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Wednesday, 24 May 1989
Page: 2574

Senator DEVEREUX —My question is directed to the Minister for Resources. Did the Minister, in a speech to the annual conference of the Australian Petroleum Exploration Association (APEA) in April this year, signal that the Federal Government would conduct a wide ranging review of crude oil excise to be completed by mid-1990? Has the Minister released details of the terms of reference, the timetable and procedures for the review?

Senator COOK —It is true that in April of this year, at the Australian Petroleum Exploration Association annual conference in Hobart, I announced that I would bring forward the review on crude oil excise foreshadowed in 1987 by the then Minister for Resources and Energy, Senator Gareth Evans, and that we would commence the review in September this year rather than in June 1990. I now announce that we will commence the review in June this year, so we are bringing it forward even further, and will conclude, we expect, any application of the results of the review in June 1990.

The primary focus of the review will be on crude oil and liquefied petroleum gas excise in Bass Strait, the North West Shelf and onshore production areas and offshore royalty arrangements. The review will be based on a fundamental analysis of the prin- ciples of resource taxation, including questions of equity, efficiency and the impact of taxation on the community and the industry. The review will be undertaken by a task force from the Department of Primary Industries and Energy in consultation with other departments, drawing on the Australian Bureau of Agricultural and Resource Economics for independent contributions on economic analysis and on the Bureau of Mineral Resources for independent technical advice. I table the terms of reference of the review. At the same conference of the APEA, Senator Chaney, on behalf of the Opposition, delivered a speech in which he dealt with excise. It is impossible to understand from the written text of that speech the attitude of the Opposition on excise. Senator Chaney said:

I welcome the emphasis you are now putting on the argument that oil should be taxed similarly to other extractive industries.

I am not sure what that means. He continued:

That appears to me to be a desirable long-term goal and it is reflected in the Resources and Energy policy which the Opposition put down before the last election which provided for royalty arrangements in lieu of secondary taxation for future discoveries of oil.

To refer to royalty arrangements in lieu of secondary taxation is like saying that all imports come from overseas, because royalty arrangements are secondary taxation. Maybe that is the sort of promise that Senator Chaney gave to John Howard prior to his removal as Leader of the Opposition. A number of people from the industry have asked me for the meaning of the Opposition's promise. I am unable to inform them because it is in fact a contradictory promise. In my discussions on the meaning of the so-called contradictory promise `royalty in lieu of secondary taxation', somebody said to me, `There are two things about Senator Chaney I object to-his face'.