Treasury spokesperson, Senator Peter Whish-Wilson, today commented on new tax statistics released by the ATO revealing tax credits to oil and gas giants have ballooned to $324 billion.
"The PRRT is the most egregious rort in the Australian tax code.
"The failure of successive Liberal and Labor governments to address this problem has resulted in oil and gas companies accumulating a whopping $324 billion worth of tax offsets.
"This equates to around 70% of the Commonwealth Government’s total revenue.
"The Government’s Bill scheduled to be debated in parliament this week will raise only $6 billion in additional revenue over ten years.
"While the world is in the middle of an LNG boom, we’re practically giving the stuff away.
"The fundamental flaw with the PRRT is the overly generous uplift rates applied to carried-forward expenditure which is used to offset taxable income.
"Most problematic are exploration expenses which compound at 15% above the long-term bond rate, and can be transferred from one project to another within a company.
"On current trends, it is an open question whether PRRT tax offsets will ever be expired. Some companies might ride a multi-decade long boom and end up tax positive."