By Andrew Hobbs
AUSTRALIAN resources minister Josh Frydenberg has pledged to cut red tape and create new market opportunities if re-elected.
Addressing the crowd in the opening plenary session of the Australian Petroleum Production and Exploration Association (APPEA) conference in Brisbane, Mr Frydenberg said Australia needed to remain competitive in a challenging market.
“This is of course a double dissolution election brought about by the Senate blocking important workplace relations reforms, which are absolutely vital to the oil and gas sector,” he said.
“Let’s not forget that industrial disputes increased by 34 per cent since the abolition of the Australian Building and Construction Commission. This has increased costs and decreased productivity in the construction phase of major oil and gas projects.”
Mr Frydenberg also said that bolstering Australian competitiveness would require that “the taxation system encourages investment, entrepreneurship and job creation,” he said.
In doing this, he said the government would not make further changes to thin capitalisation rules – the practice that allows multinationals to shift debt into their accounts in higher taxing countries, ensuring that a tax deduction is received for the interest paid.
This reduces the overall profits in the higher taxing countries, and thereby reduces their tax liability.
The practice was highlighted by the Senate inquiry into corporate tax avoidance, released in April this year, but the inquiry found it difficult to find any examples of this that were publicly available.
Mr Frydenberg said that Australia already had “the most robust thin capitalisation rules in the world.”
“We understand that reasonable debt deductions are vital for supporting large resources projects with long lead times, and that Australia is competing for international capital to fund these projects,” he said.
“That does not mean companies should not pay their fair share of tax… In this year’s budget we announced new laws, backed up by a taskforce of more than 1,000 specialist staff in the Australian Taxation Office, that will further strengthen Australia’s efforts to combat tax avoidance.”
While praising earlier government moves to create one regulatory authority for environmental approvals for offshore petroleum activities in Commonwealth waters (the National Offshore Petroleum Safety and Environmental Management Authority), Mr Frydenberg rededicated the government to creating a similar facility for approval of onshore projects, saying it had won the approval of state and territory governments.
“But the legislation necessary to complete the delegation of approval decisions to the states and territories was blocked by the Senate,” he said.
A re-elected Turnbull government would also launch free trade agreement negotiations with the European Union, and conclude them with India, Indonesia and all ten Association of South East Asian Nations (ASEAN) member states.