PETROLEUM (ONSHORE) REGULATION 2016

21 February 2017

Disallowance Motion


The Hon. ADAM SEARLE ( 18:11 ): I speak on behalf of the Opposition on this disallowance motion. The Opposition will support the disallowance motion, because this part of the regulation is a complete fraud. It has been established by the Government as a book entry. The fact is that this does not provide for significant additional resources to go to gas affected communities. This is a public relations stunt by the Government to enable those companies engaged in gas exploration to try to generate public good will in those communities. Let us be very clear: The Government does not need this regulation or this division to make sure that the resources from royalties go back directly to those affected communities. The Government could directly achieve that aim, should it wish.

Instead, on the one hand the Government is making it look as if these commercial enterprises are engaged in some kind of philanthropic exercise when in fact they are simply reducing the royalty payments they are otherwise obliged to pay to the community of New South Wales. If the Government really wants to see royalty payments from this source go to gas affected communities, and to consult affected communities about how that money should be spent, there is no impediment to the Government’s doing that—absolutely no impediment. Instead, this Government has decided to engage in a device to enable companies to try to engage in softening up communities, because this Government and the coal seam gas industry has made a complete hash of the gas policy of this State. The whole industry is completely toxic and unacceptable to large swathes of the community.

This regulation is simply a device to enable those companies engaged in this kind of activity to try to buy public good will. That should not be the approach to public policy in this State. If companies engaged in this form of activity want to make philanthropic or voluntary payments to local communities, no-one is stopping them from doing so. If the Government wants to divert the resources it gets from royalties from these activities to gas‑affected communities—in the form of community partnerships and building community resources—there is no impediment to the Government’s doing that. If the Government wishes to consult local communities about where, and on what projects, this money is spent, there is no impediment preventing the Government from engaging directly in that activity.

Instead of doing so honestly and transparently, the approach taken by this Government, through this device, shows just how badly Government members feel that they have handled gas and energy policy in this State. The fact is that these companies are getting a significant financial benefit from engaging in providing money to this fund. The fund is administered by a Government body. The Government could simply allocate the royalties it receives from this source to that fund, consult the local communities—and do so directly, rather than engaging in this device.

The Hon. Dr Peter Phelps: Are you supporting royalties for the regions?

The Hon. ADAM SEARLE: If only the member would engage in a proper royalties for the regions program perhaps there would be some more transparency around this. This is simply a public relations stunt and a fraud, and the Government should not get away with it. The Government should rethink its strategy and come up with a more open and transparent process for returning royalties and resources to those areas that are affected by gas exploration and extraction. The Government should not be able to get away with this stunt. Opposition members feel that the Government should rethink its strategy and provide the money that otherwise would go into this fund to the gas-affected communities—we do not have a policy objection to that process whatsoever—but the Government should do so openly, honestly and transparently, and not give a financial benefit to companies that are otherwise obliged to make royalty payments to the State and the community.

This regulation simply enables companies to reduce their royalty payment obligations and generate community good will at the same time. No-one is stopping those companies from engaging with gas-affected communities. No-one is stopping those companies from making a contribution to the general wellbeing of those communities in the way envisaged by the fund arrangements. And there is nothing stopping this Government from doing that. Instead of doing it openly, honestly and transparently, this Government has engaged in this device. It should not be allowed to do that .The Government should be much more open and transparent. The Opposition supports the disallowance so that the Government can do this again, and do it properly, making sure that there is openness and transparency in these arrangements and not giving a tax deduction to companies otherwise obliged to make royalty payments to the State.