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Friday, 6 December 1985
Page: 3121

Senator COOK(9.33) —The Senate is debating the Petroleum Revenue Bill 1985 and the Excise Tariff Amendment Bill (No. 2) 1985. Listening to Senator Durack say that the Opposition is not opposing this legislation reminds me that after the election of 1974 Billy Snedden, the then Leader of the Opposition, described the outcome as one in which the Opposition did not lose the election-it was just that it did not win it. It seems to me that that type of thinking is being applied in respect of the Petroleum Revenue Bill. Although the Opposition is not opposing the Bill, it has not gone quite as far as saying that it actually supports it. One cannot be sure whether in fact Senator Durack's supporting argument to the head statement that the Opposition is not opposing the legislation was in fact opposition in support. Senator Durack's speech was certainly an excursion into a wide ranging area of Opposition concerns about tax. However, he did not seem to say very much about the legislation.

Senator Durack —The legislation is all about tax.

Senator COOK —Yes, but the honourable senator talked about the tax package and what this Government is doing. He said that at last the Government had the courage to address the major taxing problems of this nation. However, he did so in such a confused way that I do not think anyone listening to the debate quite understood what the point of his opposition was.

Senator Robertson —That's not unusual.

Senator COOK —No, it is not unusual. This legislation seeks to replace crude oil excise levies and to rationalise the present taxing regimes with a resource rental royalty. It is proposed that a tax based on an oil resource rental tax will replace the ad valorem tax that applies at present. This legislation, which recognises Western Australian legislation, has been jointly worked out between the Commonwealth and the State of Western Australia. West Australian Petroleum Pty Ltd, or Wapet, which operates at Barrow Island in the north-west of Western Australia, is party to, agrees with and supports this legislation. So it is legislation that has consensus support. It is also legislation which fits into the mosaic of this Government's approach to the proper taxing policies with respect to resource development in the petroleum area.

When debating matters of this sort, I always like to point out that the petroleum resources of the nation are the property of the people held in trust by the Government which gives licence to develop by private companies. Therefore, it is proper that there be a payment of royalty or tax which rewards the public purse in some way when the exploitation of those resources is undertaken. On this occasion, what we have done is merely rationalise the existing structure. It is the on-land application, if you like, of resource rent tax and that tax applies above a threshold which is calculated by taking the long term bond rate, adding 15 per cent and then taxing anything above that at the rate of 40 per cent. While in some sense the actual details of the application fo resource rental tax are still to be refined, in this case that is the formula that will be followed.

This legislation also sits easily and compatibly with this Government's cash bidding legislation. Now we have legislation covering the letting out of off-shore exploration leases, legislation has been announced and is in prospect for resource rental tax, and we have the resource rental royalties regime as well, and that brings all those items together.

Given that Senator Durack has taken a long time in speaking in this debate, although his Party supports the legislation, it remains for me to say only that it is a commendable initiative of the Western Australian Government and of the Western Australian Minister for Minerals and Energy, Mr David Parker, in working with the Commonwealth to bring this legislation to this point.

Senator Gareth Evans —It is a triumph for co-operative federalism.

Senator COOK —Yes, it is a triumph for co-operative federalism, as the Minister says. It stands as a model, which, I believe, other States will eventually follow so that, even within the federal system in Australia, we will have a completely rational way of dealing with taxes on petroleum production. Commendation of the Western Australia Government's approach, and particularly of the Minister, David Parker, in its discussions with the Commonwealth should be noted.

Senator Durack, in his remarks, said that the return to the State is estimated to be in the order of $20m. He came perilously close to criticising that gain for Western Australia. Of course, he did not do it finally. Senator Durack's constituency being Western Australia may have hindered his making the criticism that some of his colleagues from the House of Representatives made of that type of gain to the State. It reflects well on the Government of Western Australia that it has taken this initiative. The outcome will be beneficial. It will help the State Government and it will bring on at Barrow Island more productively a resource which is awaiting this legislation going through to be further exploited. I commend the legislation to the Senate.