Showing posts with label taxation. Show all posts
Showing posts with label taxation. Show all posts

Sunday, 20 August 2017

This isn't the first time Coalition MPs have lied about costings


“FEDERAL Opposition Leader Bill Shorten's populist "tax grabs" would cost Australians an eye-watering $150 billion over 10 years, the Federal Government will reveal today……Independent modelling by the Parliamentary Budget Office (PBO) and Treasury shows that under a Shorten government small business, mum and dad investors, older Australians and higher-income earners would be slapped with higher taxes.” [The Northern Star, 14 August 2017]

The Parliamentary Budget Office exposes the lie………


This is not the first time a Coalition MP has uttered political lies about costings. Tony Abbott, Joe Hockey and Andrew Robb became rather famous for it.

ABC News, 11 October 2010:

The Federal Government says the Coalition did not tell the truth before the last election when it claimed to have had its costings audited.
The Opposition did not submit its costings to Treasury before the election, but said they had been audited by a big accountancy firm.
Fairfax newspapers quote letters between the Liberal Party and the accountants saying the work would not constitute an audit in accordance with Australian standards.

And conservative politicians wonder why the general public perceives such a yawning credibility gap.

Thursday, 17 August 2017

The NSW Northern Rivers have been asking for a fair go for decades

                          
To be filed under The more thing change the more things stay the same……….

Saturday, 7 March 1931

Trove, retrieved 13 August 2017

Monday, 31 July 2017

Why doesn't the Turnbull Government do more to address domestic tax avoidance?


So why is it that the Turnbull Coalition Government, home to more than one millionaire, continues to allow a set of taxation rules which favour those with both wealth and high incomes over those with only average to low incomes and little to no wealth?


According to the Australian Taxation Office (ATO) – now underfunded, undermanned and demoralised – there is an issue with trusts being used for tax avoidance:

We focus on differences between distributable income of a trust and its net [taxable] income which provides opportunities for those receiving the economic benefit of trust distributions to avoid paying tax on them.

In other words; discretionary trusts are used by high-income earners to distribute investment income to beneficiaries on lower marginal tax rates, in the process reducing the overall amount of tax paid and current rules allow income to be diverted to other family members, such as stay-at-home mothers or fathers, or to dependents over the age of 18, such as children at university, college or Tafe.

Australian Finance Minister and Liberal Senator for Western Australia Mathias Cormann characterises proposals to alter taxation rates on trusts to minimise their use as tax avoidance vehicles as a “tax grab”. Well he would wouldn’t he, with so many political mates to defend.

As for collecting existing tax liabilities……

The ability to enforce payment obligations and pursue avoidance schemes has diminished since 2014 when first the Abbott Coalition Government and then later the Turnbull Coalition Government cut ATO staffing numbers.

The Community and Public Sector Union clearly told the Treasurer in 2017 that:

While the public is supportive of tackling corporate tax avoidance to raise revenue for public services, there are limits to what the ATO is able to do due to significant under resourcing. Despite a growing population and increased expectations from the community, ATO ongoing staffing levels have declined. Between 2013-14 and 2015-16, Average Staffing Levels at the ATO fell by over 4,000 or by nearly a quarter. The audit team, responsible for enforcing the tax compliance of individuals and multinational companies, was hit particularly hard by these job cuts. While there was an increase in the 2016-17 Budget, it has not reversed the significant cuts experienced over the last few years.

Given the need for more, not less revenue, these previous cuts seem illogical. According to information provided to Senate Estimates by senior ATO staff, the return on investment over the last decade would be between 1:1 and 6:1, or simply put every dollar invested in ATO staff generates between $1 and $6 in revenue.[1] Some had previously estimated that the cuts could lead to a loss of nearly $1 billion in revenue.[2]

This disconnect between public expectations that tax avoidance should be tackled and what the ATO can actually do must be addressed by the Government. It should commit to an increase in base funding and staffing for the ATO if it is serious about tackling corporate tax avoidance and increasing revenue.

It seems that while the Turnbull Government talks about an ideal egalitarian society where inequality no longer exists, behind the scenes it is nobbling one of the mechanism’s available to government to ensure that there is a level playing field for all those with only earned incomes as well as those with earned incomes plus accumulated wealth.                                      
So when Turnbull & Co announced in May this year that it intends introducing a strong Diverted Profits Tax and establishing a Tax Avoidance Taskforce in the Australian Taxation Office (ATO) one has to wonder if current staffing levels allow full investigation of multinationals operating in Australia or whether the taskforce (which has in fact existed since 2016) will be adequately resourced to look into multinational tax avoidance and the black economy as mooted.

