Dutton offers to help pass gas tax but winter break likely to come first

Peter Dutton has again offered to help pass Labor’s proposed $2.4bn tax on gas from July 1 in exchange for cuts in red tape, but the laws will not be debated before parliament rises this week.

Opposition Leader Peter Dutton. Picture: NCA NewsWire/Martin Ollman

Peter Dutton has again offered to help pass Labor’s proposed $2.4bn tax on gas from July 1 in exchange for cuts in red tape, but the new laws will not be debated before the parliament rises for the winter break this week.

In the May budget Jim Chalmers proposed a 90 per cent cap on the use of deductions that can be offset under the Petroleum Resources Rent Tax from July 1, which will bring forward more revenue from the nation’s offshore gas projects sooner.

The measure is estimated to raise $2.4bn over four years.

The government cannot pass the legislation without Coalition or Greens support, and the Greens are demanding far more be gathered from the gas industry, meaning the Coalition can pass the new tax at a lower level than demanded by the balance-of-power party in the Senate.

But The Australian understands the draft Bill will not be presented to the parliament until well into the second half of the parliamentary year and is not likely to be passed into law before the first half of 2024.

The Opposition Leader said at the weekend Australia needed to make industries and resources sectors “thrive all the more”.

“Let’s not forget, it’s the royalty and revenue contributions of our resource sector which helps pay for schools, roads, hospitals, aged care facilities, housing, infrastructure, social services and more besides,” he said.

“By breaking many of the chains of regulation and removing the whips of taxation, we can empower hardworking Australians to pursue their ambitions – because they will have more freedom, more choice and fewer financial burdens.”

While there are differences within the Coalition and the gas industry as to whether the Coalition should support the “lesser of two evils”, Mr Dutton said Coalition support could mean gains in other areas of resource management and a lower tax than the Greens would demand.

“I’ve sought to work constructively with the government on the ... tax,” he said. “Yes, I’m concerned about the effects of such a tax on foreign investment.

“But this tax could be far worse if Labor negotiates with the Greens.”

The Treasurer has previously called on Mr Dutton to pass the new tax “on its merits”. The deductions cap can start in July without legislation passing parliament because PRRT annual returns are not lodged until after the end of the income year.