Japan is earning more public revenue on its gas imports than the Australian government is raising taxing exports of the valuable resource, parliamentarians have heard in a blockbuster hearing.
With momentum building behind a push for a 25 per cent tax on gas export profits, The Australia Institute has released analysis of government revenue earned by one of the nation’s top liquefied natural gas customers.
Over the past five years, the Japanese government had raised an average $1.8 billion annually from gas imports for its public coffers, the left-leaning think tank said.
That was more than the $1.4 billion raised annually, on average, by the Australian government’s existing gas profits regime, the Petroleum Resource Rent Tax.
About 40 per cent of Japan’s LNG imports are sourced from Australia.
Collecting more tax on export profits would not push up prices paid by Japan, The Australia Institute’s co-chief, Richard Denniss, told the hearing on Tuesday, but would instead clip the profits made by gas exporters.
Peak body Australian Energy Producers, which points out the oil and gas industry paid almost $22 billion in taxes and royalties in 2024/25, argues raising taxes would discourage investment in Australia, pushing companies to explore projects elsewhere.
Opposition resources spokeswoman Susan McDonald said major investments in gas exploration projects were supporting regional towns and local jobs.
She asked Mr Denniss what would happen if gas producers took their business to other countries.
“They are playing us for fools,” he replied.
“When they say, ‘if you don’t give me free gas, I’ll take my bat and ball, but not your gas, and go somewhere else’.”
A broad array of crossbenchers, Liberal industry spokesman Andrew Hastie, Commonwealth Bank chief executive Matt Comyn and Labor backbencher Ed Husic have supported raising taxes on gas exporters in the May budget.
Gas multinationals had enjoyed a “sweet deal” for too long, Mr Husic told ABC radio on Tuesday.
The former industry minister said it would be a missed opportunity if a tax on gas exports wasn’t imposed in the budget.
Greg Bourne, a former president of BP Australasia and an energy adviser to then-British prime minister Margaret Thatcher, will tell the Senate inquiry that governments have failed to deliver the Australian people a fair share of gas resources.
Mr Bourne, now a member of the Climate Council, said governments had made a “Faustian bargain” with the gas industry and the average Australian had little to show for it.
“You become beholden to the companies and very little money actually comes to the Australian people,” he told AAP.
The government should ignore the industry’s threats that it would walk away, Mr Bourne added.
Viable gas projects were becoming increasingly scarce and demand for fossil fuels was set to decrease in coming decades as the world transitioned to renewables and battery storage, he said.
Shell will send their most senior executive in Australia to front the inquiry, but other firms will send lower-ranking executives or policy staff.
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