The Australian government is considering a windfall tax for its energy industry amid soaring prices for liquefied natural gas, of which the country is the third-biggest exporter in the world.
ABC first reported the news, saying the Department of Prime Minister and Cabinet had drafted a document for modelling “new levy options” for the gas and coal industries. “Energy producers should not benefit from high international prices at the expense of domestic customers,” the document said.
Earlier today, the country’s Energy Minister, Chris Bowen, confirmed the PM department had made a request for looking into a windfall tax for the industry that last financial year paid some A$22 billion in taxes, according to data from the Australian Energy Producers industry body, as cited by Bloomberg.
The publication recalled that Australia’s total exports of liquefied natural gas over the 12 months to June 2025 were worth some A$65 billion, with volumes at close to 80 million tons that were shipped primarily to Japan, South Korea, and China.
There have been calls for a windfall tax on the gas industry for a while in Australia, leading to disputes in political circles since not all parliamentary parties are on board with the idea. If the UK is any indication, a windfall tax is really not the best idea. The UK introduced such a tax, to the tune of 25%, back in 2022, and it led to what the industry had warned about: lower investments in production, lower production, and, as a result, lower tax revenues from the industry.
Yet trade unions and economists argue that a windfall tax would benefit regular Australians in times of crisis, ABC noted in its report, as additional tax revenues could serve to alleviate potential financial pain for households during those times of crisis.
The industry, naturally, disagrees. A windfall tax would “leave Australia more exposed to future energy shocks,” the chief executive of the Australian Energy Producers said, as quoted by Bloomberg. “While international gas prices have surged, Australian gas prices remain relatively low, and the market is well-supplied.”
By Irina Slav for Oilprice.com
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