Why Gas Companies Pay Less for Offshore Liquid Natural Gas than Australians Pay in Beer Excise
Sixteen years after then-Prince Andrew brokered a multi-billion dollar deal for BG Group – British Gas – in Queensland, Australia finally has a proposal on the table to properly tax this massive export industry. But will the senate vote for it? We will know today …
ACT Independent Senator David Pocock has tabled a motion to establish a special Senate committee to examine what many Australians have been saying for years: why do multinational gas companies appear to pay less for exporting our offshore liquefied natural gas than Australians pay in beer excise?
The proposed inquiry — formally titled the Select Committee on Why Gas Companies Pay Less for Offshore Liquid Natural Gas than Australians Pay in Beer Excise — is as pointed as it is overdue. Behind the sharp phrasing sits a serious question about sovereignty, fairness and national priorities.
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The Heart of the Matter: PRRT and the LNG Boom
At the centre of the proposed inquiry is the Petroleum Resource Rent Tax (PRRT), the mechanism meant to ensure Australians receive a fair return from the export of liquefied natural gas (LNG). On paper, it is designed to capture a share of extraordinary profits from offshore resources. In practice, revenue has fallen well short of public expectation.
Australia is one of the world’s largest LNG exporters. The scale of the boom has been enormous. Yet the public dividend has been modest, particularly when compared to nations such as Norway and Qatar — jurisdictions the committee would examine as benchmarks for more assertive resource taxation and long-term sovereign wealth planning.
Norway, famously, turned its North Sea windfall into a sovereign wealth fund now valued at roughly $3 trillion. It is difficult not to notice the contrast.
The committee would also consider proposals put forward by the Australian Council of Trade Unions for a 25 per cent tax on gas export revenue, alongside broader questions about whether the current PRRT settings are fit for purpose in a post-2016 energy landscape.
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Has Australia’s ship already come in?
There is also a hard economic clock ticking in the background. Many of Australia’s long-term LNG export contracts begin expiring around 2030 — precisely when the United States is expected to have significantly expanded supply under its renewed “drill baby drill” push.
As new American export terminals come online and global capacity increases, the LNG market is likely to become far more competitive, with more cargo chasing fewer buyers.
In that environment, prices won’t be set by cosy legacy contracts but by the spot market — and the USA is a formidable low-cost producer. If the world is awash in LNG by the end of the decade, Australia will need to compete hard on price and efficiency.
That makes it all the more urgent to examine whether our current tax settings are fit for a tougher global marketplace, and whether we are capturing fair value now before margins tighten.
Rising Prices at Home
While LNG cargoes leave Australian ports bound for international markets, households and businesses have been grappling with steep increases in domestic gas prices since 2016.
The inquiry proposes to examine that disconnect.
How did a country so rich in gas resources find itself debating energy affordability? Why are small businesses paying elevated prices for input energy while global energy giants report strong returns? And crucially, what could be achieved if offshore LNG were taxed more effectively?
Housing. Health. Education. Infrastructure. Debt reduction. The options are not abstract — they are budget lines that governments regularly describe as constrained.
Senator Pocock framed it bluntly:
“We get one chance to capture the benefits of the LNG boom and invest in the things Australians need most: housing, health, education.”
He went further:
“Currently we are squandering what Norway has turned into a $3 trillion dollar sovereign wealth fund.”
The implication is clear: this is not simply about tax settings. It is about generational opportunity.
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A Balanced Committee, A Public Process
The proposed committee would comprise two Labor senators, two Coalition senators and one crossbench senator, alongside Senator Pocock as Chair. It would report in May 2026.
In other words, this is not a partisan ambush. It is structured to reflect the Senate’s political balance and, ideally, to test the evidence in public view.
Under the motion, the committee would have the power to call witnesses, examine documents, sit in public or private, and publish a daily Hansard of proceedings. Inquiries of this kind often become focal points for economists, industry leaders, unions, energy analysts and everyday Australians to place evidence on the record.
For an issue this complex — involving global commodity markets, fiscal design, investment incentives and domestic energy security — sunlight is not a luxury. It is a necessity.
The Broader Question: Who Benefits From Our Resources?
Australia’s offshore gas reserves belong to the nation. Companies invest billions to extract and process that gas. Both statements can be true. The policy question is where the balance lies.
