‘It’s fired people up’: support grows, including within Labor, for new gas tax to curb wartime profits

The gas industry says a new tax would damage relations with Australia’s Asian trading partners. Photograph: Design Pics/Alamy View image in fullscreen The gas industry says a new tax would damage relations with Australia’s Asian trading partners. Photograph: Design Pics/Alamy ‘It’s fired people up’: support grows, including within Labor, for new gas tax to curb wartime profits Government, industry and opposition see growing public support for a new gas tax but the industry is fighting back Get our breaking news email, free app or daily news podcast The gas industry is mobilising in opposition to a potential new tax on the sector as political momentum builds – including among Labor MPs – for the Government to use the May budget to prevent producers profiting from the Middle East war. The Australian Energy Producers (AEP) chief executive, Samantha McCulloch, claimed a new tax would punish the same Asian trading partners Australia was leaning on to supply more fuel amid the global energy crisis. The gas sector was blind-sided by revelations the Treasury was modelling options for a new levy to capture windfall profits from gas and thermal coal companies, as well as potential changes to the Petroleum Resources Rent Tax (PRRT) and corporate tax. Government, industry and opposition sources believe the public mood on taxing the resources giants has shifted, giving the Albanese Government cover to pursue changes it might have considered too politically risky a few months ago. The sources point to a campaign spearheaded by independent senator David Pocock, social media influencer Konrad Benjamin of Punter’s Politics fame and progressive thinktank the Australia Institute, which has highlighted how much tax gas companies pay. Labor-aligned trade unions, the Greens and other cross-benchers are now backing a flat 25% tax on gas exports, which the Australia Institute estimates could raise $17bn per year. The campaign has enraged the gas industry, with AEP this week placing a full-page in the Daily Telegraph in an attempt to counter the line that more revenue is generated from the beer excise than the PRRT. A social media clip of Pocock asking senior public servants to compare the returns of the beer excise to the PRRT has attracted 4.2m views on Facebook, highlighting campaign’s reach. McCulloch accused the gas-tax campaign of spreading “misinformation” – a criticism backed by the shadow resources minister, Susan McDonald. “I’m sorry that Australians are not being given the opportunity to have been given the full picture by groups whose sole intention is to shut down fossil-fuel activity in this country,” McDonald said. Pocock told Guardian Australia the beer excise comparison resonated with the public, leaving gas companies to counter the changed public sentiment. “It has engaged people and it’s fired people up. You’re really starting to see the leaders are starting to feel the pressure,” Pocock said. 1:51 Ed Husic says Australia ‘begs for the scraps’ from profiteering gas companies – video “In terms of the public support for this, [there’s a] huge majority and we’re seeing the gas industry mounting all sorts of PR campaigns now to try and counter the broad understanding that this is an industry that has not given us a fair share historically and that urgently needs to change.” Labor backbencher Michelle Ananda-Rajah and former industry minister Ed Husic have publicly backed increasing taxes on gas companies. Liberal frontbencher Andrew Hastie is also open to the idea, exposing a split within the Coalition. Guardian Australia has spoken with several other Labor MPs who believe there is support within caucus for the change. One Labor MP, who spoke on the condition of anonymity, said, “I’m getting a lot of heat and I think David Pocock’s run a pretty good campaign on this.” They said reform on gas export taxes in the budget was important, but said Labor would have to go harder on gas companies than the current PRRT, or there would “not be much point”. Another Labor MP privately said there was strong community support in their electorate for an export tax, and that the issue had been brewing for a long time in their community. Another MP said there was a group who were “really keen” on an export tax, but had concerns that the public could turn against the policy if they believed it would mean household energy prices would increase. McCulloch – whose members include Woodside, Santos and Chevron – claimed a new tax would damage Australia’s reputation with its trading partners, such as Japan and South Korea, which are major importers of Australian LNG. The Japanese ambassador to Australia, Kazuhiro Suzuki, this week said a “surprise” in the form of a new tax would cause investors to shift their business to other countries, echoing a warning from the head of the International Energy Agency. Tokyo has long resisted Australian Government interventions that potentially disrupt the export market, but the ambassador’s comments were particularly significant given Anthony Albanese is attempting to leverage the relationship with Japan to secure extra fuel supplies. The prime minister this week issued a joint statement with Singapore on energy trade after a flurry of calls to regional trading partners, including Malaysia, South Korea and Japan. On Friday, Albanese made his most direct appeal yet for other countries to re-commit to a consistent flow of fuel to Australia. “Our gas exports are very important in the region, the context of our current circumstances are [that] Australia is a reliable supplier. We expect reciprocation in our economic relations,” Albanese said. Explore more on these topics Gas Oil and gas companies Labor Party Coalition Australian economy news Share Reuse this content