Australia’s gas exports tax is back in the spotlight as the Labor Party prepares to vote on a platform amendment that could lead to a 25% levy on liquefied natural gas (LNG) shipments. The proposal, championed by the ACTU, aims to ensure Australians receive a fairer return from their natural resources while maintaining the country’s role as a reliable energy supplier.
Why a 25% Gas Exports Tax Matters
The Australian economy has experienced an LNG export boom over the past 25 years. In 2025–26, LNG exports reached $52.6 billion more than in 2000–01 – a staggering 1,968% increase. Yet tax revenue from the petroleum resource rent tax (PRRT) has actually declined by $979 million (41% drop) over the same period. This disconnect has fueled demands for reform.
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Currently, 56% of LNG exports come from offshore fields that are royalty-free, and companies like Inpex have paid zero PRRT and zero royalties despite exporting $195 billion worth of LNG. A 25% tax on gas exports could redirect billions of dollars back into public services.
What a New Gas Tax Could Fund
Projected revenue from a 25% gas exports tax varies, but estimates suggest it could raise $5–$10 billion annually. Here’s how that money could be allocated:
| Area | Potential Funding |
|---|---|
| Renewable energy transition | $3 billion/year for solar, wind, and battery storage |
| Healthcare & hospitals | $2.5 billion/year to reduce wait times |
| Housing affordability | $1.5 billion/year for social housing |
| Education & vocational training | $1 billion/year for TAFE and university places |
| Infrastructure | $2 billion/year for roads and public transport |
Key Takeaways
- A 25% tax on gas exports would address the PRRT’s failure to capture adequate revenue from the LNG boom.
- Australian taxpayers currently subsidize multinational gas companies through complex accounting loopholes.
- The proposal has broad support from unions and progressive groups but faces opposition from industry lobbyists.
- Revenue could be used to accelerate the renewable energy transition and ease cost-of-living pressures.
- Reform is politically sensitive within the Labor Party, balancing economic growth with fair taxation.
FAQ
FAQ
How does the PRRT currently work?
The PRRT taxes profits from oil and gas projects, but companies can deduct capital costs and operating expenses. Because LNG projects are capital-intensive, many never pay PRRT, as these deductions can stretch indefinitely.
Would a 25% gas exports tax hurt Australia’s energy exports?
Proponents argue that the tax would only apply to super-profits and would not deter investment, since Australia’s proximity to Asian markets and stable regulatory environment remain attractive. The proposal also includes provisions to maintain Australia’s reputation as a reliable supplier.
What happens if the Labor Party approves the platform change?
The change would commit the party to developing a specific tax policy, likely a 25% levy on gross LNG export revenue. It would then need to be legislated if Labor wins government, facing fierce opposition from the gas industry and some coalition MPs.
How does the 25% tax compare to other countries?
Norway imposes around 78% effective tax on oil and gas profits, while Qatar and the US have lower rates. A 25% levy on gross export value is moderate by global standards, but significantly higher than Australia’s current effective rate of near zero for many projects.
The debate over Australia’s gas exports tax is far from settled, but the pressure on Labor to deliver a fairer return is mounting. If implemented, a 25% tax could reshape the federal budget for decades. For now, all eyes are on the ALP national conference.
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