For years, debates about resource taxation have flared and faded. The political heat has often overwhelmed the underlying economics. Yet the fundamentals remain:
– LNG exports are vast.
– PRRT revenue has been comparatively limited.
– Domestic gas prices have risen sharply.
– International comparators show alternative models are possible.
Senator Pocock distilled public frustration into a line that will likely echo through tomorrow’s vote:
“I call on the major parties to stand up for what the people they’ve been elected to represent want to see and that’s big companies paying more to export our gas than Australians pay on beer excise.”
It is a rhetorical flourish, yes — but one grounded in an uncomfortable fiscal comparison.
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Will Australia Tax its Gas Exports Properly?
Governments of all stripes regularly tell Australians that budgets are about priorities. They speak of trade-offs. Of hard choices. Of limited revenue.
An inquiry into the “Great Gas Giveaway” asks a foundational question: are those limits structural, or are they political?
If Australia is leaving billions on the table during a once-in-a-generation LNG export boom, that is not merely a technical oversight. It is a policy decision — whether by design, inertia or industry influence.
This proposed inquiry does not predetermine the outcome. It does something more important: it reopens the ledger.
And that, perhaps, is why it feels overdue. Tomorrow, the Senate will decide whether to proceed.
For a country rich in natural resources yet perpetually debating fiscal restraint, the vote may prove more consequential than it first appears.
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Here is the Notice of Motion from Senator David Pocock
I give notice that on the next day of sitting, I shall move –
1. That a select committee, to be known as the Select Committee on Why Gas Companies Pay Less for Offshore Liquefied Natural Gas than Australians Pay in Beer Excise, be established to inquire into and report on:
a. the amount of Petroleum Resource Rent Tax (PRRT) paid on Liquefied Natural Gas (LNG);
b. reasons for the low revenue generated by PRRT paid on LNG;
c. policies other jurisdictions such as Norway and Qatar have in place that has resulted in much higher revenue being generated through the sale of gas and oil in those jurisdictions;
d. the proposal from the Australian Council of Trade Unions for a 25% tax on gas export revenue;
e. the impact on Australian businesses and households of the increase in gas prices since 2016;
f. what could be done with the additional revenue generated by effectively taxing the offshore LNG industry; and
g. any other related matters.
2. That the committee present its final report by 11 May 2026.
3. That the committee consist of 6 senators, as follows:
a. two nominated by the Leader of the Government in the Senate;
b. two nominated by the Leader of the Opposition in the Senate;
c. one crossbench senator; and
d. Senator David Pocock.
4. That:
a. participating members may be appointed to the committee on the nomination of the Leader of the Government in the Senate, the Leader of the Opposition in the Senate or any minority party or independent senator;
b. participating members may participate in hearings of evidence and deliberations of the committee, and have all the rights of members of the committee, but may not vote on any questions before the committee; and
c. a participating member shall be taken to be a member of a committee for the purpose of forming a quorum of the committee if a majority of members of the committee is not present.
5. That the committee may proceed to the dispatch of business notwithstanding that all members have not been duly nominated and appointed and notwithstanding any vacancy.
6. That Senator David Pocock chair the committee, and the committee elect as deputy chair a member nominated by the Leader of the Government in the Senate.
7. That the deputy chair shall act as chair when the chair is absent from a meeting of the committee or the position of chair is temporarily vacant.
8. That the chair, or the deputy chair when acting as chair, may appoint another member of the committee to act as chair during the temporary absence of both the chair and deputy chair at a meeting of the committee.
9. That, in the event of an equally divided vote, the chair, or the deputy chair when acting as chair, have a casting vote.
10. That the committee have power to send for and examine persons and documents, to move from place to place, to sit in public or in private, notwithstanding any prorogation of the Parliament or dissolution of the House of Representatives, and have leave to report from time to time its proceedings and the evidence taken and such interim recommendations as it may deem fit.
11. That the committee be provided with all necessary staff, facilities and resources and be empowered to appoint persons with specialist knowledge for the purposes of the committee with the approval of the President.
12. That the committee be empowered to print from day to day such papers and evidence as may be ordered by it, and a daily Hansard be published of such proceedings as take place in public.
Senator David Pocock
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