One also has to wonder why in the face of widespread use of negative gearing of investment properties and capital gains tax arrangements to avoid paying an appropriate tax rate, the Turnbull Government also fails to reform the taxation system in these areas.

Oh, I forgot……………



NOTE

1. Table 1: 45th Parliament of the Commonwealth of Australia party representation

Source: Australian Electoral Commission (AEC), ‘2016 Federal Election Tally Room’

Friday, 14 July 2017

Top 100 fossil fuel companies produce nearly 1 trillion tonnes of global greenhouse gas emissions



All 100 fossil fuel companies in this study collectively accounted for “72% of global industrial GHG emissions”.

Coincidentally the fossil fuel and mining sectors are some of the most heavily government-subsidised sectors globally - as well as featuring prominantly in lists of multinational corporations paying little or no tax in the countries in which they operate.

Top 50 fossil fuel companies accounting for half of total global industrial GHG Emissions in 2015

Saudi Arabian Oil (Aramco)
Gazprom
National Iranian Oil
Coal India
Shenhua Group
Rosneft OAO
China National Petroleum Corp CNPC
ADNOC
ExxonMobil Corp
Petroleos Mexicanos (Pemex)
Royal Dutch Shell PLC
Sonatrach SPA
Kuwait Petroleum Corp
BP PLC
Qatar Petroleum Corp
Petroleos de Venezuela SA (PDVSA)
Peabody Energy Corp
Iraq National Oil Co
Petroleo Brasileiro SA (Petrobras)
Chevron Corp
Datong Coal Mine
Lukoil OAO
China National Coal
Petroliam Nasional Berhad (Petronas)
Nigerian National Petroleum Corp
Shanxi Coking Coal Group Co Ltd
BHP Billiton Ltd
Shandong Energy
Total SA
Glencore PLC
Shaanxi Coal Chemical Industry Group Co Ltd
Poland Coal
Yankuang
Statoil ASA
Arch Coal Inc
Eni SPA
ConocoPhillips
SUEK
Kazakhstan Coal
TurkmenGaz Sasol Ltd
Anglo American
Henan Coal Chem.
Jizhong Energy
Surgutneftegas OAO
Shanxi Jincheng
Sinopec
Kailuan
Bumi
CNOOC
Shanxi Lu’an

Here are 15 of the remaining 50 highest polluting fossil fuel companies

Russia (Coal)
Abu Dhabi National Oil Co
Rio Tinto
Alpha Natural Resources Inc
PT Pertamina
National Oil Corporation of Libya
Consol Energy Inc
Ukraine Coal
RWE AG
Oil & Natural Gas Corp Ltd
Repsol SA
Anadarko Petroleum Corp
Egyptian General Petroleum Corp
Petroleum Development Oman LLC
Czech Republic Coal

Friday, 23 June 2017

When Labor senators play petty politics and women literally pay the price


On 19 June 2017 The Greens Senator Larissa Waters moved an amendment to the Treasury Laws Amendment (GST Low Value Goods) Bill 2017.

This amendment sought to remove the Goods and Services Tax (GST) from sanitary products used by the vast majority of Australian women and girls during their reproductive years.

The Australian Parliament Senate Hansard recorded the fate of this proposed amendment of 19 June 2017 at Page 17:

The TEMPORARY CHAIR (Senator Leyonhjelm): The question is that amendments (1) to (4) on sheet 8153 be agreed to.
Question agreed to.
Senator WATERS (Queensland—Co-Deputy Leader of the Australian Greens) (11:52): I move amendment (1) on sheet 8156:
(1) Page 27 (after line 16), at the end of the Bill, add:
Schedule 2—Exemptions
A New Tax System (Goods and Services Tax) Act 1999 1 At the end of Subdivision 38-B
Add:
38-65 Sanitary products
A supply of *sanitary products is GST-free.
2 Section 195-1
Insert: sanitary products means tampons, sanitary pads, panty liners and similar items.
3 Application
The amendments made to the A New Tax System (Goods and Services Tax) Act 1999 by this Schedule apply in relation to supplies made on or after 1 July 2017
…………..

