❓ A WA parliamentary question probes the Treasurer on potential petroleum royalty increases due to rising oil prices and GST revenue from fuel sales, suggesting investment in alternative fuels. The Treasurer rejects all propositions, citing LNG price dependencies and GST spending offsets.
AnsweredQoN 505Legislative Assembly
QuestionView source ↗
Given that the Treasurer told us yesterday that Western Australia’s share of petroleum royalties in 2005-06 is estimated at $532 million, based on $US40 a barrel, and that his mid-year review in December would reveal any windfall in goods and services tax receipts from fuel sales, I ask - (1) Does the Treasurer concede that WA’s petroleum royalty share could in fact return an additional $310 million to this state, based on a more realistic average of $US60 a barrel in 2005-06? (2) Does the Treasurer concede that every 10c rise in the price of fuel at the pump will generate an additional $18.5 million in GST revenue for WA? (3) Will the Treasurer consider investing part of the expected GST windfall from fuel sales in helping to establish an alternative fuel industry in WA, such as biofuels? Mr E.S. RIPPER
AnswerView source ↗
(1) No. The reason is that the impact on revenue in 2005-06 will depend on the flow through of any oil price increase that is sustained to LNG prices. I will not nominate today my prediction for the average price of oil over the full financial year, which is the relevant figure that has to be taken into account. Even if we did know the average figure for oil, we would also need to know the figure for LNG, because that is a significant part of our royalties. (2) No. The member should have listened more closely to my answer yesterday. The fact that people spend more on fuel and therefore pay more in GST does not necessarily result in any increase in GST revenue, because they will spend less on other things and therefore pay less in GST. That is the very point that the Prime Minister himself made. (3) No, because there is no expected GST windfall to spend.
(1) Does the Treasurer concede that WA’s petroleum royalty share could in fact return an additional $310 million to this state, based on a more realistic average of $US60 a barrel in 2005-06? (2) Does the Treasurer concede that every 10c rise in the price of fuel at the pump will generate an additional $18.5 million in GST revenue for WA? (3) Will the Treasurer consider investing part of the expected GST windfall from fuel sales in helping to establish an alternative fuel industry in WA, such as biofuels? Mr E.S. RIPPER replied: (1) No. The reason is that the impact on revenue in 2005-06 will depend on the flow through of any oil price increase that is sustained to LNG prices. I will not nominate today my prediction for the average price of oil over the full financial year, which is the relevant figure that has to be taken into account. Even if we did know the average figure for oil, we would also need to know the figure for LNG, because that is a significant part of our royalties. (2) No. The member should have listened more closely to my answer yesterday. The fact that people spend more on fuel and therefore pay more in GST does not necessarily result in any increase in GST revenue, because they will spend less on other things and therefore pay less in GST. That is the very point that the Prime Minister himself made. (3) No, because there is no expected GST windfall to spend.
(2) Does the Treasurer concede that every 10c rise in the price of fuel at the pump will generate an additional $18.5 million in GST revenue for WA? (3) Will the Treasurer consider investing part of the expected GST windfall from fuel sales in helping to establish an alternative fuel industry in WA, such as biofuels? Mr E.S. RIPPER replied: (1) No. The reason is that the impact on revenue in 2005-06 will depend on the flow through of any oil price increase that is sustained to LNG prices. I will not nominate today my prediction for the average price of oil over the full financial year, which is the relevant figure that has to be taken into account. Even if we did know the average figure for oil, we would also need to know the figure for LNG, because that is a significant part of our royalties. (2) No. The member should have listened more closely to my answer yesterday. The fact that people spend more on fuel and therefore pay more in GST does not necessarily result in any increase in GST revenue, because they will spend less on other things and therefore pay less in GST. That is the very point that the Prime Minister himself made. (3) No, because there is no expected GST windfall to spend.
(3) Will the Treasurer consider investing part of the expected GST windfall from fuel sales in helping to establish an alternative fuel industry in WA, such as biofuels? Mr E.S. RIPPER replied: (1) No. The reason is that the impact on revenue in 2005-06 will depend on the flow through of any oil price increase that is sustained to LNG prices. I will not nominate today my prediction for the average price of oil over the full financial year, which is the relevant figure that has to be taken into account. Even if we did know the average figure for oil, we would also need to know the figure for LNG, because that is a significant part of our royalties. (2) No. The member should have listened more closely to my answer yesterday. The fact that people spend more on fuel and therefore pay more in GST does not necessarily result in any increase in GST revenue, because they will spend less on other things and therefore pay less in GST. That is the very point that the Prime Minister himself made. (3) No, because there is no expected GST windfall to spend.
Mr E.S. RIPPER replied: (1) No. The reason is that the impact on revenue in 2005-06 will depend on the flow through of any oil price increase that is sustained to LNG prices. I will not nominate today my prediction for the average price of oil over the full financial year, which is the relevant figure that has to be taken into account. Even if we did know the average figure for oil, we would also need to know the figure for LNG, because that is a significant part of our royalties. (2) No. The member should have listened more closely to my answer yesterday. The fact that people spend more on fuel and therefore pay more in GST does not necessarily result in any increase in GST revenue, because they will spend less on other things and therefore pay less in GST. That is the very point that the Prime Minister himself made. (3) No, because there is no expected GST windfall to spend.
