WA tells Feds: our sys­tem beats PRRT

Pilbara News - - News - Peter Wil­liams

The Bar­nett Gov­ern­ment has told a Fed­eral re­view of the pe­tro­leum re­source rent tax that its own roy­alty sys­tem is more eco­nom­i­cally ef­fi­cient and trans­par­ent.

The Trea­sury is look­ing into the PRRT af­ter claims oil and gas com­pa­nies were claim­ing ex­ces­sive de­duc­tions un­der the regime.

The State Gov­ern­ment’s sub­mis­sion said the ad val­orem roy­alty regime used in WA had lim­its on de­ductibil­ity and al­ways pro­vided a re­turn to the com­mu­nity when pro­duc­tion oc­curred.

“Hence they can be ar­gued to be fairer than rent-based sys­tems, such as the PRRT, where a con­sid­er­able num­ber of mar­ginal projects will not make any re­turn to the com­mu­nity,” the sub­mis­sion said.

“In an en­vi­ron­ment of height­ened need for so­cial ac­cep­tance of, and ac­count­abil­ity in, re­source devel­op­ment, the trans­parency in the de­sign and struc­ture of roy­alty sys­tems takes on in­creased promi­nence.”

It said re­source rent ar­range­ments were not well un­der­stood and ver­i­fi­ca­tion was based on com­pany in­for­ma­tion usu­ally re­garded as con­fi­den­tial.

The Gov­ern­ment added that the ad val­orem roy­al­ties had lower com­pli­ance costs for busi­nesses.

It re­it­er­ated a call for the Fed­eral Gov­ern­ment to share PRRT rev­enues with the States where the oil and gas projects were lo­cated.

Four WA shire coun­cils also made sub­mis­sions to the re­view, call­ing for PRRT rev­enue to be used for a na­tional roy­al­ties for re­gion scheme.

The North West Shelf project.

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