Australian government and resource companies discuss proposed new super-profits tax

摘要

The Australian government met with industry players today to discuss the country’s controversial resource super-profits tax (RSPT).The government has proposed a 40% levy on onshore resource projects that will affect 70 large projects across the country including the planned coal-bed methane to LNG projects in Queensland state.The government claims that its share of resource profits has been falling from $1 in $3 to $1 in $7 as commodity prices have soared over the past decade and has launched a A$38 million (US$ 32 million) advertising campaign to win public support for the tax.Addressing the industry’s concerns, resource minister Martin Ferguson has indicated that the government is willing to negotiate on many aspects of the proposal. “We know you are concerned about things like retrospectivity, the treatment of minerals with different outlooks and cost structures, and taxing points," Ferguson said. "We are looking at ways your concerns can be addressed, for example, through generous transition arrangements."However the government seems unwilling to give any ground on the headline tax rate of 40%.Chairman of the mining industry's main lobby group, Ian Smith, said: "We are currently a long way apart. We are willing to sit down and engage constructively with government, but all key design elements must be on the table.”BG Group’s Queensland Curtis LNG, the Origin-ConocoPhillips Australia Pacific LNG, and the Santos/Petronas Gladstone LNG projects, all aiming to use the port of Gladstone, are three of the top four costliest projects in Australia. Shell and PetroChina are planning a fourth major project at Gladstone but their project remains further behind, with the first three targeting final investment decisions (FIDs) by the end of this year.The tax has opened a fierce debate in Australia with many companies, including Santos and Origin, warning it could delay their projects. Analysts have long speculated whether market conditions could support three large LNG projects in the same area taking FID around the same time and the proposed tax seems to have only added to that uncertainty.BG Group seems to be the most advanced of the three, having signed up buyers for all its volumes, and expects to take FID within the next few months once it receives environmental approvals. Last week Santos and Petronas became the first to be granted state environmental approval but the project is still searching for an additional buyer for LNG volumes as well as for a stake in the project.The tax is not due to come into force until 2012 and will need to pass over a series of hurdles in the Australian parliament before then. Australia will have a federal election later this year and opposition leader Tony Abbott has promised to overturn the tax if he wins. – JO’C