Australia Debates 25% Tax on Gas Exports Ahead of Federal Budget

A senate hearing in February highlighted that Australia receives more tax revenue from beer than from its gas exports. Independent Senator David Pocock asked how one of the world's largest gas exporters collects less tax from gas than from beer, a moment that has since received almost 10 million views on Instagram.

The exchange has added momentum to a campaign urging the introduction of a 25% tax on gas exports. The Australia Institute estimates such a tax would raise A$17 billion a year. Japan currently makes more revenue from Australian gas by taxing imports than Australia receives from its own exports.

Supporters of the tax compare Australia's approach to Norway, which has built a sovereign wealth fund worth US$2 trillion. Australia's fund stood at A$267 billion as of December 2025. Campaigners argue that higher taxes on gas could help fund services such as parental leave, education and healthcare.

The Petroleum Resource Rent Tax on offshore oil and gas is forecast to raise A$1.5 billion in the 2025-26 financial year. Beer tax is projected to generate A$2.7 billion in the same period. Shell paid A$109 million in Petroleum Resource Rent Tax on its Gorgon project last year, on revenue of A$2.5 billion.

These include the ability to deduct investment costs and carry forward credits against future profits. Hepburn noted that gas projects benefit particularly from this treatment due to high upfront costs. Shell stated that it has invested US$60 billion in Australia since 2010 and paid A$12 billion in Australian taxes over the past decade.

The company said Norway's model involves direct state investment and risk-sharing, unlike Australia's approach. Chevron, the largest partner in the Gorgon project, called for stable business settings to support future investment.

Minister Anthony Albanese has ruled out a gas export tax in next week's federal budget. He said the gas sector paid A$22 billion in tax last year and that the government would not undermine existing export contracts. Albanese argued that gas exports are linked to national fuel security, particularly amid a global fuel crisis.

"There's no way a gas exporter can sign a contract that promises that tax policy won't change," he said. Quiggin added that investment decisions are ultimately determined by markets. The debate occurs as domestic gas prices have risen over the past decade even as export values peaked at A$90 billion in 2023.

A poll last week found 57% of voters support a tax on gas exports while 12% are opposed. The issue is expected to continue receiving attention after the federal budget. >"Imagine if I were to come to you ... and put this proposition to you: I'll sell your house and I'll give you 30% and I'll keep the other 70%, and you should be happy with that because I've just converted an asset into cash.