Australia is losing about $348.9 million every week.
How the money leaks
The weekly figure comes from research by The Australia Institute, which shows a 25% gas export tax would have brought in much more revenue than the current setup. The institute's Gas Giveaway Tracker calculates a daily loss of $49.8 million while Canberra stalls. That adds up — the group says roughly $68 billion has been missed since July 2022.
The numbers are stark. A flat 25% export tax is projected to raise about $17 billion a year, the institute found.
What advocates want
Calls for a permanent fix go beyond a one-off levy on windfall returns. Rod Sims, chair of the Superpower Institute, has argued for a Fair Share Levy modelled on Norway's approach to taxing gas profits. Sims says Australia currently takes a much smaller slice than many comparable exporters.
The difference is actually quite big. Other major fossil-fuel exporters typically capture between 75% and 90% of profits.
Australia, by contrast, shares roughly 27% through corporate tax, royalties and the petroleum resource rent tax — and only about 18% if profits are measured on a cash-flow basis, Sims wrote.
Under the Fair Share Levy proposal, Sims and his group estimate Australia would collect just under 50% of profits on average — a big step up from current receipts but still lower than some global peers. That extra take would do more than pad budgets, proponents say: it could be returned to households to blunt the cost-of-living hit from high international gas prices.
Short-term windfalls and structural problems
At peak international prices during the Russia–Ukraine war, a fair-share-style levy would have yielded about $27 billion — nearly 14 times what the PRRT typically raises in a year, Sims noted. And since the Iran crisis has driven prices higher again, there's renewed pressure to act.
But the current federal system has limits. The petroleum resource rent tax (PRRT) has been criticised as weak — Treasury observed in 2016 that firms can "defer the payment of PRRT indefinitely," a line often quoted by those pushing reform.
And when prices spike, companies that sell into global markets reap oversized profits while domestic customers face higher bills. That's prompted the Prime Minister's Department to request Treasury model additional levies, saying energy producers "should not benefit from high international prices at the expense of domestic customers."
Advocates say the government faces two options: grab the immediate windfall with a short-term levy or overhaul the tax system so Australians get a bigger share of gas profits for good. Sims and others favour the latter. They warn a temporary tax would be politically easy to kill later — and then we'd be back where we started.
The politics and the pushback
Right now, the Albanese government faces competing pressures. On one hand there's political appetite for cost-of-living relief and stronger revenue. On the other is the industry's warning that higher taxes will scare off investment and harm jobs. Industry groups point to long-term contracts, project costs and the global nature of LNG markets.
But opponents of the status quo say those arguments don't explain why Australia collects a much smaller share of upstream rents compared with Norway or the UK. They also point to who owns the gas. A large slice of projects are foreign-owned, which makes the optics worse when big profits leave and relatively little tax or royalty income flows back to Australia.
The debate goes beyond just money. It's about fairness — who gets the upside when global prices spike — and how to square domestic energy security with international markets.
How reform might look
A Fair Share Levy wouldn't simply slap a new percentage on revenue. Under the proposals floated by the Superpower Institute and others, it would tax profits defined on a cash-flow basis, similar to Norway's model. That matters because a cash-flow definition reduces the scope for firms to shelter income using accounting deductions and long depreciation schedules.
Supporters say that would stop companies from indefinitely deferring payments — a common criticism of the PRRT. It would also produce steadier receipts during price spikes, enabling the government to offer targeted rebate payments or broader household support without cutting other programs.
Some advocates want the levy to be ring-fenced for cost-of-living measures. Others prefer revenue to go straight to the budget to ease pressure on public finances. Either way, the central idea is the same: capture more of the economic rent from a resource that belongs to the public.
Numbers and trade-offs
Dr Richard Denniss, co‑CEO of The Australia Institute, says every day of delay costs tens of millions of dollars. "The longer we delay implementing a gas export tax, and the longer the government defends the failed PRRT, the more it's costing the Australian people," he said.
If the government implemented a 25% export tax tomorrow, the institute's tracker suggests immediate revenue gains and slower budget deterioration. But higher royalties and levies can complicate long-term project economics. Governments have to weigh short-term receipts against potential investor responses — and the knock-on for jobs and regional economies.
Proponents believe there's room to boost revenue without harming investment. Norway runs a high-tax system and remains a major producer. The question for Australia is whether it wants to collect a larger share of value and use it now to ease household pain, or hold onto the current setup and keep leaving money on the table.
Where this leaves Canberra
The Prime Minister's Department's request to Treasury to model additional levies signals the government is taking the political heat seriously. But modelling is one thing; action is another. A temporary windfall tax would be quicker to pass, but Sims has warned that a short-term measure is likely to be reversed once prices fall and lobbying pressure mounts.
Thing is, the fiscal math is hard to ignore. The Australia Institute's tracker translates indecision into a visible headline — hundreds of millions going uncollected every week. That makes the choice very public, and very immediate.
For now, Canberra has to decide whether it wants a quick patch or a long-term reset of how the nation captures value from gas. Either path carries trade-offs. The difference is clear in the sums on display.
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"Right now, gas companies get most of the gas they export from Australia for free, thanks to government giveaways," said Dr Richard Denniss, co‑CEO of The Australia Institute.
This article was created with AI assistance.
