The Albanese government is poised to dump plans for a windfall tax on gas exports in next month’s federal budget, with insiders citing grave concerns over national fuel security and diplomatic fallout.
While Treasurer Jim Chalmers had reportedly been receptive to the new revenue stream, government sources suggest the proposal has been shelved to avoid antagonising vital trading partners like Japan, South Korea, and Malaysia.
The shift comes as Australia finds itself "cadging" critical diesel supplies from these nations. With the global energy landscape destabilised by Middle Eastern tensions, Cabinet remains wary that a tax raid could trigger retaliatory supply disruptions.
While petrol reserves remain stable at 46 days, a diesel shortfall would prove catastrophic for Australia’s mining, heavy transport, and agricultural sectors.
Prime Minister Anthony Albanese has begun publicly echoing the industry’s own warnings, arguing that a windfall tax could jeopardise the "tens of billions" in foreign investment required for extraction.
"We need an honest debate," the prime minister stated, noting that gas giants already contribute significantly through company tax, expected to reach nearly $22 billion this year.
He further dismissed claims that beer generates more tax revenue than gas as "distorted".
Independent MP Allegra Spender labelled the decision "unacceptable", arguing that failing to reform the petroleum resource rent tax essentially gifts national wealth to multinationals.
"Giving away Australian gas for free is ridiculous," she said. "Once it’s exported, it’s lost from our national wealth forever."