Speakers: ABC Afternoon Briefing, Host Patricia Karvelas; Business Council of Australia Chief Executive Bran Black
Topics: Senate Select Committee on the Taxation of Gas Resources, NDIS reforms
E&OE
Patricia Karvelas, Host: Bran Black, welcome to the program.
Bran Black, Chief Executive: Thank you so much for having me.
Patricia: Has the gas industry lost its social licence?
Bran: Well, I think it’s such a challenging issue that we’re dealing with at the moment. What we really need to remember is that front of mind, we must have the long-term interests of the country, and what is absolutely clear is that we are facing supply shortfalls on both the east and the west coast in Australia.
To address those supply shortfalls, we need more supply, and to get that, we need more investment. So from our perspective, we see that we need to make sure that we don’t change our settings, that we don’t make our settings less attractive, because that will reduce our capacity to generate the supply that we need, and frankly, also to provide greater economic opportunity at a time where we need to drive productivity growth.
Patricia: Yesterday, the committee heard from Richard Denniss that we would get cheaper gas and more supply in Australia for our domestic users here, because there would be an incentive if there was this export tax for it to be sold by gas companies here. Do you agree with that thesis?
Bran: Well, no, I don’t, and I think what we need to do here is balance up. And indeed, it’s not so much a balance, but it’s a case of trying to deliver on two different objectives simultaneously. The one is making sure that we can reduce and put downward pressure on prices.
We can do that through the reservation work that’s underway. We’ve been engaged in that regard, and we welcome the opportunity to contribute to that government process. We think a prospective gas reservation policy is a good thing.
On the other hand, we know that we also need more supply, as I mentioned before, and if we change our settings, if we undermine the bases on which investments were made by large companies, then they are more likely to take their capital and invest it elsewhere.
Patricia: So there’s no room even for a compromise on tax. You might not like the rate being raised, but why not have some kind of tax, even if it’s more modest?
Bran: I think one of the challenges is that we’re starting off pretty low base. So the BCA did its own analysis in this regard just this year, and it took us the better part of a year to compile this report. But what it showed is that relative to 41 other competitor nations, we rank just 21 for investment competitiveness, but on settings like tax and like our regulatory settings, we’re 37th and 38th of 42.
We’re coming off a really low base as it is. So our very strong submission, our strong argument is that this is the worst time that we could be looking at making our settings even less competitive that will drive investment from our shores. And that’s not just empty language we’ve seen in the UK, where they’ve made recent changes to their tax settings, that in 2025 for the first time in 59 years, there were no new applications for wells. This then shows that we’re dealing with real consequences, not just theoretical ones.
Patricia: Are you confident the government agrees with you?
Bran: Look, I certainly hope that they do. As I say, this to our minds, is a policy area that speaks to what is in Australia’s long term economic interests. I understand that people can be tempted by changes or fluctuations in prices and what that might mean under various different hypothetical scenarios, but it is unambiguously in Australia’s long-term interest to attract more investment and more supply.
Patricia: Just to be clear, have you received any assurance that they’ve ruled it out?
Bran: We’ve been engaging with Government. We haven’t, of course, had any confirmation to that effect as yet, but I certainly hope that in the coming days and weeks, certainly ahead of the Budget, we will receive announcements to that effect, because, as I say, we have to see, we have to see these types of changes resisted.
Patricia: But if you’re going to make claims broadly against this, you have to also stand them up. One of the claims being made by the Opposition Leader is that this is going to be the end of the gas industry. That’s an exaggeration, isn’t it?
Bran: Well, I think it’s very clear that if we change our settings in the way that’s been contemplated by some participants in the inquiry, we would be the least competitive of all of our competitor nations. And in that scenario, then it’s absolutely clear that we won’t attract any further investment in the sector that would have a disastrous impact.
We’ve got to remember that there are 215,000 jobs, for instance, that are supported by the gas sector in Australia. We wouldn’t want to see those jobs compromised. And equally, we’ve seen that the sector, in just the last financial year, contributed $21.9 billion in taxes. That’s a very significant contribution, too.
Patricia: Isn’t the problem, though, that the public doesn’t agree with you? The public has an appetite for this change.
Bran: I think the problem has been that we’ve seen a selective approach to the utilisation of facts, in terms of this argument. We’ve seen propositions put that are based on small components, for instance, arguments around the PRRT are akin to saying, “Well, if we assess how much tax a property developer pays, let’s just look at the stamp duty that they pay in Queensland,” for instance, rather than considering the stamp duty they pay elsewhere, the payroll tax they pay, the company tax that they pay etc. You’ve got to look at the holistic tax perspective and I think the challenge that we’ve seen in this debate, in these discussions, is that people have very selectively utilised facts.
Patricia: Okay, Opposition Leader Angus Taylor has pledged to introduce faster approvals for gas and oil projects under a future Coalition government. Does the Business Council support that proposal?
Bran: We think that’s really important. One of the things that we’ve been agitating for for some time is the significance of the potential for Australia to derive more supply if we’re able to improve the competitiveness of our settings. If we can have faster approvals, that’s a good way to start.
We know, for instance, that Canada, one of our key competitors in this space, has recently made it clear that if you obtain a provincial, their equivalent of a state approval, for a major project, you don’t need a federal approval as well.
What we’ve been agitating for for some time is the type of regulatory reform in the EPBC space that will enable this type of very quick facilitation of approvals, ideally through accreditation of states to administer the federal scheme.
Patricia: The NDIS will also be cut back, that’s another announcement today. Do you support those changes and do you encourage the Coalition to back them?
Bran: Look, I should say I haven’t had, as yet, an opportunity to go through these proposed changes in detail. What I can say is that we support the direction of what we’ve seen, we appreciate that these are extremely difficult choices that need to be made.
We commend the government for the direction of this reform, and from what we’ve seen so far, it looks very positive. We know, as I say, it is difficult and challenging, and as a consequence of that, we’re looking forward to reviewing the detail in due course.
Patricia: Thank you so much for your time.