The CHAIR: The question is that amendment (1) on sheet 8156 as moved by Senator Waters be agreed to. The committee divided. [12:07] (The Chair—Senator Lines)

Ayes ......................15
Noes ......................33
Majority...................18

AYES
Di Natale, R
Gichuhi, LM
Griff, S
Hanson-Young, SC
Hinch, D
Kakoschke-Moore, S
Leyonhjelm, DE
Ludlam, S
McKim, NJ
Rhiannon, L
Rice, J
Siewert, R (teller)
Waters, LJ
Whish-Wilson, PS
Xenophon, N

NOES
Bernardi, C
Burston, B
Bushby, DC
Chisholm, A
Cormann, M
Dodson, P
Duniam, J
Farrell, D
Fawcett, DJ
Fierravanti-Wells, C
Gallagher, KR
Georgiou, P
Hanson, P
Hume, J
Ketter, CR
Kitching, K
Lines, S
McAllister, J (teller)
McCarthy, M
McGrath, J
McKenzie, B
Moore, CM
Nash, F
Payne, MA
Pratt, LC
Reynolds, L
Roberts, M
Ryan, SM
Sinodinos, A
Smith, D
Sterle, G
Watt, M
Williams, JR

Question negatived.
Bill, as amended, agreed to.
Bill reported with amendments; report adopted.

Noticeably absent for this particular vote were all 26 Labor senators.

The House of Representatives passed the Treasury Laws Amendment (GST Low Value Goods) Bill 2017 (with the four other Senate amendments agreed to) on 21 June 2017.

Females of all ages who still have their menses will continue to pay GST on the sanitary items necessary for their general health and wellbeing.

I'll remember to 'thank' those missing Labor senators at the ballot box, along with those senators who voted Senator Waters' amendment down.

In my case that means not voting for NSW senators Sam Dastyari, Jenny McAllistar, Deborah O'Neill and Doug Cameron (all Labor), along with Brian Burston (One Nation), Concetta Fierravanti-Wells, Fiona Nash, Marise Payne  and Arthur Sinodinos (Liberal) & John Williams (Nationals).

Saturday, 27 May 2017

Quotes of the Week


Why do so few make it out of poverty? I can tell you from experience it is not because some have more merit than others. It is because being poor is a high-risk gamble. The asymmetry of outcomes for the poor is so enormous because it is so expensive to be poor. Imagine losing a job because your phone was cut off, or blowing off an exam because you spent the day in the ER dealing with something that preventative care would have avoided completely. Something as simple as that can spark a spiral of adversity almost impossible to recover from. The reality is that when you’re poor, if you make one mistake, you’re done. Everything becomes a sudden-death gamble. [Christian H. Cooper writing at Nautilus on Why Poverty Is Like A Disease, 20 April 2017]

The total rate paid by a high earner on $200,000 is nothing like 50 per cent. The first $18,200 isn't taxed at all because of the tax-free threshold, the next $18,000 is only taxed at 19 per cent, and so on, meaning the total tax taken works out at $71,232 including levies – a rate of 35.6 per cent. [Economic Editor for The Age, Peter Martin, writing on 24 May 2017]

Monday, 22 May 2017

A gender lens on the 2017-18 Budget exposes its class-ridden, misogynistic bottom line


In 2014 the Abbott Government ceased the thirty year-old federal government practice of releasing a Women's Budget Statement.

The National Foundation for Australian Women stepped in to fill the gap since then and this month has released its 97-page review of the Turnbull Government’s 2017-18 Budget, Gender lens on the Budget.

This budget review contains little that is unequivocally positive for women and summarises the bad news thus:

