Growing Support for New Gas Tax Amid Rising Fuel Costs

The Australian government is facing increasing pressure to implement a new tax on gas exports as political momentum builds, particularly among Labor MPs, in response to soaring fuel prices exacerbated by the ongoing conflict in the Middle East. The Australian Energy Producers (AEP) chief executive, Samantha McCulloch, has criticized the proposed tax, arguing it would negatively impact Australia's trading relationships with key partners such as Japan and South Korea. The Treasury is reportedly exploring options for a new levy aimed at capturing windfall profits from gas and thermal coal companies, alongside potential changes to the Petroleum Resources Rent Tax (PRRT).

The Guardian

Recent campaigns led by independent senator David Pocock and the Australia Institute have highlighted the disparity in tax contributions from gas companies compared to other sectors, such as the beer excise. This has sparked a significant public discourse, with Pocock noting that the campaign has "fired people up" and engaged the community. Labor backbencher Michelle Ananda-Rajah and former industry minister Ed Husic have publicly supported the idea of increasing taxes on gas companies, indicating a potential shift in the Labor caucus's stance.

The Guardian

The gas industry has mobilized against the proposed tax, with McCulloch asserting that it would harm Australia's reputation as a reliable supplier. The Japanese ambassador to Australia, Kazuhiro Suzuki, echoed these concerns, warning that a surprise tax could lead investors to seek opportunities in other countries. The AEP has launched a public relations campaign to counter the narrative that gas companies are not contributing their fair share of taxes, a sentiment that has gained traction among the public.

The Guardian

The rising fuel costs are impacting various sectors, including care workers, tradespeople, and farmers, leading to calls for government assistance. The United Workers Union has urged the government to provide fuel vouchers to support home care workers, while the National Farmers’ Federation has highlighted the urgent need for fertiliser and diesel supplies. The Master Builders Association has forecasted a downturn in housing construction, attributing this to rising costs and the geopolitical situation.

The Guardian

While there is a growing consensus among some Labor MPs for a new gas export tax, concerns remain about potential backlash from the public if they perceive the tax as a contributor to rising household energy prices. The government has yet to announce any comprehensive reforms in response to the fuel crisis, but industry groups are discussing the possibility of seeking assistance similar to the Covid-era jobkeeper wage subsidy to prevent layoffs.

The Guardian

• “It has engaged people and it’s fired people up. You’re really starting to see the leaders are starting to feel the pressure,” — David Pocock, Independent Senator

The Guardian

• “The government must learn the lessons from Covid and monitor this closely, ensuring certainty is provided with respect to stand down provisions and consideration given to whether further supports are needed, especially to ensure apprentices are retained,” — Denita Wawn, CEO of Master Builders Australia

• “we need to keep an eye on that, if we need to prioritise or lay off staff, or if we need to go to a jobkeeper-style program.” — Gayle Sloan, CEO of the Waste Management and Resource Recovery Association