One Nation Proposes Replacing Offshore Gas Tax With 30 Percent Equity Stakes

One Nation leader Pauline Hanson announced a policy to replace the offshore gas profits tax with a royalty system and government equity stakes in new projects. She presented the plan during a speech to a gas industry conference in Adelaide on Thursday.

Hanson said the public is unhappy with current returns from the oil and gas sector. She described the petroleum resource rent tax as a failure and proposed replacing it with royalties for new projects. The plan includes a 30 percent rebate on exploration costs in exchange for up to 30 percent government ownership.

The government stake would be managed by a new commonwealth investment body. Profits would go into a sovereign wealth fund. One Nation said the arrangement would give taxpayers a share of future earnings while exposing them to financial risks that could last decades.

The proposal would begin at the exploration stage and continue until decommissioning. It typically takes more than ten years for a project to move from exploration to production.

Frontbencher James Paterson said the idea was borrowed from Venezuela. He acknowledged Australians want better returns from resources but rejected nationalization of the industry. Australian Energy Producers defended the current tax system and said it already delivers more revenue when prices are high.

The Minerals Council of Australia opposed equity stakes in a mature industry. Resources Minister Madeleine King said the time for government investment in gas was 30 or 40 years ago. Opposition leader Angus Taylor reaffirmed the Coalition's opposition to a 25 percent export tax.