Women are overrepresented at lower income levels. Changes to government benefits and increases in taxes have a disproportionate effect on women. ATO statistics recently released show the median income for women was $47,125 in 2014-15, while for men the amount was $61,711.
Effective marginal taxation rates (EMTRs) measure the proportion of each extra dollar of earnings that is lost to both income tax increases and decreases in government benefits (for example, Parenting Payment, Family Tax Benefit, the Age Pension etc).
The increase in the Medicare Levy will affect those on incomes greater than $21,644. For those with eligible children, FTB A payment rates are frozen for two years. Those who pay child care fees will continue to face high EMTRs. University graduates will start repaying loans when they reach income levels of $42,000 per year.
These changes hit those on earning well below the average wage, and are particularly harsh for women. Combined, these changes could lead to effective marginal tax rates of possibly 100% or higher for some women, particularly as Family Tax Benefit Part A begins to decrease at $51,903. Graduates caught between these policies will experience considerable financial stress; graduates earning $51,000, most of whom are likely to be women, will have less disposable income than someone earning $32,000. Changes to penalty rates may also have a significant impact on some graduates if they are extended to the aged and health care sectors as well as the childcare sector.
The point to note is not just the harsh effects on low income women but also that it is not discussed in the Budget papers, with no modelling of the exact EMTRs for different groups of women provided. The way to improve incomes for most women is not to cut taxes but through improved welfare, social investments and increased wages (for example, by taking real action against the spread of precarious low paid work or by opposing cuts to penalty rates). Tax cuts, particularly those for top income earners, lower revenue at a time when investment is needed in public services and social infrastructure. ATO statistics show that in 2013-14 only 17% of women had taxable incomes greater than $80,000. This tax reduction has led to an increase in gender inequality.
Welfare payments to the unemployed are a small part of total welfare outlays. However, as ACOSS points out, the 2014 demonising of recipients continues. Many groups argue for an increase in the value of the Newstart payment, and an increase in Commonwealth rent assistance. What we have instead is ineffectual drug testing, harsh compliance penalties and expanded income management. However, for sole parents there will be a new verification process that is especially demeaning.
There were no measures designed to specifically address gender inequality and the related entrenched financial vulnerability of women….
This Budget fails to address major challenges facing young women in Australia, and has no measures to improve financial, job or housing security for this cohort.
Youth unemployment is at 13.5% of the youth labour force, which is the highest rate in 40 years, and many young people are underemployed (18% of young people in the labour force) (Brotherhood of St Laurence, 2017, 3). Women aged 20-24 have a much higher rate of underemployment than men of the same age (Burgess, 2017). The job market is increasingly casualised and insecure, and as young people have little or no working experience they are more likely than other groups to work in nonpermanent jobs (Brotherhood of St Laurence, 2017, 4). There is nothing in this Budget to address the unemployment or underemployment that young people experience, and which have implications for the economic security of young women…..
The enhanced residency requirements for claimants of the Age Pension and the Disability Support Pension (DSP) from 1 July 2018 will require claimants to have 15 years of continuous Australian residence before being eligible to receive the Age Pension or DSP unless they have:
* 10 years’ continuous Australian residence, with five years of this residence being during their working life (16 years to Age Pension age); or
* 10 years’ continuous Australian residence, without having received an activity tested income support payment for a cumulative period of five years.
Approximately 40% of older Australians are born overseas and the majority of these are women (AIHW 2007, 4). Within CALD communities, as with the broader population, women are more likely to require age pension support because they have less superannuation (from lower paid jobs and from fewer years working). Women are therefore more vulnerable to economic insecurity and should not be punished in old age for being migrants or for not being able to meet the 5 cumulative years of no income support payments during the requisite 15 years’ continuous residency. CALD women are more likely to experience periods of income support due to their family care responsibilities and should not be punished for this.  [my yellow/red highlighting]

Has the Republican Party finally pushed the American people too far?


