Allegra Spender calls for windfall profits tax on war-driven oil and gas profits

Independent MP Allegra Spender has called for an urgent windfall tax on gas and oil companies raking in “extraordinary profits” from the escalating conflict in the Middle East.

The Member for Wentworth is pushing for Treasurer Jim Chalmers to introduce a tax of at least 50 per cent on revenue earned above expected levels due to global supply disruptions.

“The supernormal profits made by a few companies during this time is not a reward for effort or ingenuity, or a driver of investment, it is the windfall from war.”

The economic fallout is already being felt as key supply routes are disrupted and major exporters are sidelined, with the International Energy Agency (IEA) warning it is “creating the largest supply disruption in the history of the global oil market”.

“The Middle East produces 30 per cent of global oil and 17 per cent of gas. LNG shipments from Qatar and the United Arab Emirates, accounting for 20 per cent of global supply, are now off market,” Ms Spender said.

“Disrupted supply chains create price volatility, hurting consumers everywhere, while generating extraordinary profits for a handful of companies.”

ACTU President Michele O’Neil went further, arguing, “The world’s biggest resource companies should not be seeing their coffers swell because of unchecked profiteering in a time of war”.

The current crisis is following a familiar pattern, echoing the global energy shock triggered by Russia’s invasion of Ukraine in 2022, which saw oil prices double and gas prices quadruple in some regional markets.

“This is history repeating itself,” said Ms O’Neil.

“During the 2022 Russia-Ukraine war, multi-national gas corporations made well over $40 billion in windfall profits, while workers were left struggling with rising prices.

“It would be a national shame if we let the same thing happen again just four years later.”

Ms Spender argued the gains from these disruptions should be returned to the Australian public to pay down government debt.

“These are Australian resources, and the Australian public deserves to share in these gains from war driven price spikes.

“When Australian consumers pay the price, Australians should share the profits.”

Her concerns have been echoed by the Australia Institute.

“Allegra Spender is right. Australians are missing out because we are failing to properly tax our fossil fuel exports,” said Australia Institute advocate Louise Morris.

“Fairly taxing fossil fuel companies isn’t radical – it’s the bare minimum to ensure Australians get a return on resources they own.”

Under the independent MP’s proposal, the tax would only apply to war driven price spikes, with existing tax settings remaining in place for normal revenue.

“This tax on supernormal revenue will not affect investment, since companies make such decisions on price expectations, not on the risk of war.

“Investing in a project that would destroy value unless prices turn out to be far above forecasts would be irresponsible of any board.”

Ms Spender has joined the growing, cross-party push for a fairer tax on Australian gas exports.

The ACTU’s proposed 25 per cent tax on gas exports has drawn support from across party lines, with independent Senator David Pocock, the Greens, and Clive Palmer’s United Australia Party all backing the plan.

Australia Institute research shows it could raise $17 billion a year, while incentivising producers to prioritise the supply of gas to domestic customers.

“A 25 per cent gas export tax would deliver steady returns and turn global gas price spikes into greater public benefit, not just fossil fuel company profit,” said Ms Morris.

She argued that the current system isn’t just unfair – it’s a policy failure.

“By failing to implement a straightforward gas export tax, Australians are missing out on tens of billions of dollars. Money that could be easing cost-of-living pressures and funding the transition to a clean energy economy.”

Ms Spender has outlined her broader tax reform ideas in a tax white paper launched at the National Press Club.