Australians have had it with mining companies. A gas exports tax is inevitable

Opinion

May 1, 2026 — 5:00am

Sometimes, the imperatives of policy and politics refuse to align. That’s one way of understanding Australia’s journey with taxing its natural resources. If ever there was a favourable time for this policy, it was during the mining boom of the Rudd-Gillard years. The Henry tax review had recommended the tax after the surging price of iron and coal delivered mining companies huge super-profits.

But the politics proved unconquerable. The Coalition ran unanimously and vehemently against it, while the resource sector pumped tens of millions of dollars into an advertising campaign. The basic argument, that this would be a dead weight on the nation’s prosperity, proved persuasive. The episode was one of the key reasons for Kevin Rudd’s sudden demise. Julia Gillard’s passed a watered-down version that raised a fraction of what the government forecast before the Abbott government repealed it entirely.

Today, the politics look transformed. At issue this time is tax on gas exports. What once devolved into a crude left-right war cannot be so neatly categorised now. Naturally, the Greens still support it, and have just led a parliamentary committee on the idea. But Andrew Hastie, the Coalition’s industry and sovereign capability spokesperson who is widely tipped to be the next Liberal leader, has repeatedly signalled his openness to the idea. He has explicitly declared multinational companies such as these resources giants have lost their “social licence”.

Polling shows support for a gas export tax is strong across the partisan spectrum, and strongest among One Nation voters. Add the fact there is significant agitation among Labor backbenchers and rank-and-file members for this, and the political conditions could hardly be more favourable. Kevin Rudd could only have dreamed of having such political cover.

And yet, on the policy front, it is “the worst possible time” to introduce this tax, said the prime minister this week. Here, he’s referring to the fact we find ourselves in “the middle of a global fuel crisis”, while being massively reliant on our Asian partners for petrol and diesel. Helpfully, they are reliant on us for gas. So Anthony Albanese has spent weeks jetting from Singapore to Malaysia to Brunei to ensure business remains as usual, even when the constraints arrive in earnest. The idea is to preserve these relationships, to avoid all sudden moves. A gas export tax, argues Albanese, would “jeopardise these partnerships, or the investment that underpins them”. Accordingly, Albanese “confirm[ed] that the budget will not undermine existing contracts on gas exports”.

My hunch is that in ordinary circumstances, Albanese would quite like to introduce a gas tax of some sort. We know his own department asked Treasury to model a new gas super-profits tax. We know the Iran war has blown his government’s original plans for next month’s budget off course: that it will be slightly less bold than it was shaping up to be. And the prime minister’s wording leaves him room to move in future: note the reference only to “existing contracts”, for example.

But if that’s true, it only underscores the significance of Albanese’s declaration. By emphasising the precarity of the moment, and the premium on keeping our Asian suppliers happy, he’s not making a primarily economic argument. He’s making a largely diplomatic one. He’s not really entering a debate about whether a gas tax would stymie investment or cause gas prices to rise in, say, Japan. He’s saying the country’s most valuable asset in this acute crisis is the goodwill between interdependent nations. That interdependence constrains us. The problem therefore isn’t that the Albanese government thinks a gas tax is inherently a bad idea. It’s that we lack the sovereignty to implement it.

That leaves the government standing on this moment’s most prominent political faultline. The electorate that punished the Rudd-Gillard government’s mining tax was one that still believed broadly in the liberal economic promise. The electorate now clamouring for a similar tax has lost that faith. Especially within conservative circles, it seeks to assert precisely the sovereignty the Albanese government is admitting we lack. The most proximate example came this week in the Coalition’s policy to double our minimum fuel reserves, at cost both to the budget and Australian consumers. This adds to its call for new oil refineries in Australia, having watched four of them close during its nine years in government. And since those refineries would need crude oil to refine, it follows that we’d need to tap more of our oil reserves. In this way, the politics of sovereignty compounds.

This style of politics promises something approaching self-sufficiency, which is highly attractive at a moment of vulnerability such as this. The trouble is the promise is so much easier than the practice. Those refineries shut because they were uneconomic. Our two remaining ones survive by government subsidy. We’ve stopped extracting our oil reserves for a similar reason. Our demonstrated reserves will run out within seven years. Whatever else is out there is unproven, expensive to confirm and extract, and might turn out not to be a useful kind of crude oil anyway. If companies thought it worth their while to explore this, they surely would have done so. And even if they started tomorrow, and even if they discovered a useful product to be extracted, it’s something like a decade before it would turn up at an Australian bowser.

By that stage, today’s acute crisis will probably have passed. By then, who knows how many heavy vehicles will be electric, how much of our energy will be renewable, and how that might affect our dependence on oil? Whatever the case, the interdependencies this moment has revealed will clearly remain.

But that doesn’t mean the thirst for sovereignty will have been quenched – indeed, that seems unlikely given public disillusionment with the liberal order began growing well before this crisis. That would leave the government with a tension to manage, between sovereign aspirations and globalised reality: a tension something like a gas tax – an assertion of sovereignty – could well relieve. And perhaps, if all that comes to pass, we might witness one of those rare moments where both policy and politics chime.

Waleed Aly is a broadcaster, author, academic and regular columnist for The Age and The Sydney Morning Herald.

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