The biggest issue in the Treasury Laws Amendment (Tax Accountability and Fairness) Bill 2023 is that it rams together two important but unrelated issues: addressing the PwC tax scandal and increasing the petroleum resource rent tax. It's hard to see the combination of these two unrelated issues in this bill as anything other than a blatant political wedge. Many on the crossbench want to see Australia earning better royalties from gas companies and think that this amendment to the PRRT is wholly inadequate. At the same time, many on the crossbench want to see greater transparency and accountability for tax advisers and consultants.

My first concern is that, when unrelated issues are combined, the values of the electorate are not able to be expressed accurately in a simple vote when unrelated issues are combined. This is not fair, and it does not result in better legislation. That issue aside, I'll speak about PwC and the PRRT in turn. On the PwC Response, we learnt from the PwC tax scandal that the regulatory responses we have at our disposal to deal with misconduct by tax advisers are sorely inadequate. It's important that we hold people who are offering financial and taxation advisory services to very high ethical and professional standards, and, where they fall short or where there's misconduct, we need to know any regulatory response will be appropriate and timely. This bill includes a suite of amendments to address the regulation of tax advisers and their conduct, and I'll comment on a couple of those. Firstly, on tax avoidance schemes: the existing legislation to deter tax advisers from promoting tax avoidance and tax evasion schemes are clearly no longer fit for purpose. Sophisticated financial advisers and tax promoters are always on the lookout for ways to outsmart and exploit the legislation. These amendments will allow the ATO to widen the net to apply these laws to a broader range of persons who are advisers and promoters and to entities, as well as to a broader range of schemes, and significantly increase the civil penalty regime and the maximum penalties available. This is a good thing.

Secondly, on the disclosure of alleged misconduct: in light of the PwC scandal, these reforms will also capture any tax adviser or practitioner who discloses or misuses confidential information. The proposed amendments that pierce the secrecy provisions are particularly welcome. Ordinarily, regulators at the ATO or Tax Practitioners Board would not be permitted to disclose details of serious misconduct that they're investigating. In cases that involve breaches of confidentiality of a government agency, there's currently a significant delay before the alleged breach is reported to the government and, consequently, an inevitable further delay in any appropriate interim regulatory response, by which time the public interest has likely not been served. These amendments now permit the ATO or Tax Practitioners Board to disclose suspected breaches both direct to Treasury and/or to the appropriate professional disciplinary body and will give us some confidence that the regulatory or disciplinary response at an agency or ministerial level might be more appropriate and timelier.

Thirdly, on whistleblowing: the amendments include better protection to eligible whistleblowers who wish to report and disclose alleged professional misconduct to the Tax Practitioners Board. Currently, disclosure of information to the ATO commissioner attracts whistleblower protections but disclosures made to the TPB do not. This makes no sense. It's an important part of maintaining integrity in our democracy that people who bear witness to wrongdoing feel comfortable and safe to speak out.

I've spoken about this on numerous occasions, and I particularly welcome any amendment that recognises the valuable role whistleblowers can play in our democratic process, the personal cost to themselves in doing so and the appropriate protections we should be offering them, but I don't understand why the government has seen fit to prioritise this whistleblowing amendment when the pressing amendments to the public interest disclosure legislation remain outstanding. This represents a piecemeal approach to protecting whistleblowers, and I continue to call for a more holistic approach so that whistleblowers are protected no matter which agency they are speaking about.

I also want to talk about what's missing in this PwC response. While these changes go part of the way to addressing the loss of trust in the government's use of consultants, they don't go far enough. A big part of the PwC scandal was public horror at the cosy relationship between consultants and the government. We heard some astounding numbers. Over the last 10 years, donations from the big four consulting companies have amounted to $4.3 million, and during that time the value of the contracts awarded to big four firms has quadrupled—and that's just the direct donations.

There are also mutually beneficial arrangements, like PwC hosting the annual post-budget dinner for the government. Everyone wins in this arrangement, except, possibly, the taxpayers. PwC pays for a fancy dinner—a fairly modest in-kind donation in the scheme of things. PwC makes these tickets available to its clients, proving it has exclusive access to government ministers on budget night. Its clients buy tickets for thousands of dollars, which go straight to the political party in power at the time. This is not considered a donation because you get a dinner for it. So the politicians win, the consultants win and the big companies who use the consultants win—cash for access. This cosy relationship must also be addressed if the government wants to move on from the PwC scandal.

Now to the PRRT: this Treasury bill also addresses amendments in relation to the petroleum resource rent tax, introducing a cap to the availability of deductible expenditure incurred per project per taxable year. The government says that this means the offshore LNG industry will pay more PRRT sooner than under the current PRRT regime. It's a start, but it's a very small change in the scheme of things. Clearly, the PRRT is currently failing to deliver a proper return to Australians. This is something I've talked about for some time. Australians should be entitled to get fair value for the resources that are extracted from our country.

We have the weakest resource rent tax in the world. In 2022 two-thirds of the gas extracted in Western Australia was not taxed at all. It's worth drawing comparisons with Norway, which has a significant resources industry. Norwegians receive a bigger share of the profits from its oil and gas sector through a 22 per cent corporate tax rate as well as a 56 per cent special petroleum tax. Norway has taxed these profits at the combined rate of 78 per cent since 1996, with the result that Norway's state pension fund is worth $1.9 trillion, or $350,000 per citizen. By comparison, in Australia, we calculate our PRRT at a lower rate, which amounts to a total combined tax of 58 per cent, versus Norway's 78 per cent

Oil and gas projects have significant upfront capital expenditure over many years, amounting to billions of dollars. This expenditure is carried forward as deductions against any revenue, so these projects don't make a profit for some time. The PRRT has been designed so that oil and gas companies don't have to pay anything for the oil and gas they're extracting until they've effectively paid off their capital costs. In the context of a warming planet, driven by the use of these fossil fuels, this doesn't make a lot of sense. This legislation creates a 90 per cent deductions cap, so fossil fuel companies have to pay at least 10 per cent of what they're supposed to. This is still extremely low. And was unsurprisingly, the lowest of the options considered and the option preferred by the gas industry. There's also a seven-year exemption to the deductions cap, which encourages new fossil fuel development, contrary to our commitment to the Paris Agreement.

.Given the damage these fossil fuels do to the planet, even with this amendment, our PRRT structure is encouraging development of new fossil fuel projects at a bargain rate. We allow 90 per cent deductions. Deductions can be rolled over. We value the assets at the cheapest point of the supply chain, and we give a seven-year exception to the deduction cap. These are all choices that we're making about how much revenue we earn from our natural resources, which are finite and, in this case, damaging to the planet. To add insult to injury, since the Ukraine war, these fossil fuel companies have generated additional profits of about $40 billion over and above their expectations. Of this, only 1.5 per cent is collectable as PRRT.

In summary, this change to the PRRT is disappointingly meek. You can't change tax regimes too often because it does have an impact on business certainly. This is a missed opportunity to actually get value for the limited resources that are being extracted that damage the planet and ultimately should be staying in the ground. I'll be supporting the amendments to split the bill, to address these two significant issues separately and to strengthen the PRRT changes so Australians get more value for gas in the limited time that it continues to be extracted.