One Nation proposes replacing PRRT with wellhead royalties and government equity stakes
Updated ,first published
One Nation leader Pauline Hanson will unveil a plan to tear up Australia’s offshore gas tax system and replace it with production concessions and taxpayer equity in LNG projects in a major interventionist proposal aimed at boosting production and returning profits to public pockets.
One Nation’s proposal would abolish the oil resource lease tax and impose a 10 per cent wellhead royalty on all offshore gas and oil production, while creating a Commonwealth co-investment scheme under which the government would take an ownership stake in new developments in exchange for early exploration funding.
The plan comes at a time when public support is growing for increasing taxes on gas companies, amid debate over east coast supply constraints and how Australia should strike a balance between attracting investment from its status as one of the world’s largest LNG exporters and capturing more public value.
Hanson will launch the policy with a speech at the Australian Energy Producers conference in Adelaide on Thursday. He will be given the platform alongside federal Labor Minister and Liberal leader Angus Taylor, a reflection of the growing interaction between corporate Australia and One Nation, as the populist party maintains a strong position ahead of the Coalition in the polls and seeks to strengthen its negotiating influence in the government’s next term by increasing its numbers in the Senate.
Hanson, along with Barnaby Joyce, who has left One Nation, has consulted widely with the industry on its bid over the past few months; This included a virtual meeting in early May with leading CEOs and industry leaders where business figures were briefed on the new platform.
Drawing heavily on Norway, where the state combines taxation with equity participation and channels returns into a sovereign wealth fund, Hanson’s policy argues that Australia has failed to transform its resource base into long-term national wealth despite decades of LNG exports. It also echoes calls for “drill baby, drill” from leading proponent Gina Rinehart, who owns a majority stake in Queensland gas producer Senex.
According to the proposal circulating in industry circles and seen by this imprint, the oil resource rent tax for offshore projects will be abolished and replaced by a concession right applied at the point of extraction.
One Nation says this will provide a more predictable revenue stream, avoiding the long delays and complex outages that leave the current system dependent on project profitability rather than production. It argues that the current regime allows companies to significantly reduce or delay their tax liabilities through capital write-offs, step-ups and losses carried forward, meaning large LNG projects could generate significant export revenue long before the Commonwealth sees meaningful returns.
While some industry figures privately dismissed the policy platform as politically extreme and unachievable, Hanson’s entry into the policy debate was welcomed by a senior gas industry source, who said: “At least One Nation seems to understand the future.”
Probability is an industry term that refers to the likelihood of a geographic area producing valuable resources such as oil.
Hanson flagged the policy after his party’s historic victory in the Farrer by-election in NSW; where David Farley became the first One Nation candidate to win a House seat during the election.
“What I want is a system where we own some of the equity interest in gas exploration, so we’re not going to let them take that away,” Hanson said that night.
Although both major parties have resisted growing campaigns to increase taxes on gas companies, their relations with the industry remain strained. Prominent social media influencer Konrad Benjamin, a former school teacher whose Punter’s Politics initiative has almost 1 million social media followers, warned Labor last month not to underestimate public anger at the current regime.
Alongside the tax overhaul, Hanson proposes a new Commonwealth “offshore resource participation scheme” under which the federal government would jointly fund exploratory drilling and seismic work in exchange for equity stakes in any project that reaches production.
The model will see the Commonwealth take ownership stakes in multi-billion dollar LNG developments, sharing upfront risk and long-term returns. Under this approach, the federal government would contribute to exploration and evaluation costs, estimated at $500 million annually, in exchange for a proportionate share of production revenue and asset value increases if the discoveries were commercialized.
The plan was designed as a way to transform Australia’s resource base into a long-term financial asset, with returns channeled into a sovereign-style fund modeled on Norway’s $2 trillion government pension fund. A leaked version of this quote first reported by Australian last month.
“We hear that the oil and gas giants are making money hand in hand, let’s not shut them down, let’s make money too,” the policy document states.
MST Marquee energy analyst Saul Kavonic said the shift would significantly expand the state’s role in investment decisions in the sector, raising questions about efficiency, risk and whether it would ultimately deter private capital.
“[It] Kavonic said it would give the government more control over oil and gas investments and sales with less transparency. “This can and will be used to halt investment in our resources under Labor or Green-influenced governments.”
This, he said, would lead to billions of taxpayer dollars being wasted on failed exploration.
“Most exploration wells fail,” he said. While adding a 10 percent royalty to the wellhead value may seem significant, it would likely mean a lower effective load than current regulations.
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Rob Harris is a national correspondent for The Sydney Morning Herald and The Age, based in Canberra. He is a former European correspondent.Connect via email.
Nick Toscano is an economic correspondent for The Age and the Sydney Morning Herald.Connect with: X or email.
