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zkojq
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Australia's Offshore Gas Wealth

Mon Oct 10, 2016 12:34 pm

A very interesting article in the Sydney Morning Herald today brings up some important questions about where Australia's Offshore Natural Gas wealth is going:

It's a story of two resource-rich countries with two very different ways of harnessing the wealth they are blessed with. By 2021 Australia will eclipse the Persian Gulf state of Qatar to become the world's biggest exporter of liquefied natural gas.

In that year, when both countries are forecast to pump and ship roughly 100 billion cubic metres of LNG each, Qatar's government will receive $26.6 billion in royalties from the multinational companies exploiting its offshore gasfields. According to Treasury estimates, Australia will receive just $800 million for the same volume of gas leaving its shores.

Qatar levels a 35 per cent tax rate on companies in the petroleum sector. On average, the Arab state receives about 23.5 per cent of the value of export revenues and is using that wealth to subsidise the diversification of its industry.



http://www.smh.com.au/federal-politics/ ... ryaoi.html

Australia has been blessed with an abundance of natural resources, so it is very worrying to see them squandered in such a way. The Australian government is putting through plenty of spending cuts at the moment, so the money is needed however the government doesn't seem enthusiastic about collecting it.

In my opinion this highlights some massive cultural differences in the way that resource rich nations preserve mineral or petrochemical wealth for future generations....or don't. In Norway, the money earned from oil/gas resources is given to one of the national sovereign wealth funds to invest around the world. This has been very successful and helps to maintain budget and currency stability. In the UAE oil wealth is also given to the nation's sovereign wealth fund, though much more of it is spend on domestic investment projects. Over the last decade or two Dubai in particular (but also Abh Dhabi and the other Emirates) has successfully used much of this money to diversify their economy. Immense construction projects around Dubai and in Emiriti companies has build an economy that isn't dependent on oil. - very wise since the oil has since run out. In Saudi Arabia the oil wealth is greater but its management leaves much to be desired. Much of it goes directly to the royal family, efforts to diversify the economy and to westernise are limited and generally unsuccessful. Not all Saudis even have access to running water. Because the government's budget is dependant on oil revenue, oil price changes can suddenly shift the books from surplus to deficit. In ultra neoliberal New Zealand the royalties charged on oil/gas is only 20% once a project is profitable with no provisions for making sure this wealth is saved for future generations.

It is relevant to point out that many of Australia's offshore natural gas facilities have been built recently and their owners need to recover the cost of construction (not cheap in middle of nowhere places like Barrow Island) however the disparity between what the Australian government earns and what the Qatari government does is nevertheless extraordinary. The only thing worse than being poor is being poor and knowing that you were once rich. Naru gives us a great example of how not to manage a national windfall. Thoughts?
 
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Kiwirob
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Re: Australia's Offshore Gas Wealth

Mon Oct 10, 2016 7:18 pm

I'm pretty disappointed that the NZ govt isn't setting up a fund like the Norwegian fund, Australia is also pretty stupid for not doing the same.
 
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PacificBeach88
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Re: Australia's Offshore Gas Wealth

Mon Oct 10, 2016 7:24 pm

Kiwirob wrote:
I'm pretty disappointed that the NZ govt isn't setting up a fund like the Norwegian fund, Australia is also pretty stupid for not doing the same.


Agreed! If you as a country are going to exploit your once in a lifetime raw resources, you should put them in a fund that is looking at a 100 to 200 year payout, so that many generations of your countrymen can benefit from those said resources once they are exhausted. That's only fair.
 
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zkojq
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Re: Australia's Offshore Gas Wealth

Wed Oct 12, 2016 3:59 am

Kiwirob wrote:
I'm pretty disappointed that the NZ govt isn't setting up a fund like the Norwegian fund

The way that Norway manages its money is very prudent. By comparison, Britains oil wealth was pissed away by Thatcher giving tax cuts to the wealthiest earners, resulting in a property boom. Britain now has nothing to show for it. Neoliberalism at its best. Meanwhile Australia seems content with not even capturing much of the wealth and giving the windfall to foreign companies (you can bet that they will use transfer pricing tactics to minimise their taxable earnings in Australia and shift the earnings offshore to somewhere like Singapore or HK).

Britain got nothing from the North Sea until the mid-70s – then the pounds started gushing. At their mid-80s peak, oil and gas revenues were worth more than 3% of national income. According to the chief economist at PricewaterhouseCoopers, John Hawksworth, had all this money been set aside and invested in ultra-safe assets it would have been worth £450bn by 2008. He admits that is a very conservative estimate: Sukhdev Johal, professor of accounting at Queen Mary University of London, thinks the total might well have been £850bn by now.

So where did our billions go? Hawksworth writes: "The logical answer is that the oil money enabled non-oil taxes to be kept lower." In other words: tax cuts. When the North Sea was providing maximum income, Thatcher's chancellor, Nigel Lawson slashed income and other direct taxes, especially for the rich. The top rate of tax came down from 60p in the pound to just 40p by 1988. He also reduced the basic rate of income tax; but the poor wouldn't have seen much of those pounds in their pockets, as, thanks to the Tories, they were paying more VAT.



https://www.theguardian.com/commentisfr ... gians-fund

PacificBeach88 wrote:
Kiwirob wrote:
I'm pretty disappointed that the NZ govt isn't setting up a fund like the Norwegian fund, Australia is also pretty stupid for not doing the same.


Agreed! If you as a country are going to exploit your once in a lifetime raw resources, you should put them in a fund that is looking at a 100 to 200 year payout, so that many generations of your countrymen can benefit from those said resources once they are exhausted.

