Gas giants warn against windfall gains tax as Pocock says ‘wartime profits’ should go to struggling Australians

Government faces political fight as industry says mooted 25% levy on exports would hurt Australia’s economy and energy securityGet our breaking news email, free app or daily news podcastGas giants will lobby against any federal government moves to introduce a 25% export levy on windfall profits, as crossbenchers pressure the prime minister to redirect billions of dollars in “wartime profits” to Australians struggling amid the global energy crisis.It comes after the prime minister’s department asked Treasury to model the effects of placing a flat 25% tax on gas exports, the ABC reported on Friday, along with any further changes to the petroleum resource rent tax (PRRT) and corporate income tax.The issue sets up a fierce political fight as parliament returns next week with crossbench MPs, including David Pocock, and advocacy groups demanding the government capture billions of dollars in potential revenue by imposing taxes on exported Australian gas as global prices rise following Israel and Iran’s attacks on gasfields in the Gulf.Pocock, has been pressuring the government in recent months to offset struggling households by collecting more tax from fuel exports, in a move Albanese suggested was because he was seeking “to promote grievance”.The ACT senator said it appeared the government “might finally be caving to the pressure myself, others on the crossbench and especially Australians in communities across the country have been putting on them to tax gas companies making wartime profits”.“Australians are already paying more on petrol and we shouldn’t be paying more on beer excise than the government gets for petroleum resource rent tax,” he said on Friday.The tobacco excise is forecast to bring in $5.45bn across over 2025-26 with the spirits and beer excises expected to pour $3.4bn and $2.7bn respectively into government coffers, according to the mid-year economic and financial outlook. In that same period, the PRRT is expected to raise $1.5bn.But the gas industry’s peak representative body, Australian Energy Producers, said a 25% levy against its exports would come at the “worst possible time for Australia’s economy and energy security”.“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,” AEP’s chief executive officer, Samantha McCulloch, said.The federal government has so far resisted any push for steeper taxes against the industry, with the resources minister, Madeleine King, telling parliament earlier this month it “would discourage investment in the new supply we need to back up our transition to net zero”.“We need gas as a firming capacity for renewables, whether they be solar or wind,” King said.But on Friday, the energy minister, Chris Bowen, did not rule out the consideration when asked.“The treasurer’s made clear, the tax reform is on the government’s agenda, and is considering the way to maximise the efficient collection of tax in Australia,” he said on ABC radio.The escalation in attacks since the Israel-US war against Iran begain in late February has sent shock waves through the global energy market.On Wednesday night, Israel struck Iranian facilities used to process gas from the nearby South Pars gas field, which it shares with Qatar.Iran retaliated on Thursday by attacking the Qatari gas hub Ras Laffan, which reportedly damaged facilities that produced 17% of the state-owned company’s liquefied natural gas (LNG) export capacity. QatarEnergy told Reuters it would take three to five years to repair them.The attacks have already driven up the price of gas internationally and Australian gas exporters are expected to reap the profits of increased demand and constrained supply.A report by the progressive thinktank, the Australia Institute, estimated Australia would have received around $17bn a year in tax revenue from gas producers since 2022, based on pre-Iran war levels, if a 25% tax on gas exports had been in place.The Greens leader, Larissa Waters, wrote to Albanese on Thursday offering the minor party’s support to pass a bill in the upcoming sitting fortnight, saying the revenue could be dedicated to “urgent cost of living relief”.“Millions of Australians are doing it tough, and these rich corporations should not get a free ride while people are going backwards,” Waters said.But the shadow treasurer, Tim Wilson, said it would be “next-level denial to think the answer to a fuel and energy crisis is added new taxes because it will just freeze investment and private jobs growth”.The Chamber of Minerals and Energy WA said Australia had been shielded from international gas shocks because investors saw the country as a “stable, reliable place to invest”.The chamber’s chief executive officer, Aaron Morey, said the proposed tax would risk “undermining that reputation and damaging the living standards of future generations of Australians”.“At exactly the moment we need more gas, not less, this would dramatically escalate sovereign risk,” he said.