Gas Industry Mobilises Against New Tax as Political Support Grows
The Australian gas industry is intensifying its opposition to a potential new tax on the sector, arguing that such a measure could severely damage relations with key Asian trading partners. This comes as political momentum builds, including among Labor MPs, for the government to use the upcoming May budget to prevent producers from profiting excessively from the Middle East war.
Industry Warns of Trade Fallout
Samantha McCulloch, chief executive of Australian Energy Producers (AEP), has claimed that a new tax would punish the same Asian trading partners that Australia is relying on to supply more fuel amid the global energy crisis. The gas sector was caught off guard by revelations that the Treasury is modelling options for a new levy to capture windfall profits from gas and thermal coal companies, alongside potential changes to the Petroleum Resources Rent Tax (PRRT) and corporate tax.
Government, industry, and opposition sources indicate that the public mood on taxing resources giants has shifted, providing the Albanese government with political cover to pursue changes that might have been considered too risky just months ago. This shift is attributed to a campaign led by independent senator David Pocock, social media influencer Konrad Benjamin, and the progressive thinktank the Australia Institute, which has highlighted the tax contributions of gas companies.
Growing Political Backing for Tax Reform
Labor-aligned trade unions, the Greens, and other cross-benchers are now supporting a flat 25% tax on gas exports, estimated by the Australia Institute to raise $17 billion annually. The campaign has sparked outrage in the gas industry, with AEP placing a full-page advertisement in the Daily Telegraph to counter claims that more revenue comes from beer excise than the PRRT.
A social media clip of Pocock questioning senior public servants about this comparison has garnered 4.2 million views on Facebook, demonstrating the campaign's widespread reach. McCulloch accused the gas-tax campaign of spreading misinformation, a criticism echoed by shadow resources minister Susan McDonald, who argued that Australians are not getting the full picture from groups aiming to shut down fossil-fuel activity.
Public Sentiment and Political Pressure
Pocock told media outlets that the beer excise comparison has resonated with the public, forcing gas companies to counter the changed sentiment. He noted that the campaign has engaged and fired up people, putting pressure on political leaders. Labor backbencher Michelle Ananda-Rajah and former industry minister Ed Husic have publicly backed increasing taxes on gas companies, while Liberal frontbencher Andrew Hastie is also open to the idea, revealing a split within the Coalition.
Several other Labor MPs have expressed support within caucus for the change, with one anonymous MP stating they are receiving significant feedback and praising Pocock's campaign. They emphasised that reform on gas export taxes in the budget is crucial, but warned that Labor must go harder than the current PRRT to be effective. Another MP noted strong community support in their electorate for an export tax, though concerns remain that the public could turn against the policy if it leads to higher household energy prices.
International Concerns and Diplomatic Moves
McCulloch, whose members include major companies like Woodside, Santos, and Chevron, warned that a new tax could harm Australia's reputation with trading partners such as Japan and South Korea, which are major importers of Australian LNG. Japanese ambassador Kazuhiro Suzuki recently stated that a surprise tax could cause investors to shift business to other countries, echoing warnings from the International Energy Agency.
Tokyo has historically resisted Australian government interventions that disrupt the export market, making the ambassador's comments significant as Prime Minister Anthony Albanese seeks to leverage the relationship with Japan to secure extra fuel supplies. Albanese issued a joint statement with Singapore on energy trade after calls to regional partners, including Malaysia, South Korea, and Japan, and made a direct appeal for consistent fuel flows to Australia, emphasising the importance of reliable supply in economic relations.