PRESS RELEASE 05/11/17
INVESTIGATORS FROM THE CRIMINAL INVESTIGATIONS DIVISION OF THE WEAKLEY COUNTY SHERIFF'S DEPARTMENT HAVE ARRESTED 35 YEAR OLD WENDI L. WRIGHT OF 4004 HUBERT HARRIS ROAD IN OBION COUNTY TENNESSEE AND CHARGED HER WITH FELONY RECKLESS ENDANGERMENT AFTER AN INCIDENT THAT TOOK PLACE IN WEAKLEY COUNTY ON MONDAY MAY 8TH 2017. DURING THAT TIME IT IS ALLEGED THAT WRIGHT FOLLOWED A VEHICLE OCCUPIED BY UNITED STATES CONGRESSMAN DAVID KUSTOFF AND HIS AIDE MARIANNE DUNAVANT WHILE THEY WERE GOING DOWN HIGHWAY 45 SOUTH OF MARTIN . THEY HAD BEEN AT A TOWN HALL MEETING ON THE CAMPUS OF THE UNIVERSITY OF TENNESSEE AT MARTIN. WRIGHT PLACED THE OCCUPANTS IN FEAR OF BEING FORCED OFF OF THE ROADWAY. THEY TURNED ONTO OLD TROY ROAD AND INTO A DRIVEWAY OF A PERSON THEY WERE FAMILIAR WITH. WRIGHT EXITED HER VEHICLE AND BEGAN SCREAMING AND STRIKING THE WINDOWS OF THEIR VEHICLE AND AT ONE POINT REACHED INSIDE THEIR VEHICLE. SHE THEN STOOD IN FRONT OF THEIR VEHICLE IN AN ATTEMPT TO KEEP THEM BLOCKED IN. A 911 CALL WAS PLACED DURING THIS TIME BUT WRIGHT LEFT THE AREA BEFORE DEPUTIES ARRIVED. WRIGHT WAS IDENTIFIED AFTER SHE POSTED DETAILS OF THE ENCOUNTER ON FACEBOOK. WRIGHT WAS LOCATED BY DEPUTIES FROM THE OBION COUNTY SHERIFF'S DEPARTMENT AND TAKEN INTO CUSTODY ON THE WEAKLEY COUNTY ARREST WARRANT. SHE HAS BEEN RELEASED AFTER POSTING A ONE THOUSAND DOLLAR BOND. WRIGHT WILL BE ARRAIGNED ON MONDAY MAY 15TH 2017 IN WEAKLEY COUNTY GENERAL SESSIONS COURT.
INVESTIGATOR CAPTAIN RANDALL MCGOWAN
WEAKLEY COUNTY SHERIFF'S DEPARTMENT


Screenshot from CNN Politics video
iOTW Report, 14 May 2017:

A man got physical with Republican North Dakota Rep. Kevin Cramer at a town hall meeting Thursday before being escorted out by police.
The man was yelling at Rep. Cramer, "Will the rich benefit from, if the health care is destroyed, do the rich get a tax break? Yes or no?" He then shoved cash into the congressman's collar, saying, "There you go, take it."
Cramer responded, "That's too far," and police escorted the man from the meeting.

Friday, 5 May 2017

Problems with tax collection from Australian resource and energy sector due to aggressive avoidance strategies


It would appear that successive federal and state governments have allowed the resource and energy sector to take Australia for everything except the gold fillings in its teeth……..

2 Office of the Chief Economist, Resources and Energy Quarterly, December 2016; Office of the Chief Economist, Resources and Energy Quarterly, December 2015; Office of the Chief Economist, Resources and Energy Quarterly, December 2014.
[Australian Taxation Office (ATO) 30 March 2017 submission to Senate Standing Committees on Economics, Inquiry into Corporate Tax Avoidance]

The Sydney Morning Herald, 29 April 2017:

Multinational gas companies will soon sell an annual $50 billion worth of Australian liquefied natural gas to foreign markets, but the nation will have to wait more than a decade for any revenue boost and some projects will never pay a cent in tax for the resources they extract.

A report prepared for the Turnbull government into the petroleum resource rent tax has confirmed fears, first revealed by Fairfax Media in 2015, that revenue from offshore gas will continue to flatline until at least 2027.

Despite that, Treasurer Scott Morrison insisted on Friday that Australians were not being shortchanged, but said the government would consider some changes to the system.

The review of the PRRT by former treasury official Mike Callaghan has acknowledged there are systemic problems and recommended changes to toughen the system for new LNG projects.

But, in a clear victory for the $200 billion industry, he shied away from urging any major changes for projects already past the investment stage, including Chevron's giant Gorgon and Wheatstone ventures and Shell's Prelude project.

The Callaghan report was released amid the political wrangling over east coast gas supply and on the same day the Senate inquiry into corporate tax avoidance grilled LNG bosses in Perth.

The Sydney Morning Herald, 26 April 2017:

Foreign-owned gas companies have legally avoided paying significant tax on billions in earnings from their Australian operations because of loopholes, according to a study. 

The loopholes have allowed the companies to write off interest payments for the borrowings of offshore subsidiaries, it has been claimed.

The study, by academic accountants at the University of Technology School of Accounting, and left-leaning campaign group GetUp, looked at the available balance sheet data of gas giants ExxonMobil and Chevron. It found the two companies have achieved colossal revenue flows from their Australian operations but paid little if anything in petroleum resource rent tax in recent years.

