Gas Tax: How Beer Fuelled a Debate on Australia’s Energy Giants

The Viral Moment That Ignited the Debate

Gas tax – During a routine senate session in February, a moment of clarity from a treasury official inadvertently sparked a national conversation. The revelation that Australia collects more tax revenue from beer than from gas exports stunned attendees. Independent Senator David Pocock seized the opportunity to question the nation’s fiscal priorities, asking, “How do we live in a country, one of the biggest gas exporters in the world, and we’re getting more tax from beer?” His query, captured in a viral video, has since garnered nearly 10 million views on Instagram, amplifying calls for a 25% tax on gas exports.

“How do we live in a country, one of the biggest gas exporters in the world, and we’re getting more tax from beer?”

The senator’s words resonated with Australians grappling with rising living costs and domestic gas prices, which have spiked due to global tensions. The debate over energy taxation has since become a focal point in the lead-up to the upcoming federal budget. While the government has resisted implementing the proposed gas export tax, the conversation shows no signs of slowing. Public sentiment, as highlighted by recent polls, indicates growing support for rethinking the country’s approach to taxing its energy resources.

A Tax on Gas: The Campaign and Its Critics

The push for a gas export tax has gained traction among policymakers and citizens alike. Advocates argue that energy companies, which generate substantial profits, are not adequately contributing to public funds. They point to the stark contrast between the taxes levied on beer and those on gas, suggesting the latter should bear a similar burden. However, energy firms have launched a counter-offensive, framing the tax as an unfair burden on a vital industry.

Former treasury secretary Dr. Ken Henry, who previously proposed a mining tax that was later defeated, has reentered the fray. In a recent senate hearing, he emphasized the need for immediate action, stating, “Just do it and stop the crap.” His remarks carry weight, as he once helped design a policy that was ultimately rejected by industry-backed campaigns. Henry argued that had the mining tax been implemented, Australia could have accumulated tens of billions of dollars over the past 16 years, which could have funded initiatives like expanded parental leave, free tertiary education, and healthcare improvements.

“Just do it and stop the crap.”

Henry’s critique extends to the current taxation framework for the gas sector. He likened the situation to a personal financial transaction: “Imagine if I were to come to you … and put this proposition to you: I’ll sell your house and I’ll give you 30% and I’ll keep the other 70%, and you should be happy with that because I’ve just converted an asset into cash. None of you would be stupid enough to do that.” His analogy underscores the frustration that the gas industry is extracting significant value without proportional returns to the public.

The Economic Divide: Beer Taxes vs. Gas Exports

According to the Australia Institute, a progressive public policy think tank, the nation’s tax code currently favors energy companies. The organization estimates that a 25% tax on gas exports would generate A$17 billion annually, a figure that has captured public attention. In contrast, the Petroleum Resource Rent Tax (PRRT), which applies to offshore oil and gas producers, is projected to yield about A$1.5 billion in the 2025-26 financial year. This discrepancy has fueled arguments that the energy sector is under-taxed compared to other industries.

Even multinational energy giants like Shell have highlighted the disparity. Last year, Shell paid PRRT on its largest gas project, Gorgon, for the first time in a decade. The tax on a A$2.5 billion revenue stream amounted to just A$109 million, raising questions about the effectiveness of the current system. Samantha Hepburn, a Deakin University professor specializing in natural resource law, explains that the tax code includes “generous” provisions for energy companies. These allow them to deduct development costs against profits and carry forward tax credits to future earnings, creating a financial advantage over other sectors.

“Gas is in a particularly favourable position because of the significant upfront costs associated with construction and drilling and the other infrastructure,” Hepburn says.

While energy companies also pay company and payroll taxes, their ability to offset expenses through the PRRT system has drawn criticism. Hepburn notes that this structure enables gas producers to maintain higher profit margins, even as domestic prices rise. For example, onshore gas projects may pay royalties, but the offshore industry benefits from more flexible tax arrangements. This has led to calls for reform, with some arguing that the public should receive a fairer share of the country’s natural resource wealth.

Australia’s Wealth Gap: Lessons from Norway

Comparisons to Norway’s successful sovereign wealth fund have intensified the debate. Norway’s US$2 trillion fund, accumulated over decades, has allowed the country to fund generous social programs. Australians, however, are facing a challenge: their sovereign wealth fund currently holds only A$267 billion as of December 2025, a figure that pales in comparison to Norway’s, despite a population five times smaller. This gap has been a recurring theme in news headlines, with critics decrying the lack of strategic foresight in managing natural resource revenues.

The Australia Institute’s data further underscores this point, showing that Japan, a major importer of Australian gas, generates more tax revenue from the commodity than Australia does. This is because Japan taxes gas imports, whereas Australia relies on export earnings. The implication is clear: Australia’s tax system may be missing opportunities to reinvest in public services and infrastructure. As the country navigates a fuel crisis exacerbated by the US-Israeli war on Iran, the pressure to revise its energy taxation policies is mounting.

Public Opinion and the Role of Social Media

Public sentiment has shifted significantly in recent months. A recent poll revealed that 57% of voters support a gas export tax, while only 12% oppose it. This represents a major turning point for the energy sector, which has long enjoyed political favor. Social media platforms, particularly YouTube, have amplified the discussion. Konrad Benjamin, a former teacher turned political commentator, has used his influence to highlight the issue. His videos, which regularly attract hundreds of thousands of views, argue that Australians are not getting value for their resource wealth.

“My year 10 business students understand: if something is profitable and we’re holding all the levers of power – look around. How many stable democracies have the many resources that we have? How are we getting such a dud deal?”

Benjamin’s perspective reflects a broader concern: that Australia’s energy companies are leveraging their market dominance without sufficient accountability. He challenges lawmakers to consider the long-term implications of current tax policies, noting that the nation’s resources could be better harnessed to benefit citizens rather than accumulate corporate profits. His argument aligns with growing demands for a more equitable distribution of wealth, especially in an era of economic uncertainty.

The Road Ahead for Australia’s Energy Policy

As the debate continues, the government faces mounting pressure to act. While the prime minister has ruled out the 25% gas export tax, the momentum behind the idea remains strong. The PRRT, though a small portion of the revenue generated by gas exports, has become a symbol of the industry’s tax advantages. Analysts suggest that revising the PRRT or introducing additional levies could help bridge the gap between resource wealth and public investment.

The conversation also highlights the importance of long-term fiscal planning. With domestic gas prices at a decade-long high and global markets volatile, Australia must decide whether to prioritize short-term corporate gains or invest in future generations. The question is no longer just about beer versus gas—it’s about how the nation balances economic growth with social responsibility. As the federal budget approaches, the answer will shape the country’s energy landscape for years to come.