While price spikes caused by the US-Israeli war with Iran have revived calls for higher levies on gas exports to capture a larger share for Australian taxpayers, the Queensland Resources Council maintains it is not the time for policy reform.
"Governments around the world are reassessing how exposed they are to external supply shocks," chief executive Janette Hewson told a Senate inquiry into gas levies.
"Australia is no different.
"In that context, maintaining reliable domestic gas production and investment-grade policy settings for gas is fundamental to our nation's economic security and national security."
Higher levies on gas exports also risked weighing on domestic supply and pushing up prices for local users, Shell Australia country chair Cecile Wake told senators.
Resources industry representatives fronted the inquiry as momentum builds for a tougher levy regime for gas exporters, with a flat 25 per cent tax on revenues generating the most attention.
Several crossbenchers, as well as Liberal industry spokesman Andrew Hastie, Commonwealth Bank chief executive Matt Comyn and Labor backbencher Ed Husic, support raising taxes on gas exporters in the May budget.
The government has not announced plans to implement a tougher export tax regime, but has requested Treasury modelling on new levy options.
The shortcomings of the Petroleum Resources Rent Tax (PRRT), the federal mechanism for taxing resource profits, were well canvassed in the first batch of hearings.
Critics say the tax is poorly structured for modern LNG projects as it allows overly generous deductions for capital expenditure.
Centre for International Corporate Tax Accountability and Research principal analyst Jason Ward said the PRRT was not a bad regime for oil but was completely unsuitable for Australia's booming offshore gas industry.
"Years ago, when we reviewed comparative tax and royalty regimes, the only country which appeared to be worse than Australia in collecting a fair return was the United Kingdom," he said on Wednesday.
Since then, the UK has implemented a windfall profits tax on energy companies.
The Centre for International Corporate Tax Accountability and Research and the Tax Justice Network Australia also dismissed industry suggestions tax changes would threaten future investment and create sovereign risk as a "scare tactic".
"The only sovereign risk is that Australia will continue to generate little or no government revenue from the boom in LNG exports while rising domestic energy prices decimate local businesses and continue to put a growing strain on household budgets," they said in a joint submission.
Shell Australia paid $109 million in PRRT last financial year, according to Ms Wake, and had not paid any in the past decade while projects were under construction.
The company is paying the federal tax on the Gorgon project and expects to pay the levy on the Prelude facility from 2027.
The industry claims its overall tax burden is significant, totalling $22 billion in 2024/25 when all levies and royalties are considered.
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