To: The Treasurer of Australia, the Hon. Dr Jim Chalmers MP, The Prime Minister of Australia, the Hon. Anthony Albanese MP
Securing Australia’s Resource Wealth for Future Generations
The Problem: A Failing Tax System for Finite Resources
Australia is one of the world's largest exporters of liquefied natural gas (LNG) and iron ore, yet the Australian people are not receiving a fair return for the permanent extraction of these finite national assets.
Under the current Petroleum Resource Rent Tax (PRRT), the government has projected to collect more revenue from HECS/HELP repayments and beer taxes than from the profit-based tax on our offshore gas resources.
Under the current Petroleum Resource Rent Tax (PRRT), the government has projected to collect more revenue from HECS/HELP repayments and beer taxes than from the profit-based tax on our offshore gas resources.
For the 2025-26 period, taxes on beer are expected to reach $2.7 billion, while the PRRT is expected to raise only $1.5 billion. Furthermore, research indicates that the gas industry pays zero royalties on more than half of the gas exported from Australia. While multinational companies report record-breaking revenues—reaching $55 billion in 2023—the PRRT payments were lower in 2023 than they were in 2001.
Our current system allows companies to exploit tax structures by waiting until all capital investment and "uplift factors" are recovered before paying significant PRRT. This means many projects may never pay the tax before the resource is exhausted.
The Action Required: Meaningful Reform and Direct Royalties
We demand the Australian Government take the following immediate legislative actions:
- Amend the PRRT to Match Global Standards: Increase the effective tax rate on oil and gas to align with successful international models. Norway, for example, has imposed a 56% "special tax" on oil and gas profits alongside a 22% corporate tax rate since the mid-1990s.
- Implement a Flat Export Tax or Royalty: Introduce a royalty on the raw resource at the point of extraction, rather than the final refined product.
- Reform Land-Based Resource Taxes: Apply similar indexed royalties to iron ore and other minerals based on the spot price of the raw ore. This prevents companies from using complex balance sheets and internal "refined product" valuations to reduce their tax liabilities.
- Establish a Permanent Sovereign Wealth Fund: Direct all additional revenue from these reforms into a national fund, modeled after Norway’s A$1.9 trillion fund, which currently holds approximately $350,000 for every Norwegian citizen.
The Reason: Why Australians Deserve This Wealth
Once these resources are extracted from the ground or the seabed, they are gone forever. It is a matter of national interest that the wealth generated from these one-time assets is used to benefit every Australian, not just corporate shareholders.
By securing a fair return on our resources, Australia could fund:
- Free Education: Eliminating the burden of HECS/HELP debts that currently raise more revenue than the gas industry.
- Universal Healthcare: Strengthening the Medicare system and hospitals.
- Public Infrastructure: Providing free or heavily subsidised public transport to reduce the cost of living.
We must stop "socialising the losses" of corporations while their profits are exclusively privatised. It is time to treat our natural resources as the shared inheritance of all Australians
Why is this important?
"Look, imagine we find a chest of gold in our backyard. Right now, it feels like we’re letting some big company come in, take the gold, and leave us with a couple of bucks and a hole in the ground. Once that gold—our gas and iron ore—is gone, it’s gone forever"
This isn’t just about ‘more tax’; it’s about making sure our kids aren’t the ones paying for it later. Here’s why I care so much:
- A Fair Go for Everyone (The 'Norway' Story): In the 90s, Norway decided to tax their oil at 78%. They didn’t blow it; they put it in a 'piggy bank' (a sovereign wealth fund) that’s now worth over $2 trillion. That’s nearly $340,000 for every single Norwegian citizen. Meanwhile, Australia is set to collect more from student HECS debts than from the tax on our offshore gas. It just doesn't sit right that students are carrying a heavier load than billion-dollar gas giants.
- Unlocking Potential through Education: Imagine if any Australian—no matter where they grew up or how much their parents earned—could go to uni or TAFE for free. We’d have a more skilled workforce, which research shows could boost our GDP by billions because a 1% increase in R&D investment alone can grow the economy by hundreds of millions. It’s about being a 'clever country' again.
- Health Security for Life: We all love Medicare, but it’s under pressure. If we had a massive fund backing it, we wouldn’t need to worry about expensive private health insurance just to get a surgery. It would be world-class healthcare for everyone, paid for by the resources we already own.
- Cleaner, Easier Commutes: Free public transport would be a game-changer for the cost of living—saving the average person around $5,500 a year. Plus, if we used that wealth to build a green, emission-free network, we’d be slashing our carbon footprint while making our cities less congested and better to live in.
Basically, we’re sitting on a goldmine, but we’re acting like we’re broke. If we fix these taxes, we can build a future where 'prosperity' isn't just a word for shareholders, but something every Australian feels in their pocket and their daily life."
