Court rules Palaszczuk Government’s gas agreement invalid

A deal struck by former treasurer Curtis Pitt could now cost Queensland Treasury coffers hundreds of millions of dollars, blowing a black hole in the State Budget just two weeks before it is due to be unveiled.

A NEW black hole has been blown in the State Budget just two weeks before it is due to be unveiled following revelations the Palaszczuk Government bungled a lucrative LNG royalties deal.

Hundreds of millions of dollars from ill-gotten royalty gains may have to be repaid and forecast revenue revised after the Supreme Court found the Government guilty of an unlawful cash-grab.

The legal challenge was successfully mounted by Australia Pacific LNG Consortium, which includes corporate behemoths Origin Energy and ConocoPhillips, but may spread to the confidential royalty deals of other gas producers.

In a decision released on Monday night, Justice John Bond found former treasurer Curtis Pitt had wrongly considered the revenue implications when deciding on the royalty scheme to be applied to APLNG.

Justice Bond said former under treasurer Jim Murphy had asked the Office of State Revenue to model how much extra revenue its preferred royalty model would reap.

OSR advised up to $232 million could be gained from the APLNG project over the first three years but warned considering such implications could render the royalty regime invalid.

“In making your decision there is the potential risk of administrative law error,” the OSR report said.

“In particular, the royalty revenue outcomes for the State from application of a particular valuation method is not a relevant consideration and should not be taken into account in making your decision.’’

Newly elected Queensland Parliament Speaker Curtis Pitt (right) is hugged by Deputy Premier Jackie Trad after swearing in on the opening day of the 56th Queensland Parliament in Brisbane, Tuesday, February 13, 2018. (AAP Image/Dan Peled) NO ARCHIVING

Justice Bond said by seeking and being provided advice from OSR on the revenue implications, the Government could not argue the findings did not influence its decision.

Opposition Leader Deb Frecklington said the blunder could leave Queenslanders hundreds of millions of dollars out of pocket.

“The reckless mistake has exposed taxpayers to a claim of more than $200 million,” she said. “Annastacia Palaszczuk needs to immediately provide certainty and settle this dispute.”

The court decision comes ahead of the June 11 Budget which has already been rocked by falling stamp duty revenue, a string of unallocated spending and the loss of significant funding promised by Federal Labor.

Treasury is still calculating the potential costs and potential impacts on forecast revenue as it seeks to strike a new deal with APLNG.

Curtis Pitt outside the old Bunnings Warehouse, which he reckons should be converted into a state-of-the-art sound stage for films. PICTURE: STEWART MCLEAN

“The Treasurer is still considering and obtaining advice on the decision,” a Treasury statement said. “It is not appropriate to comment further at this time.”

Originally published as Court rules Palaszczuk Government’s gas agreement invalid