Explanatory Memorandum
(Circulated by authority of the Minister for Resources and Northern Australia,Senator the Honourable Matthew Canavan)Financial Impact Statement
The amendments to ensure the ongoing validity of apportionment agreements will provide certainty for the Commonwealth Government as to the likely flow of revenue receipts from petroleum development projects that are the subject of an agreement. This is particularly important in the case of large projects, where long-term Commonwealth revenues can be substantial, potentially amounting to billions of dollars over the life of a multi-decade project.
Further, in the case of a titleholder whose resource straddles a Commonwealth-State boundary, an up-front apportionment between jurisdictional revenue regimes (Commonwealth petroleum resource rent tax and State royalty) may be a key factor in the titleholder's commercial decision whether to commit to further investment in the project at that point in time. The ongoing certainty that the amendments will provide may therefore assist to encourage investment in Australian offshore petroleum projects, providing associated taxation revenue for government. However, it is not possible to provide an estimate of the direct impact of these amendments on the fiscal balance.
The amendments to ensure a clear regulation-making power regarding remittals and refunds of EP levies will commence retrospectively, in order to provide certainty that refunds previously given to offshore petroleum titleholders are valid. The amount refunded since 1 January 2012, when the relevant provision commenced, is less than $500,000. The amendments will have zero net impact on the fiscal balance.