Federal, WA and QLD Labor are continuing to play realpolitik on natural gas exports. On 7.30 Report, Treasurer Jim Chalmer last month implied that if hydrocarbons are going to continue to be used around the world, Australia may as well get its share of the economic benefit.
But as climate change continues to worsen, how much do natural gas earnings help Australians? Much less than you might think.
How Much Does Australia Make from Gas?
Australia is the no.2 producer of liquefied natural gas in the world, behind only Qatar. The Browse Basin off the coast of WA hosts the world’s biggest floating liquefied natural gas plant.
Australia Institute analyst Mark Ogge recently published data from gas extractors operating in Western Australia. As you can see, tax is about $5.5bn over approximately $133bn in total income, with most of that $5.5bn paid by just one company.
These figures, moreover, come from before the tremendous gas price rises prompted by the Ukraine invasion and sanctions. In what is essentially war profiteering, gas majors’ revenues in QLD more than doubled in FY22 v FY21.
With its major stake in Australia Pacific LNG off the QLD coast, a leading beneficiary has been Origin Energy. Origin has paid $0 in income tax from 2014 – 2020.
What will Labor’s response be? Chalmers has said their tax reform initiatives will be directed towards multinationals, but the juice of their plans are not yet forthcoming. The Tory British government recently announced a 25% windfall profits tax on gas operations in UK territory.
Around two-thirds of Australians support a windfall profits tax in the current environment. Contrary to fossil fuel spin, support is actually highest in QLD and WA.
Michael West recently drew the comparison between gas royalties and arguing over budget items like COVID leave. ‘This is not “can’t see the forest” for the trees,’ West commented, ‘This is “can’t see the Amazon rainforest for the twig.”’
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