Australia's Gas Industry Profits Soar as Households Struggle: A Case for a Fair Share Levy

The Albanese government is likely to introduce an extra levy on gas producers' high profits in response to the Iran crisis driving up energy costs for Australians. The prime minister's department has requested Treasury modelling of additional levies on gas companies, stating that energy producers 'should not benefit from high international prices at the expense of domestic customers'.

Australia's gas industry is reaping extraordinary profits while households and businesses struggle with high fuel prices. This has sparked calls for a fair share levy to ensure gas companies pay their fair share of tax. The levy, based on Norway's taxation model, would see Australia share around 50% of profits, much more in line with world standards.

Currently, Australia shares only 27% of fossil fuel profits, with some estimates as low as 18% when profit is defined in cashflow terms. In contrast, other major fossil fuel exporting countries typically share between 75% and 90% of profits.

The fair share levy would provide significant and immediate cost-of-living relief if some of the revenue raised was returned to households. Research shows 87% of voters support a fair share levy, with only 3% disagreeing.

Despite potential outrage from the gas industry, the levy is designed to not increase gas prices or deter investment, as seen in Norway's successful implementation. A stable, long-term commitment to the fair share levy would provide investment certainty.