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Thursday, 11 May 1989
Page: 2293

Senator SCHACHT —My question, directed to the Minister for Resources, follows a question about taxes on crude oil asked by Senator Lewis on Monday. Can the Minister tell the Senate how much excise the Fraser Government took from Bass Strait production compared with the amount extracted by this Government? What steps has the Government taken to meet the objections from oil companies that the tax is damaging the Australian oil exploration effort?

Senator COOK —Senator Lewis tried to score a cheap political point at the end of Question Time on Monday by accusing this Government of being an excessive taxer of the Australian oil industry to the extent that it curbs exploration and thus the finding of more oil to meet our opening self-sufficiency gap. I cannot answer in direct monetary terms what the Fraser Government took out of Bass Strait in the way of taxes compared with what we have taken because, since there is one producer, those figures are commercial in confidence figures. But what I can do is refer to a table which shows the percentages of take by the Fraser Government in the last five years of its period in office compared with what has been taken in five years under this Government. In that table we find that, on average, the Fraser Government took excise of 71 per cent of the gross value of sales out of Bass Strait compared with 60.4 per cent under our Government. In the year 1978-79, the Fraser Government took 63 per cent, the following year 72 per cent, the next year 74 per cent, in 1981-82 73 per cent, and in 1982-83 72 per cent. Indeed, in terms of oil excise, the Fraser Government was a very high taxing government. Under this Government, taxation on Bass Strait production has been, in 1983, 65 per cent, and in successive years 65 per cent, 58 per cent, 58 per cent and 56 per cent.

Not all of those figures, of course, are due to the level of excise. Under the old oil/new oil regime some of those figures show a disproportionate bias in favour of the Fraser years, it has to be said, because of the reliance on old oil production compared to new oil production. But there have been significant reductions in excise on Bass Strait production under this Government. We made a number of changes. The highest excise rate applying to old oil was reduced in 1986 from 87 per cent to 80 per cent. Further reductions will see this rate fall from the current level of 77 per cent to 75 per cent on 1 July this year. The Government also made the important concession that the first 30 million barrels of production from all onshore fields and new offshore fields where the resource rent tax regime does not apply will be excise free. Furthermore, there is an annual excise free production tranche of 8,000 barrels a day. Hence, no onshore oil producers pay excise, and that means that excise will not be paid on most new projects either.

I also indicate that the Government has, by its introduction of the resource rent tax, sorted out a number of the imperfections in the taxation system. Also, I have foreshadowed, in carrying out a promise given by Senator Gareth Evans when he was Minister for Resources and Energy, the bringing forward of the excise review. So I conclude that, on the figures, the Fraser Government, of which I understand Senator Lewis was a member, was the higher taxing government of the oil industry. Further, if one believes the argument of the oil industry-and the argument Senator Lewis tried to put in this chamber-that the level of taxes determines the amount of exploration, and if there is a curb on exploration in Australia, the Government of which Senator Lewis was a party was a major contributor to that curb.