Gas tax: How beer fuelled a debate on Australia's energy giants

Had the government succeeded in implementing such a tax back then, Henry argued, Australia would have earned tens of billions of dollars by now and the money could have been used to build a fund for future generations.He described Australia's taxes on its gas industry as such:"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. None of you would be stupid enough to do that."Japan makes more revenue from Australian gas - by taxing imports - than Australia itself does, according to progressive public policy think tank the Australia-institute" class="entity-link entity-organization" data-entity-id="38896" data-entity-type="organization">Australia Institute.It estimates that a 25% tax on gas exports would raise A$17bn (£9bn, US$12) a year.GettySenator David Pocock (second from left) with Konrad Benjamin (second from right) have campaigned for a 25% tax on gas exportsArguments such as these have increasingly caught the attention of Australians. According to one poll last week, 57% of voters are in favour of a tax on gas exports, with only 12% opposed.Headlines over the past year have made repeated references to Norway's US$2tn sovereign wealth fund, with envious Australians decrying their government's lack of foresight in building a fund that could pay for more generous parental leave, free tertiary education and healthcare, for example.Like Norway, Australia is rich in natural resources, but its sovereign wealth fund only had A$267bn as of December 2025 - less than 10% of Norway's for a population five times as big.Konrad Benjamin, a former teacher turned YouTuber who comments on politics and also testified at the senate hearing, regularly clocks up hundreds of thousands of views for his social media videos calling for a gas tax."My year 10 business students understand: if something is profitable and we're holding all the levers of power - look around. How many stable democracies have the many resources that we have? How are we getting such a dud deal?" he asked senators.Giving away gas 'for free'Even as gas exports have rocketed - peaking at A$90bn in 2023 during the Ukraine war - and domestic gas prices soared over the last decade, the Petroleum Resource Rent Tax (PRRT), which applies to offshore oil and gas producers, is expected to raise about A$1.5bn in the financial year 2025-26.In contrast, beer tax is expected to bring in A$2.7bn.Multinational Shell paid PRRT on the country's largest gas project, Gorgon, for the first time in a decade last year - just A$109m on revenue of A$2.5bn.Australia's tax code has "generous" provision for energy companies, says Samantha Hepburn, a professor at Deakin University specialising in natural resource law.This means, for example, they can deduct the cost of investment in developing projects against tax and carry forward those credits against future profits."Gas is in a particularly favourable position because of the significant upfront costs associated with construction and drilling and the other infrastructure," Hepburn says. "And that means that they can keep uplifting those expenses against future profits in a way that other resource or mining resource sector companies haven't necessarily been able to do."GettyThe Gorgon liquefied natural gas facility on Barrow Island.Like other companies, gas companies also pay company and payroll tax. But the difference is they are using a public resource, Hepburn says, and though some onshore gas projects pay royalties for using the resources, it is a small amount compared to what a tax on profits would bring in.This, along with the tax perks, is the basis for claims that Australia is giving away its gas "for free".Shell has said that in addition to investing US$60bn in Australia since 2010, it has paid A$12bn in Australian taxes in the past decade.It also argued that countries like Norway have a different model, whereby the state is a direct investor in energy projects and takes on some of the risks involved, unlike Australia.Chevron, which holds the largest share in the Gorgon gas project, says that Australia needs "stable business settings" to ensure future investments across all industries. It claims that a gas tax could undermine that goal and threaten the country's own domestic supply.Santos further argued that Australia's reputation for stability has already been damaged by the 25% tax proposal.A world no longer playing by the rulesPrime Minister Anthony Albanese has dismissed the comparisons made to beer tax as "complete fantasy", arguing the gas sector paid A$22bn in tax last year.He also appears to have already ruled out a gas export tax in next week's budget, telling a gathering of mining and energy executives last week that the government would not do anything to "undermine existing contracts on gas exports."Albanese, who recently embarked on a tour of Asian countries in a bid to secure future fuel supplies, argued that gas exports were "directly linked to our national fuel security" and that "the middle of a global fuel crisis is the worst possible time to jeopardise these partnerships, or the investment that underpins them."GettyMultinational Shell paid A$109m on revenue of A$2.5bn on the country's largest gas project, Gorgon, last year.He has also previously said that "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… we wouldn't be having a debate."But Australia would not be breaking any contracts by imposing a gas export tax, says John Quiggin, a professor of economics at the University of Queensland."There's no way a gas exporter can sign a contract that promises that tax policy won't change," he says.Quiggin further adds that all of Albanese's "running around" won't "make that much difference in the end because these things are determined by markets". He is also sceptical of the claim that investors would be scared away: "Where are they going to go?"Quiggin notes that other countries aren't playing by the rules like they used to - pointing to US President Donald Trump, who last year unilaterally imposed tariffs on countries around the world."That kind of argument really belongs to the past," he says, noting the idea that foreign investors "have to be treated with kid gloves or they run away... no longer has much force".Hepburn further notes that such an argument - that foreign companies won't invest in new gas projects - ignores Australia's climate targets, which include reducing greenhouse gas emissions to net zero by 2050. "The perspective there is that we can't really be opening up new gas projects," she says.While the gas tax is unlikely to be introduced in the budget, the consensus among political observers is that it will eventually become inevitable given its popularity with voters across the political spectrum - from the Greens on the left to One Nation on the right.Pocock and his supporters, meanwhile, have vowed to continue with their campaign. On Tuesday, he tweeted: "The pressure on government to act is growing and, at some point, the prime minister has to put Australia first."