The Australian Petroleum Production & Exploration Association (APPEA) has advised that Australia must continue to become an attractive, low-risk investment destination for industries, including the oil and gas sector.
APPEA, in its 2020-21 pre-budget submission, recommends the Australian Government to commit to five key reforms in the 2020-21 federal budget, including making salary costs immediately deductible on infrastructure; introducing specific investment allowances; providing tax asset rollover relief; ensuring tax laws keep apace with commercial practices; and extending the Junior Minerals Exploration Incentive (JMEI).
APPEA chief executive Andrew McConville said as Australia experienced the combined impacts of COVID-19 and challenging market conditions, having the right fiscal and investment policy settings would help to stabilise the country’s oil and gas industry and as a result, the wider economy.
“The fiscal reforms needed to underpin economic recovery – as well as having an open and competitive gas market – will ensure Australia can create a positive, competitive and stable investment and operating environment that will help support employment and growth as we emerge from COVID-19,” McConville said.
McConville added that a decade of regulatory instability and market interventions, coupled with Australia’s position as a high-cost investment destination, had reduced investment confidence in many industries including oil and gas.
“Australia competes for scarce global capital and to do this we must have a best-in-class fiscal regime, objective-based regulation, promote exploration and innovation in resources development and allow markets to work without intervention,” McConville said.
“Industry sees the budget as an important opportunity for the government to pursue reforms to improve fiscal and regulatory stability and provide a market environment that is attractive for investment.”
Following economic recovery from COVID-19, APPEA believes the oil and gas industry will stand ready to provide energy security for homes and manufacturing businesses, generate jobs through exploration and new operations, provide tax revenue and strengthen the economy.