Foreign Companies Are Making Billions Off Australia’s Gas. It’s Time that Changed

Why It Matters

A robust gas export tax would secure a fair share of resource revenue for Australians and help lower domestic energy costs, while reshaping the investment landscape of the country’s energy sector.

Key Takeaways

• Australian gas exporters earned ~A$149bn (≈US$98bn) in four years.
• 25% export tax could raise ~A$17bn (≈US$11bn) yearly.
• Current PRRT allows deductions, letting firms pay little tax.
• Domestic gas reservation rules start 2027 to curb exports.
• Norway taxes 78% of petroleum profit, funding $2tn sovereign fund.

Pulse Analysis

Australia’s liquefied natural gas (LNG) surge has turned the nation into a top global exporter, but the bulk of the windfall flows to foreign corporations. Over the last decade, these firms have amassed roughly A$149 billion (about US$98 billion) in export profits, while the existing Petroleum Resource Rent Tax (PRRT) – capped at 40% – is softened by generous uplift allowances and immediate deductibility of capital spend. This tax architecture effectively lets many projects report near‑zero taxable income, prompting calls for a more straightforward levy that captures value at the point of export.

Policy makers are now championing a flat 25% tax on the value of exported gas, a measure projected to generate A$17 billion (≈US$11 billion) each year. Beyond bolstering the federal budget, the revenue could fund universal childcare, tertiary education, or debt reduction, and the tax’s design would limit loophole exploitation. International benchmarks, such as Norway’s combined 22% corporate and 56% special petroleum taxes that tax roughly 78% of profits, illustrate how resource‑rich nations can convert extraction into sovereign wealth, with Norway’s fund now worth over $2 trillion USD.

The proposal faces resistance from industry groups warning that higher taxes could deter new investment, shrink job creation, and erode Australia’s reputation as a stable energy hub. Critics also argue the tax may push exporters toward lower‑cost competitors like Qatar. Nonetheless, public support remains strong, especially as domestic gas prices climb amid global volatility. With mandatory gas‑code provisions already requiring domestic supply offers and a 2027 reservation rule on the horizon, the export tax debate marks a pivotal moment in aligning Australia’s resource wealth with broader economic and social goals.