Two thirds of WA gas given away virtually free

Australia Institute

New research from The Australia Institute shows that virtually no tax or royalty is paid on two thirds of the gas exported from Western Australia.

Liquefied Natural Gas (LNG) worth $27 billion was exported from WA last year, while only $430m went to the State Government, just 1% of state budget revenue. Twice as much is raised from motor vehicle registration.

Key points:

  • No tax or royalties are paid on LNG produced by Woodside’s Pluto, Chevron’s Wheatstone or Shell’s Prelude projects that make up around two thirds of Western Australia’s LNG production.
  • Chevron’s Gorgon project paid at most $7m to the state in 2019-20, while the company’s revenues can reach $32m per day.
  • North West Shelf grants were $425m in 2020-21, just 1% of WA State Government revenue.
  • Oil and gas extraction employs less than 1% of the WA workforce.

“Oil and gas companies like Woodside and Chevron are being given this valuable and finite resource virtually for free, making huge profits from its sale, creating few jobs and returning almost nothing to everyday West Australians,” said Mark Ogge, Principal Adviser at The Australia Institute’s Climate & Energy Program.

“Ordinary people paying their car registration fees are contributing more to the WA budget than royalties from oil and gas companies – there’s no doubt West Australians are getting ripped off.

“If the paltry royalty arrangements that apply to the North West Shelf were applied to the rest of the WA LNG industry, an additional $1.6 billion would be raised each year. With more comprehensive reform, fairer royalty arrangements could gain far more revenue that would benefit all West Australians.

“If the WA government paid half as much attention to LNG royalties as it does to its share of the GST, the people of WA would benefit for generations to come.

“The WA Government and Opposition are too close to the oil and gas industry. Unfortunately, both accept political donations from industry, and both have been involved in virtually giving the resource away.”

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