24 Apr 2023
Media Release: Another $100b of tax forecast from LNG projects after $400b industry investment
State and federal governments will benefit from $100 billion in taxation receipts from gas export projects over the next two decades, helping fund public services and infrastructure including roads, schools and hospitals.
Highlighting the importance of Australia’s exports and maintaining a strong investment environment, an independent economic report has outlined how the nation’s long-term taxation settings are delivering growing public benefits after huge industry investment.
Wood Mackenzie’s LNG Taxation Estimates and Review found $USD 310 billion ($A406 billion) was invested in LNG capital and operations in the 2010s.
The sector’s taxation profile is changing and companies which made these massive multibillion dollar investments into large, high-risk nation-building projects are now “paying substantial levels of corporate taxation” as their investments are recovered, Wood Mackenzie said.
The report, commissioned by the Australian Petroleum Production & Exploration Association (APPEA), said: “Wood Mackenzie estimates A$100 billion (US$76 billion) of remaining government take is due from these projects over the next two decades.”
The report added: “The current global energy crisis is likely to see higher commodity prices maintained over the coming years. As long as Australian LNG producers are able to meet targeted output levels at a low cost, significant short-term upside taxation should continue to directly flow through to the Australian Treasury and State governments.”
APPEA Chief Executive Samantha McCulloch said: “There is $100 billion from LNG projects heading for taxpayers in the next 20 years, helping fund policies and build roads, schools and hospitals.
“This is the extraordinary return Australians receive from the industry’s $400 billion investment – on top of the thousands of jobs along the supply chain this supports. Gas companies are among the biggest taxpayers in Australia.
“The sector is committed to ensuring domestic supply and our exports underpin our domestic energy security while delivering substantial benefits to Australians.”
The report comes after new forecasts last week showed Australia’s oil and gas industry is set to deliver $16.2 billion to governments this financial year – up from $6.4 billion previously – continuing to underpin critical spending on public services and infrastructure. LNG exporters are forecast to contribute over $15 billion of this industry total.
The $16.2 billion of taxation receipts could fund construction of around 11 new public hospitals, 160 new state-of-the-art schools or cover the annual healthcare for about 1.6 million Australians.
Read the report here.
Media Contact: Brad Thompson on 0401 839 227