Australia ‘Already Struggling’: Gas Industry Warns Against New Tax

Australia’s peak gas industry body has warned against any move to increase taxes on gas producers, following reports the federal government is considering the measure as an economic failsafe against the impact of the Iran war.

Australian Energy Producers Chief Executive Samantha McCulloch said any move to impose higher taxes would only serve to expose Australia to more future energy issues.

“This would be the worst possible time for Australia’s economy and energy security to impose a new, retrospective tax on an essential energy sector,” she said.

“Imposing higher taxes on Australian gas producers would stop investment in new gas supply, leading to gas shortfalls, higher energy prices, and the closure of Australian industries that rely on reliable and affordable gas.”

She said rising petrol and diesel prices highlighted the importance of maintaining domestic supply, even as global energy markets remained volatile.

“Australia’s role in regional and global energy security has never been more important,” she said.

“Australia’s reliable gas supply to the region underpins the energy security of key trade partners, and in turn Australia depends on imported fuels and other essential imports from the region.”

The industry is currently the nation’s second-largest corporate taxpayer, contributing $21.9 billion in taxes and royalties in 2024-25, up from $16 billion the previous year.

McCulloch said regulatory uncertainty, approval delays, and existing tax settings were already affecting Australia’s competitiveness for new gas investment.

“Further retrospective tax changes would send a damaging message that Australia is closed for business,” she said.

Government documents suggest officials had been seeking advice on options to increase taxes after heavy lobbying from cross benchers, unions, and economists, according to the ABC.

The documents reportedly stated that energy producers “should not benefit from high international prices at the expense of domestic customers.”

Greens leader Larissa Waters also wrote to the Prime Minister Anthony Albanese, offering to help pass laws imposing a levy on gas companies.

“With the upcoming budget, there’s a real opportunity for the government to rein in big gas greed and make them pay their fair share of tax,” she told AAP.