The proposal has two components that would have effect from 1 July 2025.

Component 1

Replace the existing petroleum resource rent tax (PRRT) method of uplifting excess expenditure to future years that relates to PRRT projects with the following method.

• All excess expenditure recorded before the implementation date would be immediately deducted against PRRT profit. Any unused excess expenditure incurred before the implementation date would not be carried forward to future years.
• All expenditure, including general expenditure, incurred after the implementation date, would be deducted based on prime cost depreciation over 15 years so that 6.66% of the expenditure would be deducted each year. There would be no uplift factor applied to unused expenditure.

In addition to the offshore gas projects that are liable to pay PRRT currently, the following 4 onshore projects would be included in the PRRT calculation:

• Australian Pacific LNG (APLNG)
• Cooper Basin
• Gladstone LNG Project (GLNG)
• Queensland Curtis LNG Project (QCLNG)

Component 2 

Place a 10% royalty on offshore projects (excluding the North West Shelf project) that are subject to the PRRT. Royalty payments would be creditable against PRRT liabilities on a one-for-one basis and treated as a deductible expense in calculating company tax liabilities. Any royalties paid that are not credited against PRRT liabilities in a year would be carried forward, to be credited against PRRT liabilities in a later year.