The Petroleum Resource Rent Tax

The Petroleum Resource Rent Tax (PRRT) was established in 1988 to ensure that Australians benefit from the extraction of the nation's oil and gas resources. However, its effectiveness has been questioned due to its complex structure and the generous deductions it allows, which have significantly reduced the tax liabilities of petroleum companies. As a result, the revenue collected from the PRRT has been relatively low, especially when compared to the substantial profits generated by these companies. For instance, in 2022-23, Australia exported 83 million tonnes of liquefied natural gas (LNG), yet the PRRT revenue was only $2.4 billion, a modest increase from $2.2 billion in 2008-09, despite a 437% increase in exports during that period. ​ Your support helps me keep creating content that challenges the status quo and gives a voice to the issues that matter. Let’s stand together and make a difference—hit that subscribe button and join the movement! Oh, and don’t forget to check out the song right here! https://youtu.be/olmERhYgasA

Compounding this issue, a significant portion of Australia's gas exports are not subject to royalties. Research indicates that 56% of gas exported from Australia attracts zero royalty payments, effectively allowing multinational gas corporations to access these resources without compensating the Australian public. Over the past four years, this has resulted in an estimated $13.3 billion in forgone revenue. ​
Furthermore, some major gas companies have managed to pay minimal or no income tax on their Australian operations. For example, Shell has acknowledged that it will never pay the PRRT on its share of the Gorgon project and has paid no income tax since 2015. ​
In contrast, other countries have implemented more effective taxation regimes for their natural resources. Norway, for instance, has successfully captured significant revenue from its oil and gas industry, which has been used to fund public services such as free university education and nearly free childcare. ​
While Australians do receive some revenue from the PRRT and related taxes, the current system's shortcomings have led to calls for reform to ensure a fairer return from the exploitation of the nation's natural resources.​ Your support helps me keep creating content that challenges the status quo and gives a voice to the issues that matter. Let’s stand together and make a difference—hit that subscribe button and join the movement! Oh, and don’t forget to check out the song right here! https://youtu.be/olmERhYgasA