AUSTRALIAN MINISTER SEES TARGETED OIL TAX STRATEGY

  Australia's crude
  oil tax strategy is probably best tackled in terms of a
  targeted rather than broadly-based approach, Federal Resources
  and Energy Minister Gareth Evans told a meeting here.
      He told the Australian Petroleum Exploration Association
  (APEA) annual conference there was a prospect of developing a
  package that would recognise the government's economic
  priorities while also meeting some of the industry's concerns.
      Evans was referring to a nearly completed government review
  of oil taxation.
      Evans said there were plenty of examples where targeted
  approaches to oil industry taxation had produced good results
  in recent years.
      These include the reduction in the top marginal crude
  excise rate on 'old' Bass Strait oil found before September
  1975 to 80 pct from 87 pct, and the waiver of excise on onshore
  oil announced last September, he said.
      The industry, through the APEA, has been calling for the
  elimination of secondary taxation on oil in order to boost
  incentives for prospecting against a background of weak prices
  and Australia's relatively low exploration levels.
      "While nobody wants to add further unnecessary complexity to
  an already complex taxation regime, I am inclined to favour
  these kinds of tailored approaches ahead of sweeping changes,
  which leave (government) revenue much reduced and may still
  leave a lot of uncertainty as to what individual companies are
  going to do in major areas," Evans said.
      He said the government did not intend to change its
  resource rent taxation (RRT) legislation, now before
  parliament, in response to industry calls to allow all
  exploration expenditure in a given area to be deductible.
      As previously reported, RRT is a tax of 40 pct limited to
  highly prospective offshore areas, based on profits after a
  certain rate of return has been achieved for individual
  projects.
      APEA has said it is not a true profit-based tax because
  exploration deductibility is limited to successful projects.
      Evans said the decision not to change RRT was based more
  than anything on the government's desire to ensure the
  certainty and stability of the new regime, adding that major
  investments have already been planned on the existing ground
  rules.
  

