By Andrew Hobbs, Group Editor
IT IS no understatement to say that the Oil & Gas Australia subscriptions sales team would have more success with Cadbury than the Federal Government has had with selling its budget to the Australian people over recent weeks.
The chocolate manufacturer famously benefited from the largesse of then-opposition leader Tony Abbott in August 2013, when he pledged $16 million to a revamp of the company’s Chocolate Factory in Claremont, Tasmania, as a tourist destination.
“This commitment is about my top three priorities for Tasmania – jobs, jobs and jobs,” Mr Abbott told reporters at the time.
With the 2014-2015 Federal Budget, that priority has gone national – with the introduction of new measures designed to encourage employers to hire workers aged over 50, while the cost of training has increased.
According to the Australian Petroleum Production and Exploration Association,Australia is facing a series of challenges.
“We therefore need as a nation to increase our economy’s competitiveness and attractiveness for global investment; and this means investing in infrastructure, encouraging innovation, and building capacity in the form of a skilled workforce,” it said.
Both APPEA and the Government expect Australia’s oil and gas will contribute to that growth, with the budget papers noting that LNG exports are expected to grow significantly in the coming years.
“By 2015-2016, the value of LNG exports is expected to be roughly double its current level,” Budget Paper No. 1 said.
“Continued robust growth is also expected beyond the forecast years as additional projects come online, with Australia likely to overtake Qatar to become the world’s largest LNG exporter before the end of the decade.”
But it is worth noting that direct earnings from the industry take a back seat in the Budget to the trickle-down effects of this LNG investment.
In particular, Petroleum Resource Rent Tax (PRRT) receipts are forecast to decline by 7.1 per cent in 2013-14 and grow by 39.3 per cent in 2014-15, driven by increased production, the Budget said.
“Excluding measures, PRRT receipts have been revised down by $350 million in 2013-2014 and around $1.3 billion over the four years to 2016-2017 since the 2013-2014 (Mid-year Economic and Fiscal Outlook.)”
“These revisions reflect lower expected profitability of PRRT liable entities.”
APPEA has urged the Australian government to get its house in order, saying the Government had made an important start in improving Australia’s fiscal position.
“The ongoing challenge for the Australian Government is to rein in spending, search for expenditure savings, impose Budget discipline, and unshackle Australia’s productive sectors via vital reforms of the labour relations regulatory framework,” APPEA chief executive David Byers said in an announcement.
EnergyQuest principal Graeme Bethune didn’t mention the Federal Government Budget in the Energy Quarterly for May 2014, but he too called for budget discipline – urging companies to cut costs and improve project execution.
The hope for this, he writes, is in Floating LNG, where Australia’s proximity to the Prelude FLNG project gives it a competitive advantage.
The Australian Centre for Energy and Process Training, run from Western Australia’s Challenger Institute of Technology, is leading the charge, announcing plans to build a specialist training centre after receiving a $15 million commitment from WA in the state’s recently released budget.
This centre is expected to double the centre’s annual training capacity to 1,800 students, its chief executive has said.
If Australia is to take advantage of FLNG, it is to be hoped that the centre, and new ones equally well stocked, are soon overflowing with students – and that the cost of employing them does not deter companies from doing so.
But that is for budgets to come – budgets which, like this one, will have to meet the approval of Clive Palmer and the Palmer United Party.
Most in Canberra are unsure of Mr Palmer’s opinion on these matters – notwithstanding his experience in oil and gas.
But he is certainly a man who knows both the value of tourist attractions, given the Palmer Coolum Resort he owns in Queensland, and Tasmanians – who voted to put a member of his party in the Senate.
I’d suggest the Cadbury funding, at least, is safe.