Opinion article in The West Australian by Samantha McCulloch, Chief Executive of Australian Energy Producers, 24 April 2026.
Western Australian Premier Roger Cook delivered a much-needed reality check this week in response to calls for higher taxes on Australian gas companies.
As Premier Cook confirmed, this proposal would not be good for WA’s economy or energy security.
The Premier’s opposition to new taxes on one of the state’s most important industries is not surprising – WA would be hardest hit by higher taxes on LNG exports, offshore gas projects, or both.
This should concern all Western Australians because WA’s oil and gas industry is a key driver of the state’s economy and energy security.
WA gas produces almost 60% of the state’s electricity and more than half the energy used by the mining sector. The industry contributes more than $35 billion a year to the WA economy and supports around 74,000 jobs across the state.
The current global energy crisis has brought the importance of Australia’s oil and gas industry to the nation’s attention. Domestic gas prices remain stable and well below soaring international prices, and our LNG exports are helping secure the continued supply of liquid fuels into Australia from countries like Japan, Korea, Malaysia and Singapore.
You would think that this would give activist groups cause to pause their attacks on WA’s gas industry. Instead, it’s emboldened their relentless attacks.
A Greens-led Senate Inquiry into the taxation of gas resources has already heard a litany of misleading claims, cherry-picked figures and outright lies from anti-gas groups.
Among the most common myths is the claim that gas companies don’t pay their fair share of tax, and that the current tax system doesn’t collect more tax when company profits are up. Both are demonstrably wrong.
First, the Australian oil and gas industry is in fact Australia’s second largest corporate taxpayer, the Australian Taxation Office data shows. The industry paid $21.9 billion in taxes and royalties last financial year – equivalent to the annual cost of the Pharmaceutical Benefits Scheme.
Second, our tax system – including the Petroleum Resource Rent Tax (PRRT) that applies to offshore oil and gas projects – is already designed to ensure government taxes and royalties increase when international prices are high. Treasury and the ATO confirmed this in their evidence to the Senate inquiry this week.
New analysis by Wood Mackenzie released today reaffirms this, finding that if oil prices were to remain elevated (US$120/barrel), Australian governments would receive over $80 billion extra in taxes and royalties over the next five years, compared to recent pre-war international prices (US$70/barrel).
This would net governments almost $160 billion in taxes and royalties from the oil and gas industry over this period – nearly $17 billion per year more.
Importantly, the analysis shows that the PRRT would see the biggest uplift in tax paid. A 70% increase in oil price would almost treble PRRT revenue, from $13.5 billion to $38.9 billion over five years.
A range of proposals for higher taxes have been put forward, but the end goal of the proponents is the same: to tax the oil and gas industry out of Australia.
The current fuel crisis should be a wake-up call that we cannot let our gas industry become the next essential energy sector to be driven out of Australia.
We know how that story ends, because we’re living with the consequences of allowing the demise of Australia’s oil and refining industry, and Australians are paying the price for this policy failure every time they fill up.
It shouldn’t need to be said that this would be the worst possible time to impose an investment-destroying tax on an essential energy sector and put Australia’s energy security at risk.
Wood Mackenzie’s analysis found that a 25 per cent export levy would push effective tax rates on some projects above 80 per cent and reduce project value by up to 94 per cent, rendering Australia uninvestable. Over time, tax revenue would actually be lower as a result of foregone investment.
There will be many lessons for Australia on the other side of this global energy crisis. Key among them is that we cannot take our energy security for granted, and Australia must make all efforts to ensure we continue to produce essential energy to maintain and improve our self-sufficiency.
Australia has significant undeveloped oil and gas resources to strengthen both domestic energy security and our position as a reliable partner in the region. At a time of heightened global uncertainty, that is a huge advantage that should not be squandered.
Realising that opportunity depends on stable, predictable and competitive policy settings that support long-term investment.
For decisionmakers, the choice before them is clear: Australia must choose the path of stability, investment, and energy security. Our country’s future depends on it.
