PM expected to reject gas tax proposal in upcoming budget

The Labor government has copped criticism from the Greens Party of Australia, with the government expected to reject any proposed changes to taxes on Australian gas exports.

The position has caught many off guard, especially considering the Senate’s weeks-old Select Committee on the Taxation of Gas Resources has not yet delivered its final recommendations, which are due on 7 May.

Designed in the 1980s and operating as a ‘super-profits’ tax, the current petroleum resource rent tax is the primary method of collecting money from offshore oil and gas projects, and has been described by the Greens Party as mere “pocket-change” for gas corporations.

In a statement on Friday (24 April), the party suggested the government is protecting gas industry profits over the cost of living or Australia’s trading partner relationships. The tax, should it be installed, would force corporations to cover the difference, leading many to question why the government is hesitating.

Leader of the Australian Greens, Larissa Waters, said, “The Prime Minister has a choice in this budget: deliver for the greedy gas corporations, or deliver for the people. If he has picked the wrong side today that will be his legacy.”

“In the same week that his government announced the largest ever cut to a government program this century in the NDIS, a devastating cut that will result in at least 160,000 people losing critical supports, the Prime Minister is sending signals that he’s going to let the greedy gas corporations continue to make obscene war time profits," she added.

Chair of the Select Committee on the Taxation of Gas Resources, senator Steph Hodgins-May, added: A minimum 25 per cent gas export tax would raise at least $17 billion a year. That’s money to ease cost-of-living pressure, properly fund public services, and accelerate the transition to clean energy.”

Similarly, independent ACT senator David Pocock urged Albanese to implement a 25 per cent tax on gas export revenue “so his government can undertake the long overdue work of lifting Australia’s children out of poverty”, citing the Economic Inclusion Advisory Committee’s findings that 1 million Australian children were living in poverty.

“We’ve seen the Prime Minister jump to the defence of multinational gas companies while ignoring the needs of the most vulnerable Australians, including the tens of thousands turning to food pantries for the first time," he said.

“The modelling the Committee has commissioned as part of this report shows that with additional revenue for fairer taxation we could easily lift more people out of poverty.”

In a television interview on Thursday (23 April) with ABC, the prime minister noted that gas corporations “pay around about $22 billion … you do need to acknowledge the tens of billions of dollars of investment that occurs in order to have that gas extracted. And without that investment that’s come from North America, that’s come from Japan in Impex’s case, then we wouldn’t be having a debate because there wouldn’t have been that extraction”.

When asked directly about ruling out a gas export tax, he responded: “We’ll have our Budget on May 12. What I do say though, is that some of the arguments that have been put forward have been a bit disingenuous, and people putting them forward know that that’s the case.”