The Australian Oil & Gas Industry’s Tax and Royalties Contribution

The Australian oil and gas industry is one of the biggest tax-paying sectors, contributing a record $21.9 billion in taxes and royalties in 2024–25 to state and federal governments – equivalent to the annual cost of the Pharmaceutical Benefits Scheme (PBS).

This takes the industry’s tax and royalties contribution over the past three years alone to almost $60 billion, reaffirming the industry’s substantial and ongoing contribution to the Australian economy and dispelling the myth that Australia’s oil and gas sector does not pay its fair share. 

The facts are:

• The industry is the second-biggest corporate taxpayer, accounting for one in every ten company tax dollars paid.
• The Australian Taxation Office has confirmed that “some oil and gas companies [are] now amongst the largest taxpayers in Australia”.
• Commonwealth taxes paid by the oil and gas sector have increased more than tenfold from $1.5 billion in 2021–22 to $18.7 billion in 2024–25.

In addition to the oil and gas industry’s significant tax and royalties contribution, the sector is also a key driver of Australia’s productivity and economic growth, representing 3.7 per cent of Australia’s GDP.  

Economic analysis by KPMG found that as well as having a critical role in Australia’s energy mix, natural gas is powering the Australian economy through high levels of employment and productivity, contributing $105 billion a year to the national economy and supporting 215,000 jobs.

MYTH: “AUSTRALIAN GAS COMPANIES DON’T PAY ENOUGH TAX”

FACTS

• The oil and gas industry is one of the biggest tax-paying sectors in Australia, contributing $21.9 billion in taxes and royalties in 2024–25¹ to state and federal governments—equivalent to the annual cost of the Pharmaceutical Benefits Scheme.²

• The Australian Taxation Office confirms that “some oil and gas companies [are] now amongst the largest taxpayers in Australia”,³ accounting for 1 in every 10 dollars of company tax paid.²

• Commonwealth taxes paid by the oil and gas sector have increased more than tenfold from $1.5 billion in 2021–22 to $18.7 billion in 2024–25, reflecting major projects moving further into their production cycles.³

MYTH: “AUSTRALIAN GAS IS GIVEN AWAY FOR FREE”

FACTS

• Australia’s LNG sector has invested more than $400 billion in Australia since 2010,⁴ and accounts for much of the gas sector’s $105 billion annual contribution to the Australian economy.⁵

• Around 70% of gas produced in Australia is from Commonwealth waters where the Australian Government’s Petroleum Resources Rent Tax (PRRT) applies in place of a royalty regime, with Treasury estimating gas companies will pay $8.3 billion in PRRT over the next five years.⁶

• Onshore gas projects around Australia paid $2.1 billion in 2024–25 in state royalties and licence fees.

MYTH: “OTHER COUNTRIES GET MORE TAX FROM OIL AND GAS COMPANIES”

FACTS

• Countries like Norway and Qatar have significant direct government ownership and/or investment in their oil and gas sector, which means the government take on more of the risks and share more in the returns.

• These same countries also provide generous support and tax breaks to the sector. For example, Norway provides an annual cash refund up to the value of 71.8% for exploration costs to reduce investor risk and encourage oil and gas exploration and development.⁷

• In contrast, countries like Australia and the United States require private companies to assume the considerable financial risk of oil and gas development.

CITATIONS

1. Australian Energy Producers Financial Survey, July 2025.
2. 2025–26 Federal Budget.
3. Corporate Tax Transparency, Australian Taxation Office, November 2024.
4. LNG Taxation Estimates and Review, Wood Mackenzie, April 2023.
5. Economic contribution of the gas industry, KPMG, Dec 2024.
6. Budget 2025–26, Department of Treasury, March 2025.
7. The Petroleum Tax System, Norwegian Petroleum, October 2024.