The practice is known as "debt loading" or "thin capitalisation".

Over the two years 2013-14 and 2014-15, Chevron earned more than $6.12 billion in revenue, but paid nothing in PRRT, according to the assessment.

It found ExxonMobil achieved revenue of almost three times that at $18.08 billion in the same period, but paid only $803.5 million.

The study concluded that between the operation of the company tax rules and the petroleum resource rent tax regime these enormous multinational resources companies can "load up" their balance sheets with excessive debt, thereby reducing taxable income to the point where the tax liability is low or non-existent.

The report, Investigation into the Petroleum Resource Rent Tax and Debt Loading in Australia – 2012 to 2016, found 95 per cent of oil and gas projects in Australia paid nothing in PRRT in 2014-15.

Australian Petroleum Production & Exploration Association (Appea) Ltd, Submission to the Review of Commonwealth Petroleum Resource Taxes, February 2017: 

APPEA does not consider a case exists for any changes to be made to the existing PRRT provisions.

Oil and gas corporation Santos Limited currently seeking to establish coal seam gas fields in NSW stated in a 3 February 2017 written submission to the current Senate inquiry into tax avoidance:

Santos has participated in a number of offshore and onshore oil and gas projects during the period of operation of PRRT, from 1 July 1986 (see attachment). Based on our experience with petroleum projects in which Santos has an interest it is our view that PRRT has operated as intended and that therefore the existing design features are appropriate…..
The declining revenues are a function of changes to the industry and currant commodity prices rather than changes or faults in the original design of PRRT.

Santos Limited with a total income of $3.38 billion in 2014-15 declared it had no taxable income in that financial year. The previous financial year its tax liability was $3.14 million on a declared taxable income of $27.34 million out of a total income before tax of $4.35 billion.


BACKGROUND

The Australian, 25 August 2012:

SOME of Australia's biggest oil and gas players expect to pay little or no additional tax on their multi-billion-dollar onshore energy projects, putting federal government hopes of billions of dollars of additional revenue in doubt.

The admissions by Woodside Petroleum, Santos and Origin Energy indicate the government is unlikely to receive any significant additional funds in the foreseeable future from the expanded petroleum resources rent tax.

Parliament of Australia, Corporate Tax Avoidance:

On 2 October 2014 the Senate referred an inquiry into corporate tax avoidance to the Senate Economics References Committee for inquiry and report by the first sitting day in June 2015.

On 15 June 2015, the Senate granted an extension to the committee to report by 13 August 2015. On 12 August 2015, the Senate granted an extension to the committee to report by 30 November 2015. On 23 November 2015, the Committee was granted an extension to report by 26 February 2016. On 22 February 2016, the committee was granted an extension to report on 22 April 2016.

On 2 May 2016, the Senate granted the committee a further extension to report by 30 September 2016.  

The inquiry lapsed at the end of the 44th Parliament.

On 11 October 2016, the Senate agreed to the committee's recommendation that this inquiry be re-adopted in the 45th Parliament. The committee is to report by 30 September 2017……

On 1 December 2016, the committee resolved to broaden the scope of the inquiry to include Australia's offshore oil and gas industry.
The committee has asked to receive submissions on the treatment and/or payment of:
i. royalties;
ii. the Petroleum Resource Rent Tax (PRRT);
iii. deductions; and
iv. other taxes
by corporations involved in Australia's offshore oil and gas industry, including matters relating to the collection of these moneys by government.

University Of Technology Sydney, Ross McClure et al, Analysis of Tax Avoidance Strategies of Top Foreign Multinationals Operating in Australia: An Expose, 19 April 2016:

Multinational corporations are in a unique position to engage in tax aggressive strategies, as they are generally large in size and highly profitable, they exhibit low levels of debt in their capital structure, and have operations across national borders that generate foreign income streams. The overall group is made up of multiple entities across a number of tax jurisdictions and most multinational corporations have at least one subsidiary in a tax haven.

These characteristics have been associated with tax shelter activity in the U.S. (Wilson 2009) and with aggressive tax planning strategies such as abusive transfer pricing in Australia (Richardson et al. 2012). The information technology, pharmaceutical and energy sectors are both dominated by large multinational corporations and provide strong mechanisms that allow these corporations to divert profits away from where value and profits are created in order to reduce their tax liabilities.

