Labor is set to reject a proposed 25% tax on gas exports, with David Pocock accusing Anthony Albanese of yielding to gas companies. The decision comes amid a global oil crisis and efforts to secure fuel supply from Asian allies.
Key points
Labor poised to reject a 25% tax on gas exports
David Pocock accuses Albanese of caving to gas companies
Decision influenced by global oil crisis
Government aims to secure fuel supply from Asian allies
Alternative tax reforms still under consideration
Mentioned in this story
Anthony AlbaneseDavid Pocock
Labor is poised to reject a growing push for a new 25% tax on gas exports in next month’s budget, prompting David Pocock to accuse the government of “caving in” to the gas industry.
It’s understood the government has elected not to pursue a new tax on gas exports in the budget, prompted in part by the global oil crisis and Anthony Albanese’s diplomatic efforts in shoring up fuel supply from Asian allies by pledging reliable access to liquefied natural gas.
The prime minister all but ruled out heeding a public campaign calling for the new tax in interviews on Thursday.
Less dramatic changes, including reforms to the petroleum resources rent tax or a tax on windfall profits, have not yet been ruled out, and there is strong support inside the Labor caucus for gas reforms.
“I am appalled but not surprised to see the Albanese government caving to gas companies,” he said.
Guardian Australia reported on Wednesday that the export tax had been all but rejected. Albanese has not publicly ruled out changes to gas tax settings but has voiced caution about the effects of any changes. In interviews published on Thursday, Albanese argued that gas corporations paid $22bn in tax last year.
Pocock noted that a similar figure was claimed by Australian Energy Producers, the peak body for the oil and gas industry, in an internal financial survey – not an official tax department document. In its submission to the gas tax inquiry, the AEP said this survey “estimated” that in the 2024-25 financial year the oil and gas industry paid $21.9bn in taxes and state royalties, not taxes alone.
Q&A
Why is Labor rejecting the new gas export tax?
Labor is rejecting the proposed 25% gas export tax due to the global oil crisis and diplomatic efforts to ensure fuel supply from Asian allies.
What did David Pocock say about Albanese's decision on the gas tax?
David Pocock accused Anthony Albanese of 'caving in' to the gas industry over the government's decision to likely reject the gas export tax proposal.
What alternative tax reforms are being considered by Labor?
Labor has not ruled out less dramatic changes, including reforms to the petroleum resources rent tax or a tax on windfall profits.
What is the public sentiment regarding the gas export tax proposal?
There is strong public support for a new gas export tax, with campaigns pushing for its implementation, despite the government's likely rejection.
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“They pay around about $22bn and importantly as well, one of the things I’ve said is that you do need to acknowledge the tens of billions of dollars of investment that occurs in order to have that gas extracted,” Albanese told the ABC on Thursday.
He wouldn’t confirm or deny if a gas export tax remained under consideration, but added: “Some of the arguments have been put forward, have been a bit disingenuous, and people putting them forward know that that’s the case.”
Pocock said an additional tax was critical to provide benefits to all Australians.
“We want a return on that resource, and yet we have a prime minister and others who are just rolling out the talking points from the gas industry,” he said.
“I don’t think we should have a system where, simply because you have an investment and you have these huge rates of compounding that investment, you get the gas for free …
“Who else in the economy gets their input for free? Builders are paying for bricks. Bakers are paying for flour. Every hard-working trader out there has to buy their materials and then pay tax. We’re giving gas away for free.”
The energy minister, Chris Bowen, told Triple J on Thursday that the government had to strike a “balance” on gas exports and taxes, saying Australian gas was important both domestically and for our region.
“You’ve got to keep all your tax settings against all the various competing things the government has to consider – our trading partners, our own interests, et cetera,” Bowen said.
“Our gas exports are very important. At the moment we are dealing with a fuel crisis where it’s very important that countries in the region work together – whether it’s fuel, liquid fuels, oil, diesel, petrol or gas, we are all in this together.”
The Greens leader, Larissa Waters, was scathing of the news on Friday and claimed that it would allow gas companies “to make obscene wartime profits”.
“The prime minister has a choice in this budget: deliver for the greedy gas corporations, or deliver for the people,” Waters said. “If he has picked the wrong side today that will be his legacy.”
The government has come under growing pressure from Labor-aligned trade unions and crossbenchers to introduce a flat 25% tax on gas exports, which the Australia Institute thinktank estimates could raise $17bn a year.
But despite revelations last month that the Treasury had been asked to model a windfall profits tax and petroleum resources rent tax changes, the appetite for major interventions appears to have diminished amid the global energy crisis.
On Friday the government released the independent economic inclusion advisory committee report, which has called for an increase to jobseeker to 90% of the age pension. Pocock said a gas export tax could more than cover the increase.
“Lifting income support to 75% of the aged pension [in the first year], which the Committee has recommended, would cost just $1.6 billion, and would ensure that children in those households have a shot themselves at being Prime Minister one day,” Pocock said.
The committee has recommended an increase in jobseeker for the last three years but has been ignored by the government. The payment is not expected to be raised in this year’s budget.
