Wed, 14th May 2008

Rudd - Whitlam copy cat

Senator the Hon David Johnston
Shadow Minister for Resources and Energy, Tourism

The first Rudd Budget has done a ‘Whitlam’ and slugged oil producers with a $2.5 billion hit. In one devastating blow to this key national industry he has removed the current exemption of condensate from the crude oil excise to fund his social promises.

Whitlam in 1974 similarly king hit the embryonic oil producing industry by introducing a crude oil excise to fund his extravagant social reform agenda.

By introducing this revenue raising measure he has in effect introduced a new tax on oil production.

It is a backward step and is a blown opportunity after the hard work of the Howard Government in securing an extra 2.5 square million km of seabed for oil exploration.

Energy security in Australia is already in crisis and this tax hike will do nothing to encourage local offshore exploration. In fact it will positively discourage it.

The new tax will have long term consequences for Australia's energy security.

In 2000 we imported just 7 per cent of our total oil consumption but by 2006 this had blown out to 39 per cent of our total consumption.

By removing the current exemption of condensate from the crude oil excise we will see this figure rise even higher to the point where we will be totally reliant on overseas markets for our petrol.

During the 2007 election campaign Labor said this about our energy security:

"Australia's share of global exploration expenditure has fallen and we are now being outpaced by our competitors in Latin America, Canada and Africa. A Rudd Labor Government will: Encourage intensified minerals, oil and gas exploration effort and the development of new exploration science and technology."
By removing the current exemption from the crude oil excise precisely the opposite will be achieved.