What the 2015-16 federal budget has in store for the gas industry

Federal Treasurer Joe Hockey.

Federal Treasurer Joe Hockey.

The 2015–16 Federal Budget has been welcomed as recognising the oil and gas industry’s significant role in the Australian economy.

Federal Treasurer Joe Hockey highlighted in his delivery speech the fact that Australia will become the world’s largest exported of LNG in the next five years.

The Budget Paper 1 states: “Significant investments in LNG are still under development and will make a strong contribution to export growth in coming years. Exports of LNG are set to nearly double over the forecast period as major projects in Western Australia, Queensland and the Northern Territory enter into their production phases.”

APPEA Acting Chief Executive Paul Fennelly said policy and regulatory settings by all governments will be an important factor in determining whether Australia is able to capture the next phase of investment in the growing global LNG sector.

“There is no simple or single solution that will ensure that Australia captures this growth,” Mr Fennelly said.

Boost for northern development

A multi-billion dollar concessional loan scheme for infrastructure in Northern Australia will also aim to encourage sustainable development, with Northern Territory Chief Minister Adam Giles commenting the scheme recognises that infrastructure development in the north holds the key to Australia’s economic future.

“As part of the $A5 billion Northern Australia Infrastructure Facility, the Commonwealth will provide concessional loans to support the infrastructure projects desperately needed to bring the North to its full potential,” Mr Giles said.

“This includes ports, railways, pipelines and electricity generation.”

FIFO tax offset cut
Meanwhile, the budget will aim to save about $A110 million per year by denying the zone tax offset for fly-in, fly-out (FIFO) workers to about 20 per cent of claimants not currently living in defined remote geographic zones.

To be eligible for the current offset, a worker must reside in a designated remote area for more than 183 days in a financial year.

Click here to view the 2015–16 Federal Budget.

Enter your details to subscribe to the free fortnightly Gas Today e-newsletter

Thank you for signing up for the Gas Today Online Update.