Australia debates 25% gas export tax amid budget deliberations and industry pushback
Consensus Summary
Australia’s federal government is facing pressure to introduce a 25% tax on gas exports, with a Greens-led Senate inquiry and public campaigns led by figures like independent Senator David Pocock and former Treasury Secretary Ken Henry pushing for reform. The proposed tax, estimated to raise $17 billion annually, aims to address what critics call an unfair system where gas companies exploit finite resources with minimal tax contributions. Prime Minister Anthony Albanese has rejected the idea in the upcoming May 12 budget, citing concerns about damaging trade relations with key buyers like Japan, Malaysia, and South Korea, and the need to maintain reliable fuel supplies amid global energy crises. The gas industry argues it already pays $20–$22 billion in taxes and royalties annually and warns higher taxes could deter investment, with reports like Wood Mackenzie’s suggesting such a tax would make Australia unappealing for new projects. Meanwhile, the Petroleum Resources Rent Tax (PRRT), once a global leader, now raises only around $1 billion yearly despite gas exports peaking at $90 billion in 2022. The debate has split Labor’s caucus, with unions, climate groups, and crossbenchers demanding action, while industry allies and state premiers like Roger Cook of Western Australia oppose the tax. The government has instead focused on an east-coast gas reservation policy to secure domestic supply, though public outrage and polling suggest the issue is resonating widely.
✓ Verified by 2+ sources
Key details reported by multiple sources:
- Former Treasury Secretary Ken Henry urged a 25% gas export tax during a Senate inquiry on April 24, 2026, calling it 'in the national interest' and stating 'just do it, and stop the crap that the Australian public have put up with for decades now'.
- Prime Minister Anthony Albanese ruled out a 25% gas export tax in the upcoming May 12, 2026 federal budget, citing concerns about alienating key buyers like Japan, Malaysia, and South Korea.
- The Australia Institute estimates a 25% gas export tax could raise $17 billion annually for Australia.
- The Petroleum Resources Rent Tax (PRRT) raised only around $1 billion in 2025, despite gas exports peaking at $90 billion in 2022 due to Russia’s invasion of Ukraine.
- Gas exports generated $65 billion in national income in 2025, down from a peak of $90 billion in 2022.
- The gas industry claims it pays around $20–$22 billion annually in taxes and royalties, according to Australian Energy Producers (AEP).
- Shell Australia paid $109 million in PRRT in 2025 but confirmed it paid zero in PRRT for the previous decade.
- The Greens-led Senate inquiry into gas taxation is examining a 25% export tax and other reforms, with submissions from figures like Ken Henry and Richard Denniss.
- Independent Senator David Pocock has been a vocal advocate for a 25% gas export tax, accusing the government of 'caving to gas companies'.
- The government has committed to an east-coast gas reservation policy to ensure domestic supply, similar to Western Australia’s long-standing scheme.
Points of Difference
Details reported by only one source:
- Ken Henry compared the current gas tax system to selling someone’s house and keeping 70% of the proceeds, saying 'None of you would be stupid enough to do that'.
- The Wood Mackenzie report, commissioned by Energy Producers Australia, claims a 25% export tax would make Australia the 'worst place on Earth' to invest in gas, with total taxes reaching 82.6%.
- The Australia Institute’s Richard Denniss argued the PRRT could have raised $15 billion in 2025 if it worked as intended, instead of the $1.5 billion it actually collected.
- The gas industry spent around $1 million each from seven major exporters on an advertising campaign to fight the proposed tax.
- Chevron faced a $300 million tax avoidance win from the Australian Tax Office almost a decade ago, and gas exporters have faced criticism from three prime ministers (Turnbull, Morrison, Albanese) for prioritizing exports over domestic supply.
- A drone image of Chevron’s Gorgon project on Barrow Island, Western Australia, was included in the ABC article.
- David Pocock accused Albanese of 'caving in' to gas companies and claimed the government was ignoring public outrage, comparing gas taxation to giving resources 'for free'.
- Greens leader Larissa Waters called the decision to reject the tax a 'choice to deliver for the greedy gas corporations' and accused Albanese of prioritizing 'obscene wartime profits'.
- The government released the Economic Inclusion Advisory Committee report on April 25, 2026, recommending a 90% increase to Jobseeker, which Pocock said could be funded by the gas tax.
- Labor’s environment action network (Lean) urged a 'very substantial tax' on windfall profits, aligning with Labor’s national platform.
- Opposition leader Angus Taylor opposed the 25% tax, calling it a threat to the gas industry, while Liberal frontbencher Andrew Hastie supported it.
- WA Premier Roger Cook opposed the tax, stating it would not be good for Western Australia.
- The Superpower Institute, backed by Ross Garnaut and Rod Sims, proposed a 40% cashflow levy ('fair share levy') to replace the PRRT.
- Resources Minister Madeleine King dismissed the idea that gas industry profits were 'free', stating 'hundreds of billions of dollars' of investment had delivered domestic gas supply and jobs.
- Gas giants made $149 billion in profits from exports since 2022, according to research cited by News.com.au.
- Nationals leader Matt Canavan argued a 25% tax would be unsustainable for businesses and called for productivity increases instead of higher taxes.
Contradictions
Conflicting information between sources:
- The ABC states gas companies paid $20 billion in tax annually, while the Guardian notes Albanese cited $22 billion from Australian Energy Producers, which includes royalties, not just taxes.
- The Guardian claims the government has 'all but ruled out' a 25% export tax, while the ABC states Albanese is 'poised to kill off' the move, with no serious consideration in cabinet.
- The ABC reports gas exports peaked at $90 billion in 2022, while the Guardian does not specify a peak year but references the global oil crisis and Iran war as factors reducing appetite for new taxes.
- The Guardian mentions a 'global energy crisis sparked by the Iran war' as a reason for diminished appetite for gas tax reforms, while the ABC focuses on the Middle East conflict and diplomatic efforts in Asia.
- The Australia Institute’s $17 billion estimate for a 25% tax is cited by both ABC and Guardian, but the ABC notes Wood Mackenzie’s report claims such a tax would make Australia ‘uninvestable,’ while the Guardian does not engage with this specific industry counterargument.
Source Articles
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Labor under internal pressure on gas tax as influencer says government ‘stopped working for the punters’
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