MPI topic: The urgent need for a tax on gas exports to ensure all Australians receive a fair share of the benefits from the sale of our natural resources.  

Mr Speaker, I thank the Member for Mackellar for raising the topic of taxing our gas exports – it is a matter of public importance and worthy of our time in this place.   

I’m going to approach the topic from a slightly different angle to colleagues.  

I want to talk about it in the context of Australia’s place in a geopolitical landscape that has ruptured.  

In the context of the new world order we now find ourselves in, and how Australia should see itself, position itself, in that new paradigm.  

In short, I want to talk about how it’s time – in relation to taxing gas exports but in a much broader sense – for Australia to embrace a level of sovereign bravery. 

Australia has a lot more agency and influence in the world than what many of our leaders would have us believe.  

Than what many of our leaders have convinced our populace, that we have.  

I think our leaders should rethink that rhetoric. 

• That they should start to grasp that we are a middle power with influence.  

• That we are the 15th largest economy in the world by GDP1 - just below South Korea, and above Indonesia. 

•  And that we have proven ourselves – generation after generation – to be a trusted, reliable actor on the international stage.  

Maybe then, when it comes to taxing our resources, we might properly understand that we have commodities that the rest of the world wants and needs, and that that gives us competitive, strategic advantage.  

Let’s break it down in the context of our ongoing failure to properly tax companies who profit from our natural resources.  

Two reasons are often given for why we don’t and can’t better tax the resources that we virtually give away.  

The first is that the mining companies will be less likely to invest here.  

Australian Energy Producers – the peak body for energy producers – said just last week that  

“…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.”2  

As to that, I’m here to call BS.  

One clue is in the definitive and HYPER-bolic rhetoric they are prepared to use, without knowing any detail at all about the design of any new tax.  

It is true that applying more tax to gas exports may reduce the profits of gas companies. But Australian gas producers pay some of the lowest tax on gas in the world.3  

Other major fossil fuel exporting countries typically share between 75% and 90% of fossil fuel profits. Australia shares only 27%.  

With profit defined in cashflow terms, as in Norway, Australia shares even less: just 18%.4 

The second argument that comes up to counter the suggestion that gas exporters should pay more tax is  

• the impact it will have on our relationships with our key trading partners 

•  – the countries who buy our gas –  

• because it might increase the prices they are required to pay.  

This is the kind of objection you’re less likely to hear the government say out loud, but it is most definitely an argument they heed. 

But let’s have a look at what’s actually happening with the gas that we export to – for example – Japan.  

It might surprise many people to hear that Japan is on-selling vast quantities of the gas it purchases from Australia, at a considerable profit. 

Research from the Institute of Energy Economics and Financial Analysis5 has shown that Japanese companies are on-selling about half as much Australian gas as they import from Australia. And they are on-selling it to markets we operate in –  

they have become our competitor,  

• using our gas! 

This is a lucrative side hustle for Japan, and a ludicrous embarrassment to Australia.  

The government is allowing the Australian taxpayer – the owners of that gas – to be played for absolute mugs. 

A tax on gas exports would be win / for the Australian people. Either, we raise significantly more revenue from the sale of our own resources, or more gas stays onshore for sale to the Australian consumer.  

Mr Speaker, the world is changing. Significantly and quickly. Australia is in an incredible position to stand up and be counted. It will require us to reorient our sense of our place in the world and to exercise our sovereign bravery.  

We need to  

• decouple from our colonial past,  

• from our sense of being an underdog, and  

• realise, and behave as though, 

 we have influence as a middle power. 

Taxing gas exports – which is nothing more than demanding what we are entitled to – should be an easy place to start.