Passing the gas. Twelve years of tax data show Australia’s loss

CICTAR’s Jason Ward looks into the new tax data from Australian Tax Office

Gas Leaving Australia

Writing on Michael West Media, CICTAR’s Principal Analyst, Jason Ward, delves into the 12th year of corporate tax data from the Australian Tax Office.

Jason writes:

‘The 12th year of ATO corporate tax data shows progress, but gifting Australia’s vast offshore gas resources still leaves a foul stench’.

The ATO corporate tax transparency data for Australia’s largest corporations has just been released for the FY 2024-25 financial year. It includes payments from the Petroleum Resource Rent Tax (PRRT), and this year is the first to show the impact of the Labor government’s weak effort to reform the PRRT by capping the use of PRRT deductions at 90% of the value of production.

In other words, 90% of the value of offshore gas production still pays zero PRRT, and the flawed PRRT is applied to only 10% of production.

Following implementation of these reforms (advocated for by the industry itself), the PRRT take was less than $1.9B while LNG exports topped $65B in 2024-25. This equates to under 3% of the value of LNG exports, despite that PRRT rate being 40% (of the value of raw gas). This excludes state-level royalties on gas sold to the domestic market.

Given the ongoing and seemingly escalating conflict in the Middle East instigated by the belligerent US and Israeli attacks on Iran, the value of Australia’s world-leading (now only behind the US and ahead of Qatar) LNG exports is expected to skyrocket again.

LNG prices spiked after Russia’s invasion of Ukraine and Australia’s LNG exports peaked at $90B in 2022-23.

However, under the current ‘reformed’ PRRT, don’t expect Australia’s take on this massive export to increase much at all.