News.com.au, 17 March 2017:

Gas on the east coast of Australia is controlled by a handful of companies and the lack of competition means they can charge higher prices locally.

At the moment, supply is controlled by six companies: Santos, Exxon, BHP, Origin, Arrow Energy and Shell. Some of these companies also control pipelines used to transport gas around the country, also adding to inflated prices……

He [energy analyst Bruce Robertson] said the global glut of gas, which is predicted to continue until 2030, has also put more pressure on companies to make money domestically.

The more they restrict supply locally, the more money they make.

It’s created the bizarre situation that sees Australian gas being sold in Japan for a wholesale price that is cheaper than the price it’s available for in Australia.

Santos, Shell and Origin Energy have to stick to long-term contracts they signed with Japan amid a global glut, but the lack of competition in Australia means they can restrict supply locally and drive up prices.

Australians are now paying a price higher than the international price for gas.

There’s even talk about Australia importing its own gas back because this would be cheaper.

Australia is also not profiting as much as we could from selling our gas overseas.

Japan reportedly puts a tax on the gas it imports from Australia, which will deliver it $2.9 billion over the next four years.

In comparison, Australia will not receive any money from its petroleum resource rent tax from gas projects over the same period. We get $0 in tax from selling our gas overseas.

Most of the $800 million we do get from the tax every year comes from established oil operations in the Bass Strait, rather than from LNG producers.

Monday, 1 May 2017

Left unchecked the gas & coal mining sectors will be the death of the Great Artesian Basin and what is left of the Great Barrier Reef


According to an August 2016 Report Commissioned By The Australian Government And Great Artesian Basin Jurisdictions Based On Advice From The Great Artesian Basin Coordinating Committee the Great Artesian Basin (GAB) is one of the largest underground freshwater reservoirs in the world. It underlies approximately 22% of Australia – occupying an area of over 1.7 million square kilometres beneath arid and semi-arid parts of Queensland, New South Wales, South Australia and the Northern Territory. Approximately 70% of the GAB lies within Queensland…..

The first people to make use of GAB water were Indigenous tribes for whom it was critical to survival. Indeed, there is evidence that the GAB sustained Aboriginal people for thousands of years prior to European settlement.

The natural springs of the GAB provided a critical source of fresh water, and supported valuable food sources including birds, mammals, reptiles, crustaceans and insects, creating an abundant hunting ground for local tribes. The plants and trees around the artesian springs were used for food, medicine, materials and shelter.

The springs provided semi-permanent oases in the desert and supported trade and travel routes which evolved around them. The springs also played a key part in the spiritual and cultural beliefs of Aboriginal people. Ceremonies and other events were held at spring wetland areas which remain precious cultural and sacred sites. Numerous Creation stories feature a connection to groundwater.

This underground freshwater reservoir holds 65,000 million megalitres much of which fell as rain 1 to 2 million years ago, but not all of this water is in accessible layers.

For assessment purposes the GAB is divided into four regions – Carpentaria, Central Eromanga, Western Eromanga and the Surat Basin.

In 1878 the first bore was sunk to draw water from the Great Artesian Basin.

In modern Australia its economic values are shared by towns, agriculture, cattle & sheep grazing and industry/mining across the four basin regions.

The Courier map based on a 22 August 2016 report
                                                                                                                                              
The report points out that Water has historically been extracted from the GAB at a greater rate than recharge and this creates a problem for 21st Century Australia.

Professor of Environmental Sciences Derek Eamus, University of Technology, 18 June 2015:

As the pressure in the GAB has declined and the water table drops, mound springs (where groundwater is pushed to the ground surface under pressure) have begun to dry up in South Australia and Queensland. Associated paperbark swamps and wetlands are also being lost and it gets more and more expensive to extract the groundwater for irrigation and other commercial applications.

On average, rates of groundwater extraction across Australia has increased by about 100 per cent between the early 1980s and the early 2000s, reflecting both the increased population size and commercial usage of groundwater stores.

Despite the strain on water resources, the gas and coal mining industries are allowed virtually unlimited water extraction from within the Great Artesian Basin and where the few limits are placed on extraction it is poorly policed by government agencies.

This is a graph of coal seam gas, conventional gas and petroleum industry water use 1995-2015:

Source:.DNRM 2016, p. 62.

