WA tells Feds: our system beats PRRT
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.