Greens demand $5.6bn tax boost

The Greens are demanding Labor overhaul its shake-up of the petroleum resource rent tax to raise an extra $5.6bn over the decade.

Greens senator Nick McKim.

The Greens want to double the revenue from Labor’s shake-up of the petroleum resource rent tax and raise an extra $5.6bn from LNG producers over the decade or they will vote against the government’s legislation in the Senate.

In an ultimatum sent to Treasurer Jim Chalmers on Monday, Greens economic justice and treasury spokesman Nick McKim said the minor party would be forced to reject the government’s PRRT changes, which the budget forecast would raise an extra $2.4bn over five years.

The stance from the minor party expands the political conflict between Labor and the Greens in the Senate after Prime Minister Anthony Albanese threatened a double-dissolution election over the failure to pass his $10bn affordable housing package.

“We will not support the government’s PRRT changes as ­currently presented,” Senator McKim wrote. “That gas companies will contribute so little, while so many in the country are enduring a cost-of-living crisis represents an unacceptable missed opportunity.”

Labor has proposed to tighten the tax rules for LNG producers and accepted a proposal from Treasury to limit the proportion of PRRT assessable income that can be offset by deductions to 90 per cent.

But Senator McKim said the Greens wanted the cap to be set at 80 per cent, and argued this position was also supported by independent senator David Pocock along with Jacqui Lambie and Tammy Tyrrell.

He attached Parliamentary Budget Office costings showing that an 80 per cent cap would improve the budget bottom line by $2.6bn over the forward estimates and $5.6bn over the decade.

Senator McKim said the proposal would “double the proposed additional revenue from gas companies” and warned this was just a starting point for the Greens.

“In putting forward this offer, the Australian Greens do not concede that this should be the end of tax changes to secure more revenue from the LNG industry that is a primary cause of the climate crisis,” he said.

Five offshore LNG projects – Gorgon, Ichthys, Wheatstone, Pluto and Prelude – would be captured by the changes, according to the PBO.

The Greens’ move casts fresh doubt on the future of the government’s PRRT legislation, with the Coalition stopping short of offering its full support.

In May, Peter Dutton said the Coalition could support the shake-up if it was accompanied by other measures aimed at reducing red tape and approval timelines for gas ­projects. The Opposition Leader said he was happy to “engage constructively” because the gas industry didn’t want the government doing a deal with the Greens.

However, opposition resources spokeswoman Susan McDonald said on Monday that “more tax on fewer projects will be a Pyrrhic victory for Labor”.

Greens leader Adam Bandt said the ball was “now in the government’s court”.

“They can work with the Coalition to weaken environmental protections to fast track gas projects or they can get this legislation through with the Greens and crossbench if they increase their minuscule tax take,” he said.

Resources Minister Madeleine King told Sky on Monday that the proposal to limit deductible expenditure to the value of 90 per cent of PRRT assessable receipts “gets more revenue in more quickly”.