Reporting in Boiling Cold confirms the Australian and Western Australian governments will hand back almost half of the royalties collected from the Chevron-operated Barrow Island joint venture oil facility in WA.
The deal between Chevron and the Australian and WA governments means taxpayers will pay Chevron and its joint venture partners, Santos and Exxon, at least $500 million.
That is about half the $1 billion in royalties the companies paid over the 40-year life of the project.
The money will be paid to the companies to clean up the shocking environmental degradation they have caused to Barrow Island, the second largest island of the WA coast and formerly one of the state's most pristine and important nature reserves, now classified by the Western Australian Government as a "contamination site".
While the WA government charges some royalties for the oil extracted from Barrow Island, the Australian Government gives Chevron, Exxon and Santos all the offshore gas they export for free.
Also, none of these companies has ever paid Petroleum Resource Rent Tax (PRRT) on the vast amount of gas they export, and all frequently fail to pay corporate tax.
This adds to the massive giveaway of Australia's oil and resources to a handful of mostly foreign-owned oil and gas corporations, which export 80% of gas produced in Australia. This includes:
- The Australian Government gives them most of this gas (56%) royalty-free, including 73% of gas exported from Western Australia.
- No gas export project has ever paid PRRT, despite the tax being designed specifically to provide a return to Australians for the exploitation of our oil and gas resources and having been in place for forty years.
- The gas export projects in Queensland have never paid corporate tax on over $100 billion of income from exporting Australian gas from Queensland.
"Today's reporting reveals the extraordinary scale of the mismanagement of Australia's gas resources by our governments. It is even worse than previously thought," said Mark Ogge, Principal Advisor at The Australia Institute.
"Not only have our governments been giving our resources away for free and failing to tax these foreign-owned corporations properly, but they are also handing back much of the meagre royalties they have collected.
"Chevron has transformed Barrow Island from a pristine Class A nature reserve to a contamination site. They are trashing Australia's environment, and taxpayers are footing the bill.
"This is entirely the responsibility of the Australian and WA governments. They had forty years to fix this terrible deal, but they have chosen not to. They need to be held to account.
"Ordinary Australians pay their taxes every day of the year. If ordinary Australians caused a tiny fraction of the environmental damage these companies are causing, we would suffer severe consequences, not get a tax refund. This is just more special treatment for the oil and gas industry at the expense of ordinary Australians.
"Australian governments are allowing foreign-owned oil and gas corporations to rip Australians off. Big Gas is taking the piss and our governments are letting them.
"The Australia Institute is calling for an urgent inquiry into the mismanagement of Australia's gas resources."
