Key facts
- Australia's Prime Minister Anthony Albanese is considering a new tax on liquefied natural gas (LNG) export profits.
- The proposal comes amid a global energy crisis and surging international gas prices.
- The gas industry warns that a windfall tax could deter investment and jeopardize energy security.
- Proponents argue that a tax is necessary to ensure Australia's natural resource wealth benefits the public.
- The government is examining various proposals, including a flat export levy.
- Albanese has reportedly decided against a 25% export tax for the upcoming federal budget.
Prime Minister Anthony Albanese's government is evaluating the possibility of imposing a new tax on the extraordinary profits of Australia's liquefied natural gas (LNG) exporters. This consideration arises as global energy prices have surged due to geopolitical disruptions in the Middle East, impacting key export infrastructure and shipping routes. Australia, a major LNG exporter, has seen the value of its shipments climb significantly, reaching approximately A$65 billion in the year to mid-2025.
Leading gas producers are actively opposing the proposed windfall tax, warning that it could undermine investment confidence and compromise the nation's long-term energy security. They argue that stable fiscal policies are crucial for maintaining production and meeting both domestic and international demand, especially in volatile markets. The industry also points out its substantial annual contributions through existing taxes and royalties, suggesting that additional levies could reduce Australia's global competitiveness.
However, political momentum for reform is growing, with lawmakers and advocates highlighting the sharp rise in company earnings during the current crisis. They propose redirecting a portion of these gains to support households struggling with higher energy and living costs. Discussions include implementing a flat export levy or modifying existing tax structures for offshore resource projects. Former Treasury Secretary Ken Henry has publicly urged the government to proceed with resource taxation in the national interest, criticizing the current tax system for not adequately capturing the value of natural endowments.
Despite these calls, Prime Minister Albanese has reportedly decided against a 25% export tax for the upcoming federal budget, echoing industry concerns about alienating key buyers like Japan, South Korea, and China. The government maintains a measured approach, aiming to balance fiscal returns with the need for reliable energy supply and strong international partnerships. The tax modeling remains a confidential cabinet process, with no final decision announced.