Anthony Albanese has confirmed next month’s federal budget will not include a new tax on existing gas export contracts as he criticised the “populist” campaign calling for a levy on producers.
As reported last week, the prime minister was poised to reject pressure to introduce a 25% tax on gas exports amid concerns the intervention could alienate the Asian trading partners Australia is relying on for supplies of diesel and petrol.
In a speech to the Chamber of Minerals and Energy of Western Australia on Wednesday, the prime minister directly tied gas exports to Australia’s fuel security amid the global energy crisis.
The prime minister has travelled to Singapore, Malaysia and Brunei to shore up fuel supplies over the past month and will next week host the prime minister of Japan, whose country is a major importer of Australian LNG exports.
“And the middle of a global fuel crisis is the worst possible time to jeopardise these partnerships, or the investment that underpins them,” he said.
“This is why I can confirm that the budget will not undermine existing contracts on gas exports.”
Asked in a subsequent Q&A session if he could “absolutely confirm” the budget would not include any new taxes on the industry, Albanese told the miners to wait until it was handed down on 12 May.
The comments technically leave the door open to other adjustments, including changes affecting future contracts, a windfall profits tax or further amendments to the petroleum resource rent tax (PPRT) – although Guardian Australians understands the status quo remains the most likely option.
Sign up for the Breaking News Australia emailAdvocates for a 25% export tax want the new levy to replace the PRRT, which they argue is broken and failing to extract enough revenue from the gas exporters.
Albanese has sharpened his criticism of the gas tax campaign over the past week for peddling what he claimed was untrue information.
In an interview with The Daily Aus last week, Albanese said “some of the facts haven’t been out there … I’ve seen there are reports suggesting that there’s more on beer tax than gas. It’s just not true.”
At Wednesday’s event, the prime minister repeated the criticism as he defended the design of the PRRT, which Labor tweaked in 2023 in an attempt to recoup revenue quicker from offshore oil and gas projects.
The commonwealth received just $1.48bn in PRRT in 2023-24 – a fraction of export revenue – because the 40% tax only applies after capital costs are deducted and the project becomes profitable.
“One of the things about the PRRT, to go back to the dishonesty of some of the debate that’s there, the changes are designed to lift up the amount of revenue over a period of time, which makes sense, because you have an upfront investment of tens of billions of dollars, and so therefore the design is a sensible one,” he said.
“Without that investment, it’s not just about international [exports]. There’s a lot of focus on exports. Without that investment, you wouldn’t have a domestic gas reservation here in WA because you wouldn’t have the gas. And that’s a pretty important point that is lost in some of the populist rhetoric, whether it be the sort of coalition of the far left or the far right.”
Albanese also played down the prospect of a windfall profits tax, arguing gas prices hadn’t surged since the start of the Iran war in late February.
Treasury was asked to model a windfall profits tax and changes to the PRRT ahead of the budget, which raised expectations that the government was poised to act on the public pressure.
The independent senator David Pocock, who has spearheaded a campaign to implement an export tax, said the decision was “disappointing” given the significant public support.
“I think it kind of shows that we’ve won the argument that Australians want a fairer return for the export of our gas,” Pocock told ABC radio.
“We have a government who, at every turn, seems to side with multinational companies, multinational gas exporters, ahead of the Australian people saying, ‘well, just now is not the time’.”
Konrad Benjamin, the man behind the popular social media account Punters Politics, accused Albanese of calling everyday Australians dishonest.
“Politician Albanese just called every day Australians who listen to independent economists and ex-Treasury secretary Ken Henry ‘dishonest’ and ‘populist’”, Benjamin said.
The Labor MP Ed Husic vowed to keep pushing for a 25% export levy, predicting the groundswell of public support would eventually be too hard for Albanese to ignore.
Husic challenged Albanese’s description of the gas tax campaign as “populist”, noting the same label was used to described Labor’s drive for a royal commission into the banks.
“Congratulations, I have to say, to the multinational gas companies. At a time where political differences are stark, they’ve managed to unite Australians across the political spectrum, saying that they want a better deal and they want governments to hear that,” he told ABC’s Afternoon Briefing.
The Greens said Albanese’s language – which did not explicitly rule out a new tax – suggested he was “feeling the heat” from the campaign.
“The massive national momentum for a minimum 25% tax on gas exports is working,” the Greens leader, Larissa Waters, said.
Meanwhile, the Minns government in New South Wales announced on Wednesday it was opening up new areas of the state for gas exploration for the first time in more than a decade, with two areas in the far west – the Bancannia and Pondie Range troughs – to be opened for exploration.
Exploration in both areas was ruled out under the previous NSW Coalition government.
“The Minns Labor government is taking practical steps to secure a reliable, domestic supply of gas for NSW homes and industry,” natural resources minister Courtney Houssos said.
“We are creating more opportunities for NSW – strengthening energy security while supporting households, jobs, industry and economic growth.”
The Lock the Gate Alliance expressed outrage at the decision, saying it would put “communities, water and agriculture at risk”.
“This is a disastrous backflip from the NSW government, which had in 2021 listened to community concerns about gas drilling and decided to block exploration in the far west,” Liverpool Plains farmer Margaret Fleck said.
“Farmers in NSW’s northwest have been fighting Santos’ Narrabri gas project for over a decade, because we refuse to see prime farmland and water sacrificed for short-term gas extraction.”
