Highlights

  • The Greens say a 25% gas export tax would raise $17 billion a year toward their $22 billion package.
  • Reported figures leave a $5 billion annual gap, with other gas and mining measures not yet detailed.
  • Gas producers already pay 30% company tax, and many offshore projects also face a 40% Petroleum Resource Rent Tax.
  • A $17 billion yield at a 25% rate would need roughly $68 billion in taxable gas exports.

Sixty-eight billion dollars. That is roughly the value of gas exports a 25% tax would need to catch to raise the $17 billion a year that Greens leader David Shoebridge is promising. He named the tax on 28 October as the main funding source for a $22 billion-a-year package of tax cuts and payment increases, launched at the National Press Club. It is a minor-party proposal, not legislation, and the government has not adopted it. With fuel prices pushing inflation to 4.3%, the taxation of energy exporters is back in the spotlight.

The package and the $5 billion gap

The Greens' first major policy under Mr Shoebridge would raise the tax-free threshold from $18,200 to $26,000, worth up to $1,092 a year, and add $21 a week to income support payments including JobSeeker, student and carer payments and the Age Pension. The Parliamentary Budget Office (PBO) costed the package at $22 billion a year.

The Greens say "rivers of gold" from gas and mining would pay for it.

Does $17 billion cover the cost? Not on its own. Against a $22 billion package, the export tax leaves a $5 billion annual shortfall. The reference to gas "and mining" hints at other measures, but none were detailed. The two numbers also have different owners: the independent PBO is the source of the $22 billion, while the $17 billion comes from Mr Shoebridge, and it is unclear whether the PBO costed it separately.

How gas is taxed now

The Greens and The Australia Institute argue gas exports are under-taxed, yet producers already face several layers. Large companies generally pay income tax at 30%. Many offshore projects also pay the Petroleum Resource Rent Tax (PRRT), a profits-based levy of 40% once project profits pass certain thresholds. Projects in state areas, mostly onshore, pay royalties to state governments.

Changes legislated in 2023 limited how much of an LNG project's PRRT receipts can be offset by deductions, bringing payments forward. The Greens would go further by taxing the export itself.

What 25% of exports looks like

Picture a hypothetical LNG exporter shipping $10 billion of gas in a year. A 25% levy on export value would cost it $2.5 billion. Working backwards, $17 billion a year at 25% needs a taxable base of about $68 billion in gas exports.

A tax on value rather than profit behaves differently from PRRT. On that design, the $2.5 billion bill would fall due whether or not the project made a profit that year. The tax base, deductions and interaction with company tax and PRRT were not set out, and revenue would move with global gas prices and export volumes, so any annual figure is a projection, not a guarantee.

Energy prices set the scene

Treasurer Jim Chalmers said on 28 October that Brent crude futures averaged US$107 a barrel in October, against about US$70 before the Middle East conflict. The ABS reported annual CPI inflation of 4.3% in the year to September. Automotive fuel rose 9.4% in September alone and is up 23.6% over the year, while electricity is up 12.8%, which the ABS said was "largely due to the ending of Commonwealth electricity rebates".

Senate leverage

Labor controls the House but needs the Greens or the crossbench to pass legislation in the Senate. The Greens have threatened to withhold support for the government's R&D tax incentive changes unless oil and gas companies are excluded from roughly $350 million a year in R&D tax credits.