Taxing Big Gas greed: why it makes sense and why Albo must act now
By Annika Reynolds
The Albanese Government currently has both the social license and the numbers to introduce a long-overdue tax on the gas export industry, but it continues to hesitate. As the global energy crisis worsens, it’s everyday Australians who are paying the price, writes ACF’s National Climate Policy Adviser, Annika Reynolds.
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The gas export industry has been ripping off Australians for years, extracting gas without properly paying for it and leaving Australians to bear the costs of fossil fuels polluting our environment, causing higher bills and a rising cost of living.
The Albanese government currently has an opportunity to stop Big Gas greed, but it continues to hesitate. In the meantime? We pay the price. A hefty $350 million dollars a week, to be exact.
Australians from all walks of life and from every political persuasion support this sensible tax reform, and that’s why the push for a flat 25% gas exports tax is gaining unstoppable momentum.
We know the government is thinking about repairing this broken tax system, and it’s got broad support inside the halls of parliament. Now all we need is the Prime Minister to stand on the side of Australians – not multinational climate-wrecking corporations.
In recent weeks, the horrifying US war on Iran has caused energy and petrol prices to skyrocket, delivering huge windfall profits to the multinational gas extraction industry in Australia. The exact thing occurred when the Russo-Ukrainian war escalated in 2022.
For gas producers abroad, like the UK or Norway, this spike in global gas prices will result in significant increases to government revenue. Why? These countries have strong royalties laws in place that ensure gas producers pay a fair price for resources.
For Australia, the situation is more complicated. The federal government’s Petroleum Resource Rent Tax (PRRT), the royalties regime for offshore gas, contains loopholes that allow multinational gas companies to minimise or entirely avoid paying for exported gas.
The gas industry paid less than $1.5 billion in PRRT in 2024-2025, but made around $65 billion in revenue . All up, it equals just 2% in federal revenue collected for the value of gas exported.
According to government budget papers, Australian teachers and nurses pay more in income tax than the gas industry pays in royalties for gas under the PRRT.
The push for a 25% gas export tax
It’s time to stop Big Gas greed and make gas corporations pay a fair price for the gas they are exporting. ACF is calling for a flat 25% tax on gas export revenue, to be applied to all LNG exports leaving Australia. We’re not alone, the ACTU, ACOSS and several more organisations are also calling out Big Gas greed.
With the backing of these groups and support from the Greens and crossbench, the Albanese Government has both the social license and the numbers to pass this tax reform through parliament. It just needs to rise to the occasion. And what better time, when so many Aussies are feeling the pinch with a skyrocketing cost-of-living crisis.
How a 25% tax on gas exports can be used to provide cost-of-living relief
A 25% tax on gas exports would generate significant revenue for the Federal government. It would allow Prime Minister Albanese to invest in real cost-of-living relief for ordinary Australians. A flat tax rate also enables the government to capture some of the windfall profits that gas corporations are making right now during the war in the Middle East.
A 25% tax on gas exports would raise around $17 billion and could be funnelled into real cost-of-living relief, healthcare and education. The return could be much higher in periods during price shocks. For example, during 2022, a 25% tax on gas exports would have captured and redirected around $23 billion of big gas profits back into the public purse.
More than 60% of the Australian public agrees the Albanese government should change the law so gas giants are taxed a flat 25% for gas exports.
A 25% tax on gas exports will not impact domestic gas prices or supply
This proposed tax won’t increase the price of gas sold in Australia, in fact, it’s likely to push prices down. It’s likely gas exporters would compete to avoid paying the export tax by diverting gas supply to the domestic market.
Around 80% of the gas extracted in Australia is sent overseas. Astonishingly, more gas is used by the gas industry to process gas into liquified natural gas (LNG) for export than all gas used by Aussie manufacturers.
Importantly: we do not need new polluting gas projects to meet the low gas demand in Australia.
Gas drives climate disasters and Big Gas corporates should be paying for the harm
To keep global heating to as close to 1.5°C as possible, we must phase out fossil fuel production and its use as quickly as possible. The Albanese government should maximise the amount of tax Australians receive from existing gas production, to redirect obscene profits, instead of continuing to give away our gas resources practically for free to enable greater export of gas overseas.
Remember: no matter where in the world Australian gas is burned it returns home in the form of climate disasters – cyclones, floods, bushfires and deadly heatwaves.
Aussies are on the frontline of the climate crisis, paying the emotional and financial cost, and Big Gas greed is making matters worse. Will the Albanese government kowtow to the resources sector, or side with everyday Aussies who want Big Gas to pay its fair share?
ACF has launched a petition calling on Albo to tax Big Gas Greed. You can sign it here.
About the author
Annika Reynolds (they/them)
Annika Reynolds is a leading environmental and climate law researcher with a special focus on government environmental decision-making practices and environmental rights. Annika is the National Climate Policy Advisor at the Australian Conservation Foundation. Born at 0.9C warming, they fight to stop 1.5°C, and for a climate just future.
The article makes several extraordinarily important omissions. Firstly, it omits to mention the value of the corporate income tax that the gas exporters pay. For example, Woodside paid more that $2 billion of taxes in 2025 and had an effective tax rate of 45%. Its $2.1 billion dividend paid was full franked. The much maligned PRRT is better designed than this author gives it credit. Most of the gas fields exporting from Australia are in their very early stages of production or have only begun to approach their peak and amortise their set up costs. This means that in the coming years, the existing PRRT take will, assuming a reasonably stable gas price, increase at a compound rate. As will the corporate tax take as depreciation allowances fall. Australia needs to ensure that foreign owned companies pay the correct amount of corporate income tax. However a royalty of the size discussed will have similar results to the royalty on coal in QLD.......where mines are closing, jobs are being lost and no more taxes are being paid. The establishent and operating costs of the gas export fields and facilities are of far greater magnitude than those often referred to adjacent to Norway. This is often overlooked in the emotion surrounding this issue.
Praying this gets the bipartisan support it desperately needs