AUSTRALIAN MINISTER SEES TARGETED OIL TAX STRATEGY
Australia's crude
oil tax strategy is probably best tackled in terms of a
targeted rather than broadly-based approach, Federal Resources
and Energy Minister Gareth Evans told a meeting here.
    He told the Australian Petroleum Exploration Association
(APEA) annual conference there was a prospect of developing a
package that would recognise the government's economic
priorities while also meeting some of the industry's concerns.
    Evans was referring to a nearly completed government review
of oil taxation.
    Evans said there were plenty of examples where targeted
approaches to oil industry taxation had produced good results
in recent years.
    These include the reduction in the top marginal crude
excise rate on 'old' Bass Strait oil found before September
1975 to 80 pct from 87 pct, and the waiver of excise on onshore
oil announced last September, he said.
    The industry, through the APEA, has been calling for the
elimination of secondary taxation on oil in order to boost
incentives for prospecting against a background of weak prices
and Australia's relatively low exploration levels.
    "While nobody wants to add further unnecessary complexity to
an already complex taxation regime, I am inclined to favour
these kinds of tailored approaches ahead of sweeping changes,
which leave (government) revenue much reduced and may still
leave a lot of uncertainty as to what individual companies are
going to do in major areas," Evans said.
    He said the government did not intend to change its
resource rent taxation (RRT) legislation, now before
parliament, in response to industry calls to allow all
exploration expenditure in a given area to be deductible.
    As previously reported, RRT is a tax of 40 pct limited to
highly prospective offshore areas, based on profits after a
certain rate of return has been achieved for individual
projects.
    APEA has said it is not a true profit-based tax because
exploration deductibility is limited to successful projects.
    Evans said the decision not to change RRT was based more
than anything on the government's desire to ensure the
certainty and stability of the new regime, adding that major
investments have already been planned on the existing ground
rules.
 REUTER
