‘Playing us for fools’: foreign gains fuel gas tax push
Japan generates more public revenue from gas imports than the Australian government taxes exports of the valuable resource, MPs heard in a blockbuster hearing.
Building momentum behind the push for a 25 per cent tax on gas export profits, the Australia Institute has published an analysis of government revenue earned by one of the country’s largest liquefied natural gas customers.
The left-leaning think tank said that over the past five years, the Japanese government has collected an average of $1.8 billion a year from gas imports into public coffers.
This was more than the $1.4 billion collected on average annually by the Petroleum Resources Lease Tax, the Australian government’s current gas profits regime.
Approximately 40 percent of Japan’s LNG imports come from Australia.
Australia Institute co-chairman Richard Denniss told Tuesday’s hearing that charging more taxes on export profits would not increase the prices Japan pays but would instead cut into the profits made by gas exporters.
Pointing out that the oil and gas industry is paying almost $22 billion in taxes and royalties in 2024/25, Peak organization Australian Energy Producers argues that increasing taxes will deter investments in Australia and push companies to explore projects elsewhere.
Opposition resources spokeswoman Susan McDonald said major investments in gas exploration projects were supporting regional towns and local jobs.
He asked Mr Denniss what would happen if gas producers moved their business to other countries.
“They’re making fools of us,” he replied.
“When they say, ‘If you don’t give me free gas, I’ll take my bat and ball, but not your gas, I’ll go somewhere else.’
A wide-ranging group, including Liberal industry spokesman Andrew Hastie, Commonwealth Bank chief executive Matt Comyn and Labor backer Ed Husic, backed increasing taxes on gas exporters in the May budget.
Multinational gas companies have enjoyed a “sweet deal” for too long, Mr Husic told ABC radio on Tuesday.
The former industry minister said it would be a missed opportunity if a tax on gas exports was not introduced in the budget.
Greg Bourne, the former chairman of BP Australasia and energy adviser to then British prime minister Margaret Thatcher, will tell a Senate inquiry that governments have failed to give Australians a fair share of gas resources.
Mr Bourne, who is now a member of the Climate Council, said governments had struck a “Faustian bargain” with the gas industry and the average Australian had little to show for it.
“You end up owing money to companies and very little money is actually coming to the Australian people,” he told AAP.
Mr Bourne added that the government should ignore threats that the industry would walk away.
Viable gas projects are becoming increasingly scarce, he said, and demand for fossil fuels will decline in the coming years as the world shifts to renewables and battery storage.
Shell will send its most senior executive in Australia to head up the investigation, but other firms will send lower-level executives or policy staff.
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