Queensland Liberal-National Party Senator Barry O'Sullivan is rallying support for an audacious plan to quarantine for the bush a portion of any extra money raised by a redesigned Petroleum Resource Rent Tax.
"I want the National Party to make a claim on this before [Treasurer Scott] Morrison gets excited and spends it on something else," Senator O'Sullivan told The Australian Financial Review.
He anticipates widespread support from colleagues when he takes the proposal to the National Party's policy planning conference at the end of this month.
In November, Mr Morrison announced a review of the PRRT and other oil and gas royalty arrangements, the results of which will be fed into the budget planning process.
Mr Morrison said PRRT receipts had halved since 2012-13, down to $800 million, while crude oil excise collections had dropped by even more.
He has asked former Treasury official Michael Callaghan to review the design and operation of the PRRT.
Senator O'Sullivan said the review was an opportunity for a serious conversation about reinvesting in regional and remote Australia – the source of such wealth.
"There is no gas coming out of Queen Street or Pitt Street," Senator O'Sullivan said, referring to the main streets of Brisbane and Sydney.
In Western Australia, the Royalties for Regions program has channelled more than $6.9 billion of the state's mining and onshore petroleum royalties into projects outside capital cities since 2008.
Senator O'Sullivan said at the national level, exports of minerals, gas, beef and wheat were worth $179 billion a year and yet only $1.6 billion a year was spent on regional development.
"For decades governments of all persuasions, on all sides of politics, have gone into the bush, taken all the benefits and goodness out but not reinvested back into provincial Australia," he said.
The review comes after pressure from Left-leaning groups, although the government insisted it had worked on terms of reference for some time.
As Fairfax reported in October, a letter co-signed by 21 organisations and unions was sent to Prime Minister Malcolm Turnbull by the Tax Justice Network urging a Parliamentary inquiry into PRRT.
Among the signatories is the International Transport Workers' Federation, which calculated PRRT revenue would be the equivalent of 1.97 per cent of LNG export sales in 2021, while Qatar would collect $26.6 billion, or 23 per cent of such sales.
"We're about to bypass Qatar as the biggest producers of this gas," Senator O'Sullivan said.
"When our export volumes of this gas are greater than Qatar's then our revenue from it should be similar to what they receive."
The industry argues the revenue drop is a natural consequence of lower prices and the structure of the tax, which allows deductions for exploration and development.
