New Gas Tax Debate Starts in Canberra Before Budget

Environment groups want a 25% tax on gas exports. This is a big increase from current taxes.
By Newsroom | Politics, Energy |

A parliamentary inquiry into the taxation of gas resources has commenced, intensifying debate over potential new levies on gas exports. Environment groups are pushing for a 25% tax on gas exports or an increase to the petroleum resource rent tax (PRRT) on windfall profits. Industry bodies, however, have issued stark warnings, asserting that such measures would jeopardize Australia's energy supply and render the sector 'uninvestable'.

Angus Taylor, speaking on Tuesday, declared that a hypothetical 25% gas levy would "shut down the industry." This statement comes as a Greens-led inquiry begins public hearings in Canberra today. The inquiry's findings are slated for release just before the federal budget on May 12, fueling speculation that the governing party may leverage the report to justify reforms to gas taxation.

The current Petroleum Resource Rent Tax (PRRT) is structured as a profit-based tax that only engages once companies recoup their expenditures and achieve returns beyond a specified threshold. Proponents of increased taxation are expected to present their cases during the initial public hearings.

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Meanwhile, separate developments saw petrol stations in Victoria fined a collective sum exceeding $128,000 for transgressions against the state's fuel pricing plan. This action underscores ongoing scrutiny of pricing mechanisms within the energy sector.

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In parallel discussions, Angus Taylor's recent policy proposals, specifically concerning immigration, have been characterized by the Coalition's partners as a potentially "risky" strategy. This assessment suggests a perceived lack of clear electoral advantage, with one commentary noting it might be a path "to come second." Taylor has previously articulated the Coalition's intent to re-establish a budget rule that would constrain overall government spending growth to align with the economy's expansion rate. However, details regarding potential increases in defense expenditure remain unspecified.

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The debate around resource taxation has a history. Environmental advocates continue to advocate for greater revenue extraction from the gas sector, a stance that has seen mounting pressure. The urgency surrounding these discussions is amplified by the proximity of the federal budget, traditionally a period of significant fiscal announcements and policy shifts.

Frequently Asked Questions

Q: What is the new debate about gas taxes in Canberra?
A parliamentary inquiry has started in Canberra today, April 21, 2026, to discuss new taxes on gas exports. Environment groups want a 25% tax or higher taxes on big profits.
Q: What do gas industry groups say about the new tax ideas?
Industry groups warn that a 25% gas levy could stop the industry from working and make it impossible to invest in. Angus Taylor said on Tuesday that this tax would 'shut down the industry'.
Q: When will the findings of the gas tax inquiry be released?
The inquiry's findings are expected just before the federal budget on May 12, 2026. This timing suggests the government might use the report to make changes to gas taxes.
Q: What is the current Petroleum Resource Rent Tax (PRRT)?
The PRRT is a tax on profits that only starts after companies have earned back their costs and made extra money. Supporters of higher taxes will talk about this during the public hearings.
Q: Are there other energy pricing issues happening in Australia?
Yes, in Victoria, petrol stations were fined over $128,000 for not following the state's fuel pricing plan. This shows that pricing in the energy sector is being watched closely.