Is Australia ‘giving away’ its natural resources?

Speaking on ABC’s Q&A on Monday night (August 12), Nobel Prize-winning economist Joseph Stiglitz claimed Australia was “giving away its natural resources”, something he found “mind-boggling”.

He said that if Australia made the fossil fuel industry pay for the value of the resources it extracts and its fair share of taxes, “you wouldn’t have the problems that you have today.”

Stiglitz appeared to be referring to our profits-based petroleum resource rent tax, also known as the “gas tax.”

Having formally researched and advised specialist forums on this issue for many years, I agree with him that yes – we are giving away our wealth, both to foreign countries and companies owned overseas.

It’s great to see an international heavyweight like Stiglitz pointing out some of the glaring issues with our system. To fix it, the federal government needs to get rid of its profit-based offshore gas tax altogether and revert to the royalties-based system we used to have.

Australia’s petroleum resource rent tax, or gas tax, is a secondary taxation on offshore gas resources. It’s a tax on profits, that is to say, it’s only collected when gas companies’ incomes exceed their expenditures.

Australia now consistently ranks among the top liquefied natural gas exporters in the world. But our tax take from the industry has long been too low.

So low, in fact, it triggered a federal government review in 2017. Former treasury official Michael Callaghan headed up the review as an independent expert.

I recall being quizzed by Callaghan in early 2017 at my Monash office in Melbourne over my submission to the review, which advocated for major reform of existing gas tax concessions.

But at the same time in Canberra, gas industry executives were lobbying