Petroleum and Geothermal Energy Safety Levies Bill 2011, Petroleum and Geothermal Energy Safety Levies Amendment Bill 2011
Hon Norman Moore; Hon Jon Ford; Hon Wendy Duncan; Hon Alison Xamon
Cognate Debate — Motion
On motion by Hon Norman Moore (Leader of the House), resolved —
That leave be granted for the Petroleum and Geothermal Energy Safety Levies Bill 2011 and the Petroleum and Geothermal Energy Safety Levies Amendment Bill 2011 to be dealt with cognately.
Second Reading — Cognate Debate
Resumed from 19 October.
HON ALISON XAMON (East Metropolitan) [4.02 pm]: I rise on behalf of the Greens (WA) to indicate that we also will support the Petroleum and Geothermal Energy Safety Levies Bill 2011 and the Petroleum and Geothermal Energy Safety Levies Amendment Bill 2011. As was discussed extensively when we debated the mines safety inspector legislation, the Greens are very supportive of cost-recovery models for the regulation of safety activities. I note that this is an extension of those provisions. Effectively, these bills will ensure that the industry, rather than the taxpayer, will incur the costs of regulating the industry. This will be particularly important as we look at an expansion of the industry, so the taxpayer would potentially be facing quite onerous costs if we did not look at different models to fund these regimes. I also agree that it is very important that we provide improved and competitive wages and conditions for safety inspectors to ensure that we can compete with industry. During the briefing, I asked for some detail about how that would be managed, and I am satisfied that the sorts of wages and conditions that are being considered will hopefully compete with those of the industry, because it is very important that that expertise does not bleed from the regulator.
I also note that this is an important part of adding to the safety case regime. Safety cases are an important part of the industry, but it is important also that the regulator be able to uphold safety cases and any other matters pertaining to safety. It will ultimately have the effect of minimising the possibility of serious incident. I understand that these particular industries have a relatively enviable record in the lack of fatalities, but I think in some instances that has been a matter of luck rather than anything else. In particular, I think about the Varanus Island incident and how lucky it was that no-one was killed as a direct result of that explosion. In some ways, it is unbelievable that people managed to emerge without being killed. Even though we recognise these industries are traditionally safer than perhaps the mining industry, the possibility of serious incident is very real. Regimes to ensure that best safety practice is upheld do not just have the positive impact of minimising the possibility of worker death or injury; they also minimise the likelihood of adverse serious impacts such as environmental impacts and any flow-ons such as economic impacts. We saw that with the Varanus Island explosion. Of course, the implications of that explosion were far more serious than simply potential risks to worker safety.
These bills effectively impose levies on the petroleum and geothermal industries. As I understand it—I am happy to receive clarification on this—most of these levies have been paid to the National Offshore Petroleum Safety Authority for the past six years or so. My understanding is that under the bill we will discuss in coming sitting days, NOPSA will cede part of the authority for the area it covers and, therefore, the state will assume coverage for particular areas that it has not had to deal with before. As I understand it, the Department of Mines and Petroleum will now require additional staff to cover these areas. The point I would like to make is that this is nothing new for those industries that already deal in offshore arrangements; effectively, there will just be a change of to whom they need to pay their money. Onshore activities will also be incorporated under these bills. I just want to confirm that this will include activities to extract unconventional gas. I assume that that will also come under these provisions. We do know that there are plans by government to expand quite considerably the unconventional gas industry. If that is going to occur, it makes it all the more important that we look at a levy system, because we are talking about a serious expansion of the need to ensure that we maximise safety opportunities. In any event, we are looking at increasing costs in the future, so it is appropriate that these costs will be primarily borne by industry rather than the taxpayer. I note that some concern was raised in the other place that these levies may be an impost on industry. The Greens do not accept that as an argument; we see that simply as shifting costs away from the average taxpayer, who just needs to make ends meet, to the people who are responsible for incurring those additional costs for government. This is a reasonable way to be moving forward. Importantly, I note that it had been agreed to by industry anyway. I understand that industry may have preferred not to have had an additional levy, but it has agreed, reluctantly perhaps, because it sees this as the way of the future and quite necessary.
We had much discussion around the principle of cost recovery when we debated at length the mines safety inspection levy, which I note all parties supported at the time. When I received this legislation I compared it with the Mines Safety and Inspection Amendment Bill 2009, and I made a comment in the briefings that this bill is an improvement on the original legislation that we saw. The great concern at the time the mines safety levy legislation was debated was that a lot of detail had been left to the regulations; however, this legislation has not gone quite as far and we see more detail incorporated into the bill. It has always been the Greens’ preference to see as much detail in the legislation as we can.
I am concerned that we have not seen the regulations and also about the time frame for the creation of the regulations. I understand it is the government’s intention to have this new levy regime in place by 1 January 2012, which is a very tight time frame in which to implement the new regime. It will be particularly important that everything is in place by that date, because I understand no retrospectivity is intended once this regime is in place. One of the questions I have for the minister is whether he envisages meeting the 1 January time frame for the legislation, and whether the regulations will be in place by that time in order to back up the recovery of those funds. The legislative provisions for industry to appeal to the State Administrative Tribunal over the levy are sound, and I am also pleased to see that the process of appeal will not present a delay to the collection of those moneys. That is a clearly a good balance, because the one thing we would not want to see is the ability for industry to use various judicial means to effectively avoid or procrastinate paying the levy. It is important that that levy is still paid, while allowing for an appeals process.
I also note that, like the mines safety legislation, there is a separate fund, which is good because we will know the exact amount that we are dealing with. I would also like to ask the minister how many additional staff he imagines are likely to come on board as a result of the transfer of jurisdiction from the National Offshore Petroleum Safety Authority and, going into the future, with the expansion of the unconventional gas industry. The third question is whether moving towards a cost recovery model as opposed to a taxpayer-funded model will mean an immediate increase in full-time equivalents or will it simply mean we will be paying more competitive wages and conditions to attract inspectors of a calibre to deal with these industries. On that note, I wrap up by saying that this bill is moving in the right direction and the Greens support going down this path. I hope it will mean not only that there is less burden on the taxpayer but also, and importantly, an improved safety regime all over by attracting better qualified staff and hopefully more staff as we move into the future with the expansion of these industries.
Debate interrupted, pursuant to temporary orders.
[Continued on page 8574.]