The way Australia taxes gas production is stuck in the past – this is why companies aren’t paying their fair share

Australia exported sixty-five billion Australian dollars worth of liquefied natural gas last year—a major source of national income. Yet the government's petroleum rent tax collected only one point five billion. The Conversation reports the disconnect stems from a fundamental design flaw: the tax was introduced in nineteen eighty-seven for oil and pipeline gas, but it taxes only extraction, not the liquefaction and export that turn raw gas into LNG. Modern integrated projects make it hard to split the value fairly between the taxable upstream stage and the non-taxable processing stages, allowing companies with enormous export profits to pay modest rent tax. Norway, for contrast, captures roughly forty-eight percent of petroleum value and collected sixty-six billion Australian dollars in just twenty twenty-three. Australia's combined oil-and-gas tax rate was only fifteen percent that year. With labor pushing for a fairer return and former Treasury Secretary Ken Henry urging reform, the debate now centers on whether Australia's tax remains suited to its modern LNG industry.

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