(1) No. The reason is that the impact on revenue in 2005-06 will depend on the flow through of any oil price increase that is sustained to LNG prices. I will not nominate today my prediction for the average price of oil over the full financial year, which is the relevant figure that has to be taken into account. Even if we did know the average figure for oil, we would also need to know the figure for LNG, because that is a significant part of our royalties. (2) No. The member should have listened more closely to my answer yesterday. The fact that people spend more on fuel and therefore pay more in GST does not necessarily result in any increase in GST revenue, because they will spend less on other things and therefore pay less in GST. That is the very point that the Prime Minister himself made. (3) No, because there is no expected GST windfall to spend.
(2) No. The member should have listened more closely to my answer yesterday. The fact that people spend more on fuel and therefore pay more in GST does not necessarily result in any increase in GST revenue, because they will spend less on other things and therefore pay less in GST. That is the very point that the Prime Minister himself made. (3) No, because there is no expected GST windfall to spend.
(3) No, because there is no expected GST windfall to spend.
(1) Does the Treasurer concede that WA’s petroleum royalty share could in fact return an additional $310 million to this state, based on a more realistic average of $US60 a barrel in 2005-06? (2) Does the Treasurer concede that every 10c rise in the price of fuel at the pump will generate an additional $18.5 million in GST revenue for WA? (3) Will the Treasurer consider investing part of the expected GST windfall from fuel sales in helping to establish an alternative fuel industry in WA, such as biofuels? Mr E.S. RIPPER replied: (1) No. The reason is that the impact on revenue in 2005-06 will depend on the flow through of any oil price increase that is sustained to LNG prices. I will not nominate today my prediction for the average price of oil over the full financial year, which is the relevant figure that has to be taken into account. Even if we did know the average figure for oil, we would also need to know the figure for LNG, because that is a significant part of our royalties. (2) No. The member should have listened more closely to my answer yesterday. The fact that people spend more on fuel and therefore pay more in GST does not necessarily result in any increase in GST revenue, because they will spend less on other things and therefore pay less in GST. That is the very point that the Prime Minister himself made. (3) No, because there is no expected GST windfall to spend.
(2) Does the Treasurer concede that every 10c rise in the price of fuel at the pump will generate an additional $18.5 million in GST revenue for WA? (3) Will the Treasurer consider investing part of the expected GST windfall from fuel sales in helping to establish an alternative fuel industry in WA, such as biofuels? Mr E.S. RIPPER replied: (1) No. The reason is that the impact on revenue in 2005-06 will depend on the flow through of any oil price increase that is sustained to LNG prices. I will not nominate today my prediction for the average price of oil over the full financial year, which is the relevant figure that has to be taken into account. Even if we did know the average figure for oil, we would also need to know the figure for LNG, because that is a significant part of our royalties. (2) No. The member should have listened more closely to my answer yesterday. The fact that people spend more on fuel and therefore pay more in GST does not necessarily result in any increase in GST revenue, because they will spend less on other things and therefore pay less in GST. That is the very point that the Prime Minister himself made. (3) No, because there is no expected GST windfall to spend.
(3) Will the Treasurer consider investing part of the expected GST windfall from fuel sales in helping to establish an alternative fuel industry in WA, such as biofuels? Mr E.S. RIPPER replied: (1) No. The reason is that the impact on revenue in 2005-06 will depend on the flow through of any oil price increase that is sustained to LNG prices. I will not nominate today my prediction for the average price of oil over the full financial year, which is the relevant figure that has to be taken into account. Even if we did know the average figure for oil, we would also need to know the figure for LNG, because that is a significant part of our royalties. (2) No. The member should have listened more closely to my answer yesterday. The fact that people spend more on fuel and therefore pay more in GST does not necessarily result in any increase in GST revenue, because they will spend less on other things and therefore pay less in GST. That is the very point that the Prime Minister himself made. (3) No, because there is no expected GST windfall to spend.
Mr E.S. RIPPER replied: (1) No. The reason is that the impact on revenue in 2005-06 will depend on the flow through of any oil price increase that is sustained to LNG prices. I will not nominate today my prediction for the average price of oil over the full financial year, which is the relevant figure that has to be taken into account. Even if we did know the average figure for oil, we would also need to know the figure for LNG, because that is a significant part of our royalties. (2) No. The member should have listened more closely to my answer yesterday. The fact that people spend more on fuel and therefore pay more in GST does not necessarily result in any increase in GST revenue, because they will spend less on other things and therefore pay less in GST. That is the very point that the Prime Minister himself made. (3) No, because there is no expected GST windfall to spend.
(1) No. The reason is that the impact on revenue in 2005-06 will depend on the flow through of any oil price increase that is sustained to LNG prices. I will not nominate today my prediction for the average price of oil over the full financial year, which is the relevant figure that has to be taken into account. Even if we did know the average figure for oil, we would also need to know the figure for LNG, because that is a significant part of our royalties. (2) No. The member should have listened more closely to my answer yesterday. The fact that people spend more on fuel and therefore pay more in GST does not necessarily result in any increase in GST revenue, because they will spend less on other things and therefore pay less in GST. That is the very point that the Prime Minister himself made. (3) No, because there is no expected GST windfall to spend.
(2) No. The member should have listened more closely to my answer yesterday. The fact that people spend more on fuel and therefore pay more in GST does not necessarily result in any increase in GST revenue, because they will spend less on other things and therefore pay less in GST. That is the very point that the Prime Minister himself made. (3) No, because there is no expected GST windfall to spend.
(3) No, because there is no expected GST windfall to spend.
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