The Adani Group’s most recent water licence for the Carmichael coal project issued in April 2017 allows it to take a virtually unlimited volume of groundwater each year for the next 60 years, plus surface water – with minimum oversight.

The Environmental Defender’s Office (Qld) states that: It is expected that Adani may require up to 9.5 billion litres of groundwater every year for the Carmichael project.

Poor management by Adani of its Abbot’s Point coal waste has already led to a smothering of the vibrant, nationally important Caley Wetlands with run-off via its estuarine system expected to reach adjacent waters of the Great Barrier Reef World Heritage Area.

Satellite image of Caley Wetlands after emergency water release by Adani - now covered in coal waste.
A picture of the Abbot Point coal loading facility showing coal water run-off moving north-west into the wetlands and coal dust on the beaches. The Age, 12 April 2017, Photo: Dean Sewell
Coal dust on the beaches next to the Abbot Point coal loading facility  Photo: Dean Sewell/Oculi


On 10 March 2015 ABC News reported:

Hundreds of square kilometres of prime agricultural land in southeast Queensland are at risk from a cocktail of toxic chemicals and explosive gases, according to a secret State Government report.

A study commissioned by Queensland's environment department says an experimental plant operated by mining company Linc Energy at Chinchilla, west of Brisbane, is to blame and has already caused "irreversible" damage to strategic cropping land.

The department, which has launched a $6.5 million criminal prosecution of the company, alleges Linc is responsible for "gross interference" to the health and wellbeing of former workers at the plant as well as "serious environmental harm".

The 335-page experts' report, obtained by the ABC, has been disclosed to Linc but not to landholders.

It says gases released by Linc's activities at its underground coal gasification plant at Hopeland have caused the permanent acidification of the soil near the site.

Experts also found concentrations of hydrogen in the soil at explosive levels and abnormal amounts of methane, which they say is being artificially generated underground, over a wide area.

The region is a fertile part of the Western Darling Downs and is used to grow wheat, barley and cotton and for cattle grazing, with some organic producers.

Other documents, released to the ABC by the magistrate in charge of the criminal case, show four departmental investigators were hospitalised with suspected gas poisoning during soil testing at the site in March.

"My nausea lasted for several hours. I was also informed by the treating doctor that my blood tests showed elevated carbon monoxide levels (above what was normal)," one of the investigators said.

High levels of cancer-causing benzene were detected at the site afterwards.

On 9 February 2017 ABC News was still reporting on the contamination:

Flammable levels of hydrogen have been found at a number of locations near the site of a controversial gas project that has been blamed for contaminating huge swathes of prime Queensland farm land.

The ABC understands an ongoing Environment Department investigation has confirmed that the contamination is much more widespread than previously thought.

The Queensland Government has dispatched Environment Department officers to the Hopeland community, near Chinchilla in the state's south, and is setting up a call centre to help explain the situation to landholders…..

Due to fears about possible hydrogen explosions, the Government has been enforcing a 314-square kilometre "excavation caution zone" around the Linc plant, with landholders banned from digging any hole deeper than two metres.

The ABC understands further investigation by the Environment Department has now found flammable levels of hydrogen at locations outside the current caution zone.

The hydrogen has been detected underground and the department says it dissipates quickly in the open air.

Government sources have stressed the gas is not of an explosive concentration but landholders will be encouraged to exercise caution.

Left unchecked the mining industry will bring the Great Artesian Basin closer to collapse.

It is not as if either federal or state governments ever fully realise the supposed financial gains allowing this environmental degradation was supposed to bring to their treasuries.

In 2007-08 the Australian Taxation Office released taxation data which showed that 68.8 per cent of all mining companies on its books paid no tax in that financial year. In 2009-10 the percentage of mining companies paying no tax had risen to 73.1 per cent and in in 2010-11 the percentage of mining companies paying no tax was 72.2 per cent. By 2013-14 a total of 60 per cent of publicly listed energy and resources companies did not pay tax and again in 2014-15 60 per cent of all energy and resources companies paid no tax.

Add to this the fact that Adani in Australia in estimated to have paid only 0.008 percent in tax on their total income in 2014-2015 and is structured in such a way that its tax burden is artificially lowered and a significant proportion of its profits move offshore to the Cayman Islands tax haven.

It isn’t hard to see a pattern developing here.

Maximum environmental, cultural, social and economic risk for Australia with minimal financial return on risk.