It is so greedy for the current generation to keep the windfall for themselves.
 
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cougar15
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Re: Australia's Offshore Gas Wealth

Mon Oct 17, 2016 5:58 pm

Kiwirob wrote:
I'm pretty disappointed that the NZ govt isn't setting up a fund like the Norwegian fund, Australia is also pretty stupid for not doing the same.


Agree with you entirely and I doubt the average aussie will ever bennefit from any of this. Interesting that the topic is finally reaching a wider audience, the subject isn´t new and I am sure many a pocket has been discretely lined for years. I wonder if the discussion will gain momentum (both for the bennefit of future Generations - at that goes for both the oz & kiwi govts.) or if it´ll just die in the a$$ again like in the past ....!
 
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PacificBeach88
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Re: Australia's Offshore Gas Wealth

Mon Oct 17, 2016 6:48 pm

What's the name of that piece of work, hateful skank of a woman from Aussie that is simply a deplorable, rich, jackass that inherited her family's extraction business?
 
ContentCreator
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Re: Australia's Offshore Gas Wealth

Mon Oct 17, 2016 7:01 pm

PacificBeach88 wrote:
What's the name of that piece of work, hateful skank of a woman from Aussie that is simply a deplorable, rich, jackass that inherited her family's extraction business?


"A more successful and well liked person than you'll ever be" sounds about right. That's what I call her.
 
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PacificBeach88
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Re: Australia's Offshore Gas Wealth

Mon Oct 17, 2016 7:24 pm

ContentCreator wrote:
PacificBeach88 wrote:
What's the name of that piece of work, hateful skank of a woman from Aussie that is simply a deplorable, rich, jackass that inherited her family's extraction business?


"A more successful and well liked person than you'll ever be" sounds about right. That's what I call her.



LOL! I love that I get under your skin so badly you simply cannot ignore me. LOL! What's wrong? Airwhiners get too lonely?
 
ContentCreator
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Re: Australia's Offshore Gas Wealth

Mon Oct 17, 2016 7:25 pm

PacificBeach88 wrote:
ContentCreator wrote:
PacificBeach88 wrote:
What's the name of that piece of work, hateful skank of a woman from Aussie that is simply a deplorable, rich, jackass that inherited her family's extraction business?


"A more successful and well liked person than you'll ever be" sounds about right. That's what I call her.



LOL! I love that I get under your skin so badly you simply cannot ignore me. LOL! What's wrong? Airwhiners get too lonely?


I'm just stating facts. Her net worth and social supporters exceeds anything you or I will ever have so she is literally more successful and well liked than you or me. How is that wrong?
 
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Kiwirob
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Re: Australia's Offshore Gas Wealth

Mon Oct 17, 2016 9:08 pm

PacificBeach88 wrote:
What's the name of that piece of work, hateful skank of a woman from Aussie that is simply a deplorable, rich, jackass that inherited her family's extraction business?


Gina Reinhart?
 
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PacificBeach88
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Re: Australia's Offshore Gas Wealth

Mon Oct 17, 2016 10:32 pm

Kiwirob wrote:
PacificBeach88 wrote:
What's the name of that piece of work, hateful skank of a woman from Aussie that is simply a deplorable, rich, jackass that inherited her family's extraction business?


Gina Reinhart?



Thank you! That's the nasty hater!

Image
 
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777Jet
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Re: Australia's Offshore Gas Wealth

Mon Oct 17, 2016 11:37 pm

PacificBeach88 wrote:
Kiwirob wrote:
PacificBeach88 wrote:
What's the name of that piece of work, hateful skank of a woman from Aussie that is simply a deplorable, rich, jackass that inherited her family's extraction business?


Gina Reinhart?



Thank you! That's the nasty hater!

Image


You know you want to do to her what Trump said other women allowed him to do to them. Don't deny it! You want it badly! Octopus!
 
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zkojq
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Re: Australia's Offshore Gas Wealth

Wed Oct 19, 2016 1:32 am

PacificBeach88 wrote:
What's the name of that piece of work, hateful skank of a woman from Aussie that is simply a deplorable, rich, jackass that inherited her family's extraction business?

Gina Rinehart. She's a classic babyboomer, when you think about it. Inherited everything, completely out of touch with reality, likes to tell people that it was her own hard work, tries to pull the ladder up from behind her by cutting her kids out of the estate/will. Oh and unsurprisingly she fought hard against the Minerals Resource Rent Tax (basically royalties on non-renewable resources such as iron ore).

ContentCreator wrote:
"A more successful and well liked person than you'll ever be" sounds about right. That's what I call her.

If by success you mean she had an immensely wealthy father from whom she inherited her wealth, then sure. Anyone else in this thread could inherit such money nad be far more 'successful' than you will ever be.

ContentCreator wrote:
well liked

ContentCreator wrote:
social supporters

Have you even been to Australia? :lol:

777Jet wrote:
You know you want to do to her what Trump said other women allowed him to do to them. Don't deny it! You want it badly!

You ok bro?
 
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PacificBeach88
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Re: Australia's Offshore Gas Wealth

Wed Oct 19, 2016 2:42 am

zkojq wrote:
Gina Rinehart. She's a classic babyboomer, when you think about it. Inherited everything, completely out of touch with reality, likes to tell people that it was her own hard work, tries to pull the ladder up from behind her by cutting her kids out of the estate/will. Oh and unsurprisingly she fought hard against the Minerals Resource Rent Tax (basically royalties on non-renewable resources such as iron ore).


You are quite right. The Boomers have been the worst group of people this Earth has seen in a very, very, long time.

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