (ATO) shows that five of the gas industry’s most prominent companies have paid no income tax for at least the past seven years, despite a combined income from their Australian operations of $138 billion, according to The Australia Institute.

Four of the five members of the Australian Petroleum Production & Exploration Association (APPEA) (Arrow Energy, Australia-Pacific LNG, Chevron and ExxonMobil) that haven’t paid any income tax are foreign-owned, resulting in all profits heading straight offshore.

Related article: Woodside and BHP petroleum merger one step closer

The research from the Australia Institute comes as Prime Minister Scott Morrison is expected to open the APPEA conference in Brisbane today—the largest gas and oil industry event in Australia.

Findings include:

  • In a 2012 APPEA claimed Queensland coal seam gas LNG companies would have paid around $11.2 billion in federal income tax by 2020. They have paid almost none.
  • In 2015 Chevron estimated it would have paid around $4 billion in “direct taxations and royalties” by 2020. It has paid no income tax or resource tax over that period. 
  • In 2013 Shell claimed that its Prelude floating LNG project would pay $12 billion in taxes over the life of the project. Shell has since acknowledged it will never pay PRRT has paid no income tax since 2015.
  • An eighth company, Australian company Santos, paid just $6 million income tax on $28.9 billion of income, and paid no income tax from 2015 to 2018 and 2020.
  • A thorough overhaul of taxation of the oil and gas industry in Australia is long overdue.  

“It’s unbelievable that you can make $138 billion and pay nothing in tax. Our governments should not be letting this happen and we need an overhaul of how the oil and gas industry is taxed in Australia,” The Australia Institute principal advisor Mark Ogge said. 

“The gas companies promised us billions in revenue and instead we end up with little in our pockets and a whole lot more of climate impacts. 

“We trust our politicians to tax our natural resources to the benefit of all Australians, but instead some of the largest gas miners, members of APPEA, are paying absolutely nothing. 

“The federal government is virtually giving the resource away for free, gift wrapped in subsidies, mostly to foreign-owned companies, many of whom pay little if any tax.  

“Imagine if you trusted an agent to sell your house to get the best deal possible, but instead they gave it to their mate for next to nothing. This is what is happening with our gas resources.

“Far greater scrutiny should be given to the close ties between some of our political representatives and the oil and gas companies who benefit from their largesse with our money. “

APPEA acting chief executive Damian Dwyer responded saying, “This report mispresents our contribution, excludes direct payments like royalties and rents, and doesn’t reflect the way our tax system works.

Related article: New shipping fleet must be ‘geared for gas’

“The companies that this anti-gas group is referring to deliver more than $5 billion in direct payments to governments every year—that’s more than $150 billion since the late 1980s.

Looking at rents and taxes as a measure of economic contribution is far too a narrow lens—it totally ignores our overall contribution through employment, supporting other industries and facilitating regional growth, which was measured by AGIT at almost $500 billion a year.”

Previous articleWoodside and BHP petroleum merger one step closer
Next articleAussie researchers achieve night-time solar in world first