Senate Estimates confirmed last month that BG Group’s gas bonanza has delivered diddly-squat to Australia in tax – despite claims it would contribute “more than $1 billion”. Whistleblower, Simone Marsh, investigates the crony capitalism behind the Gladstone debacle; the history of how politicians kowtowed to the Duke of York-led British BG Group by pulling strings, shifting guidelines and ignoring public opinion to unlock prime farmland for fracking. Marsh raises new questions about the timing of the spill of former Prime Minister Kevin Rudd.
OCTOBER’S SENATE Estimates hearings confirmed a paltry amount of tax has been paid in Australia by Britain’s BG Group of companies behind the controversial Queensland Curtis coal seam gas to liquefied natural gas export development. Greens Senator Larissa Waters queried the Tax Commissioner on what had become of the “more than $1 billion in tax a year after 2014” promised, on the business pages of The Australian, by then CEO Catherine Tanna in 2011.
At the time, Tanna was mining Australia’s resources as executive vice-president of BG Group and captain of subsidiary Queensland Gas Company (QGC). Royal Dutch Shell acquired BG/QGC and its $US20.4 billion QCLNG business in 2016. In 2016, Shell Australia Pty Ltd reported it paid US$21.7 million in tax to Australia for all company business, including the North West Shelf and QGC.
Tax Office Deputy Commissioner Jeremy Hirschhorn revealed that, while amassing a gross income of $6.3 billion in 2015-16, BG International (Aust) Pty Ltd paid zero income tax. A second company in the group, BGC Australia Pty Ltd, contributed $35 million. A third, BG International Ltd, also paid no income tax in Australia that year. By comparison, BG Group made tax payments of US$406.4 million to Her Majesty’s Revenue and Customs in the UK, from its global operations in 2015.
Tanna is a board member of the Reserve Bank of Australia and the Business Council of Australia. BCA president Grant King had commandeered APLNG, the last of the methane-monster Gladstone triplets, birthed alongside QCLNG. It is unknown how RBA matters may have conflicted with Tanna’s business interests over the years, or how such conflicts have been managed.
The well-connected Ms Tanna is the daughter of R.G. Tanna of Gladstone Port Authority and coal terminal notoriety in international fossil fuel shipping circles. LNG ship Methane Mickie Harper bears the names of her offspring. Her career in oil and gas includes stints at BHP and Royal Dutch Shell (as executive vice president of gas and power, with responsibility for LNG, gas transmission and power generation in Africa) and involves engagements in China, America and Russia — including a JV with the soviet’s Gazprom.
Tanna now heads EnergyAustralia Holdings Limited, the gas and electricity company owned by Hong Kong-listed China Light and Power. An investigation by michaelwest.com.au, based on data published by the Australian Tax Office, found EA paidno income tax in Australia over the three financial years 2013-14, 2014-15 and 2015-16 — despite raking in a total income of $23.9 billion. EA has interests in expansion of coal seam gas — including with Santos in NSW, where the community has been fighting a long-standing battle against gas field invasion.
By Royal Disappointment
When the British Royal Family visits these shores, Australians roll out the red carpet. But how about when a British corporation takes advantage of our royal ties to roll out experimental gas fields on our prime farmland? History shows our leaders rolled over; unlocking eastern Australia for a gas cartel to take hold of our Parliament, land, energy and financial resources. Our leaders acted contrary to the expressed wishes of their electors; and to our environmental and socio-economic detriment too.
Before establishing legal authority to take our resources, BG used the Duke of York to sell Australia’s gas to a Chinese government owned corporation — with the assistance of a member of Australia’s Parliament, resources minister Martin Ferguson. Ferguson departed parliament and soon landed in a seat on BG’s board.
The Daily Mail made this point in a cartoon titled “By Royal Disappointment” on 14 March 2011:
To what extent have 21st century Australians been used as cannon fodder to uphold British trade and power? Were the four Royal visits to Queensland between March 2011 and April 2014 an orchestrated public relations exercise to coincide with construction of British gas mining fields? This period stands as an anomaly in the history of visits by our monarchs.
The tax coup of 2010
In March 2010, the BG Group pulled off one of Australia’s biggest sales of LNG to China (see below). After the sale, treasurer Wayne Swan participated in the June coup that toppled the nation’s Prime Minister, Kevin Rudd. The coup prevented a scheduled meeting in Canberra with BG’s London chief about the Resource Super Profits Tax Rudd was seeking for Australia. The coup also resulted in Wayne Swan becoming Deputy Prime Minister.
According to The Australian, BG’s Frank Chapman had arrived in Brisbane on the corporate jet on Monday 21 June, anticipating collection of QCLNG’s signed EIS evaluation report from Queensland Premier Anna Bligh.
The coup in Canberra occurred the same night BG’s project was signed off in Brisbane: Wednesday 23 June 2010. Queensland’s coordinator-general (CG) had been instructed to sign off BG’s QCLNG EIS evaluation report that evening. I can confirm this, as I had been called in that morning to write the greenhouse gas chapter by mid-afternoon.
When I objected on the grounds of unreasonable time to read material (omitted from the EIS) the department’s project director replied the CG wanted a copy of the report “in his bag” that evening. When I asked to speak to the CG, the project director responded “The Coordinator-General’s been told”. This was highly unusual as the CG was not under legislated timeframes, nor obliged to take such directions.
FOI documents reveal the State’s treasurer had received an email on 12 May 2010 from the former director of UK Trade and Investment, Ian Fletcher. In London, Fletcher had also worked as principal private secretary to Sir Andrew Turnbull — UK Cabinet secretary and head of the Home Civil Service during the Blair Government and the Iraq war. Mysteriously in 2009, Fletcher became director-general of DEEDI, the Queensland department that granted gas-mining leases.
Fletcher’s email informed the Treasurer that BG wanted their approval within weeks: “the drop dead date really is the June board meeting”. Regarding the Rudd government’s proposed resources super profits tax, Fletcher informs: “the company is quietly confident that their negotiations with Federal Treasury are going to yield fruit”.