Good morning, my name is Richard Owen, and I am chairman of the ExxonMobil Australia group of companies. Appearing with me is our Chief Financial Officer, Craig Hardgrove and our Tax Manager, Stuart Brown. Thank you for this opportunity to address the committee.
I intend to address outstanding concerns, correct the misinformation being disseminated about ExxonMobil’s tax record, and will provide you with the facts about ExxonMobil’s important contributions to Australia’s economy and our continuing, long-term commitment to the country’s energy future.
ExxonMobil Australia has been operating successfully in this country since 1895, and we have always considered our reputation for ethical and honest dealings to be our most vital corporate asset.
We have made significant contribution to Australia’s economic wellbeing through the reliable supply of energy that helps fuel growth. We have invested nearly A$40 billion in the country. We owe it to our stakeholders, including government officials, our customers and the general public, to address concerns about energy supplies, costs and taxes both factually and transparently.
The Tax Act is one of the most, if not the most, complex pieces of regulation governing the way a company does business in Australia. As a result, it is not well understood outside of the policymaking, accounting and tax law community, and bits of information out of proper context can easily and even maliciously be manipulated in attempts to achieve political ends.
There is a lot of inaccurate and false information currently appearing on the internet and in social media that is making it difficult for people to break through the noise, distinguish fact from fiction, and reach informed views on many complex aspects of our economy, including energy production.
This is why I am pleased to appear before you today. There are special interest groups claiming that ExxonMobil Australia doesn’t pay its fair share of tax. The claim is completely baseless and simply untrue.
ExxonMobil Australia has a long history of paying its fair share of taxes in Australia, having paid more than A$2 billion in corporate income tax alone since 2000, as well as more than A$12 billion in Petroleum Rent Resource tax since 1990.
We’ve just completed a decade of record capital investments, which have included multibillion dollar projects like the Gorgon Project and the Kipper Tuna Turrum project.
These investments have helped secure jobs for thousands of Australians. These investments will also generate future revenue and taxes for the government, but they did put ExxonMobil in a tax-loss position in 2016. We expect to have taxable income going forward.
We appreciate and agree with the basic and genuine concern that the public and government have with regard to ensuring that companies pay their appropriate shares of taxes. Tax transparency is vitally important to sustaining a modern economy, and it’s important to a company’s social license to operate.
Given our shared concern on this point, ExxonMobil Australia has voluntarily signed the Australian Taxation Office’s Tax Transparency Code. We want the community to have confidence that ExxonMobil works with the ATO to ensure it always meets its tax commitments. ExxonMobil takes pride in its compliance programs, which on any measure, stack up against the best in the world.
And we’re also proud that our tax payments have helped fund vital government programs and services for more than five decades and counting.
When I joined the company back in the ‘80s, our Gippsland Basin Joint Venture with BHP was providing 10 percent of all federal government revenue. Today, we continue to be a major contributor to the Australian economy.
Recent ACIL Allen economic modelling shows that the combined direct and indirect economic benefits of ExxonMobil’s investments to date have and will continue to account for a nearly A$6 billion increase in Australia’s GDP equivalent per year, from the 1960s through to the 2060s – at least a century’s worth of significant value to the country.
Now, we are preparing to compete for billions of dollars in capital to develop the next phase of energy projects. As always, I am mindful of what is at stake in this competition, including the future of thousands of Australian jobs.
Australia’s cost of doing business, its fiscal terms including taxation, will significantly influence its competitiveness and ability to drive economic growth in an era of fierce global competition to attract energy investment. I’m confident that through constructive dialogue and thoughtful policymaking, Australia will continue to be an attractive market. We’ve been a proud partner in Australia’s economic and energy development for decades and look forward to the next phase.
Thank you again for this opportunity to contribute to this committee, I will be happy to answer any questions.