Royalties: What next for key, multi-billion dollar industry?
JACKIE Trad's $100,000 gas royalty review, headed by former South Australian premier Jay Weatherill, has concluded without a recommendation on a way forward for the multi-billion dollar industry.
The Courier-Mail can reveal the former Labor premier's report was handed to the Treasurer earlier this month, with three royalty models, one of which isn't even complete.
Another model - proposed by Queensland Treasury's Office of State Revenue - was described to Mr Weatherill during his review as "amongst the worst" designs possible for decreasing gas prices, increasing gas supply and attracting investment and exploration.
It means the gas companies still have no certainty over a royalty framework eight months after the review was announced, curtailing their ability to expand and create jobs in an industry that is already slated to pour $620 million into Budget coffers this year.
The three options in Mr Weatherill's report include an industry-preferred, well-head value model, based on the value of gas extracted; the OSR model, based on volume; and one proposed by Mr Weatherill, which would see a legislated transfer price.
However, the last model requires substantial more work, and the industry is demanding another independent expert, like Ernst and Young, Deloitte or PwC, be brought in as it does not trust the OSR is capable.
Ms Trad declined to comment on the contents of the report but offered a personal briefing to industry yesterday following The Courier-Mail's questions.
"Mr Weatherill's report has been received by Treasury and will be carefully considered by the Queensland Government," she said through a spokesman.
A submission by University of Queensland's Centre for Natural Gas director Professor Andrew J. Garnett described OSR's model as "simplistic".