Australia's upcoming federal budget is expected to give fossil fuel industries what they want, despite growing public support for a tax on gas exports and reforms to fuel tax credits. This comes as representatives from 57 nations meet in Colombia for the first international conference on transitioning away from fossil fuels, where France announced plans to eliminate coal by 2027, end oil dependency by 2045, and stop using fossil gas by 2050.
Gas Tax Campaign Gains Traction but Faces Opposition
A campaign for a 25% levy on gas exports has drawn support from across the political spectrum, including the Greens, One Nation, Senator David Pocock, independent MPs, and even potential Liberal leader Andrew Hastie. Beyond Canberra, support includes unions, economists, former bureaucrats, ex-gas industry executives, and environmental groups. The Australia Institute estimates the tax would have raised $70 billion if introduced when Labor was elected in mid-2022. An Essential poll found 57% of voters support taxing gas export profits, with only 12% opposed.
Despite this, Prime Minister Anthony Albanese has ruled out changes affecting existing gas export contracts, assuring the mining and gas industry in Perth that the budget will not undermine them. While Treasury has modeled a windfall profits tax and changes to the petroleum resource rent tax, Albanese dismissed criticisms as dishonest and populist, leaving little hope for immediate reform.
Fuel Tax Credit Scheme Under Scrutiny
The fuel tax credit scheme, which gives miners, farmers, and heavy freight operators a full rebate on the 52.6 cents per liter diesel excise, has also faced calls for reform. Mining magnate Andrew Forrest's company Fortescue launched an advertising campaign arguing that 18 major mining companies receive $3 billion annually, while households struggle with rising costs. Fortescue proposes capping the rebate at $50 million per mining company, with savings directed to emissions reduction or general revenue. Others, including ACTU and Climate Change Authority chair Matt Kean, have described the rebate as "insane."
However, hopes for change faded when the US-Israel conflict with Iran pushed diesel prices higher. The government's focus on securing long-term fuel supplies may reinforce perceptions that Labor is captured by fossil fuel interests, especially if the budget does not accelerate the shift to clean energy.
Climate Commitments and Future Outlook
While Labor supports renewable energy and batteries, there is less enthusiasm for reducing fossil fuel use. Analysts warn that seaborne trade of coal, oil, and gas must be wound down within decades to meet climate commitments. Campaigners remain optimistic, noting that the surge in cross-community support for a gas tax suggests change is possible, and they pledge to continue pushing for reform regardless of the budget outcome.
