As Christmas is the season of giving, it is perhaps an opportune time to check how much – or how little – the fossil fuel industry actually contributes to the Australian economy and government revenues that fund essential public, community and welfare services.
Mon 29 Dec 2025 06.00
Image: AAP Image/Richard Wainwright
The fossil fuel industry and its representative bodies are forever keen to talk up their importance to Australians in terms of employment, contributions to government revenue, and economic output (or Gross Domestic Product (GDP). Woodside, a major fossil fuel producer, even likes to sell the message through TV and online advertisements.
As Christmas is the season of giving, it is perhaps an opportune time to check how much – or how little – the fossil fuel industry actually contributes to the Australian economy and government revenues that fund essential public, community and welfare services.
While the barrage of claims about how much the fossil fuel industry gives to the Australian economy and government revenues may leave the impression that these companies are gifting generously to all Australians, an analysis of the relevant data, combined with practical comparisons, suggests their generosity maybe no greater than just a lump of coal.
As The Australia Institute has repeatedly pointed out, the fossil fuel industry, like the mining industry, is one of the smallest employers in the country. The coal, oil and gas industries, including exploration and mining services support staff, employ just 77,000 people, or 0.6% of the Australian workforce. In comparison, there are over 400,000 nurses and midwives, over 320,00 teachers, and over 1 million retail workers employed in Australia.
On these figures, in the 90,000-plus crowd at the MCG Boxing Day test match, there will be just 549 workers from the fossil fuel industry, compared to 2,900 nurses, 2,300 teachers, and over 7,700 retail workers.
When it comes to government revenue, recent claims from Australian Energy Producers that the oil and gas industry delivered record taxes and royalties need to be placed in context.
While the $21.5 billion paid by the oil and gas industry is a significant amount of money, it represents just 2.2% of the $975 billion in total state and federal government revenues collected in 2023-24. Adding in estimates for the coal industry using data from the Minerals Council of Australia increases the fossil fuel industry’s contribution to government revenue to 4.3%. But that still means that for every $100 of government revenue, over $95 comes from sources outside the fossil fuel industry, the biggest share being income taxes from working Australians, which account for $39 in every $100.
Importantly, 38% of the fossil fuel industry’s government revenue contribution comes from royalties, rather than taxation. Royalties are not taxes; they are a payment for the use of mineral and fossil fuel resources that belong to Australians. Describing royalties as a tax contribution is like a builder describing the cost of the bricks they use as a tax.
On a taxation-only comparison, the fossil fuel industry’s contribution to total state and federal taxation falls to just 3.4%. That means that less than four in every 100 dollars of tax collected comes from the fossil fuel industry.
One area in which the fossil fuel industry is somewhat generous is in its contribution to annual economic output, or GDP. Claims that the fossil fuel industry is a significant contributor to GDP are not without merit. The 5% contribution that fossil fuels make to GDP can, for the most part, be attributed to large export revenues generated by selling fossil fuels to other countries, particularly Japan, Korea, and China. However, other industries make a much larger contribution to GDP, including health care (8% of GDP), finance (7%), and construction (7%).
Moreover, most of this export revenue is profit paid to the predominantly foreign-owned fossil fuel companies. Over 77% of the fossil fuel industry’s annual contribution to GDP is profit. In this light, the fossil fuel industry’s contribution to GDP is more of a gift to itself than to all Australians.
So, while the fossil fuel industry and its lobby groups proclaim to gift a cornucopia of generous presents, the data shows their gift is more like an office party Secret Santa trinket, easily forgotten and ignored when the genuine, heartfelt gifts are delivered on Christmas morning.
The latest tax expenditure figures released on Friday by the Treasury department show this financial year the richest 10 percent of Australians will receive $18bn worth of tax breaks from the capital gains tax discount – nearly 5 times more than everyone else.
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