The author of the Turnbull government’s review of the petroleum resource rent tax will be asked to explain to a Senate inquiry why he thinks the PRRT does not need significant overhauling, despite multiple calls from experts to do so.

The government’s review of the PRRT was released last month, and it found Australians are not necessarily being unfairly compensated for the exploitation of their natural resources under the tax regime.

It’s author Michael Callaghan, a former Treasury official and former chief of staff to Peter Costello, recommended a softly-softly approach to reform of the PRRT, despite hearing from experts that the tax had failed to collect billions of dollars in revenue.

He said any major changes to the tax should only apply to new projects.

Labor senators Sam Dastyari and Jenny McAllister say they do not understand how Callaghan arrived at his conclusions, given he admitted in his report that some gas projects may never pay PRRT.

They will ask the senate economics references committee to invite Callaghan to appear before the corporate tax avoidance inquiry to explain himself.

“Sam and I feel very strongly that there are questions that we would like answered in relation to the Callaghan report, in relation to the PRRT,” McAllister said.



“We think there’s an opportunity for our committee to call Mr Callaghan to an inquiry.

“We’ll invite him to attend, and present a clear explanation of how he arrived at the conclusions he arrived at,” she said.

A protest on the front lawn of parliament house on Thursday, held by the Maritime Union of Australia, heard complaints from Greens and Labor senators about the PRRT regime.

Greens senator Peter Whish-Wilson told the crowd multinational oil and gas companies had accumulated $238bn of tax credits under the PRRT, meaning future tax revenues would be billions of dollars less than they should be.

“That’s 12 times the full Gonski [education] spending, that’s nearly twelve times the National Disability Insurance Scheme, five times the NBN project,” he said.

“That’s nation-building money, money for schools and hospitals, that we’re not getting.”

Jason Ward from Tax Justice Network, who has brought the public’s attention to the way the PRRT regime works, told the rally Callaghan’s PRRT review was a whitewash.

“We forced the government into calling a review [of the PRRT], unfortunately that review has sold out the Australian people for the benefit of companies like Chevron that pay nothing in tax, and will continue to pay nothing in tax,” he said.

“The failure of the government to act on this issue, in the face of clear evidence that’s in the government’s report is a national disgrace.

“Australia is becoming the world’s largest exported of liquified natural gas and we’re giving it away to Chevron, Shell, Exxon, BP, for free. We’re not likely to get anything out of this [PRRT] over the 40-year life of these [gas] projects,” he said.

After Callaghan’s review was published, the treasurer, Scott Morrison, said the government would consult on its recommendations until the end of August, and gave Treasury until the end of September to report back.

“The report emphasises that care must be taken in making any changes that could impact important projects that have made advanced plans based on existing arrangements,” Morrison said.