As the Iran crisis continues to drive energy costs up, The Superpower Institute is calling on the Federal government to adopt a Fair Share Levy (FSL) to ensure that gas companies pay their share of tax to boost Australia’s prosperity and ensure cost-of-living relief to Australians.
The Fair Share Levy is a Norway-style tax on the cashflow of Australian gas producers, ensuring gas companies in Australia pay their fair share of tax for extracting the gas resources that belong to all Australians.
If Australia had a Fair Share Levy in place, government revenue would have increased by $1.1 billion since the start of the Iran crisis. Over five years, 2019-2025, the Petroleum Resource Rent Tax (PRRT) has only raised $1.4 billion per year.
Rod Sims, Chair of The Superpower Institute said:
“In three weeks alone, if Australia had a Fair Share Levy in place it would have raised almost the same amount of revenue as the PRRT raises each year.
“While Australian households and businesses are being stung by extremely high fuel prices caused by the crisis, gas companies are reaping extraordinary profits from this same crisis.
“This is perverse.
“What we are proposing is not radical. It’s fair. It would mean that Australians benefit – like Norwegians do – from the extraction of their assets.
“If designed properly, the revenue it raises can be returned to households to provide significant cost-of-living relief."
CEO of the Superpower Institute, Baethan Mullen said:
“Australia's gas belongs to all Australians. But right now, we're letting companies extract these resources while paying some of the lowest taxes on gas in the world.
"Norway taxes its oil and gas at around 78 per cent, while remaining an attractive destination for investment. They now have a $1.7 trillion sovereign wealth fund that benefits every Norwegian. Australia could do the same.
“It is an immense shame that the Australian people are missing out on these windfalls. This Iran crisis has demonstrated the need for Australian fuel sovereignty but also, for Australians to reap the benefits of their resources.
“At the peak price point during the Russia-Ukraine war (FY 2022-2023), the Fair Share Levy would have raised $26.7 billion. These numbers are incredibly significant for a federal budget under stress.”