Australia's largest gas exporters set to reap $18bn war-driven windfall, reigniting calls for 25% gas tax

Australia’s largest gas exporters are set to receive an unexpected $18 billion revenue windfall over the next year, due to the fallout from conflict in the Middle East, reigniting calls for the Albanese government to introduce a 25 per cent tax on gas exports.

LNG export earnings are now forecast at $65 billion in real terms, compared with an earlier prediction of $47 billion in December last year.

The Department of Industry, Science and Resources also revised its estimate for export earnings in the past financial year upwards by $6 billion.

“These war-driven windfall profits are about to arrive, and Labor is still refusing to make the gas giants pay what they owe,” said the Greens’ resources spokesperson, Senator Steph Hodgins-May.

The recent disruptions in global gas markets are due to conflicts in the Middle East, particularly around the Strait of Hormuz, a critical shipping route for global energy trade.

While previous forecasts assumed oversupply from the US and Qatar, the Office of the Chief Economist noted that the “conflict in the Middle East has flipped LNG markets from expected oversupply to expected undersupply for the next two to three years”.

Australia’s resources sector more broadly is now expected to generate record export earnings, climbing to $416 billion in 2026-27 (in nominal terms).

However, the department notes that price falls will “offset the impact of higher volumes in the outlook period”, with exports forecast to fall to $371 billion in nominal terms in 2030–31.

The revised forecasts have intensified calls for a 25 per cent gas export levy.

Independent senator David Pocock told The Guardian the latest forecasts had only strengthened his resolve to push for higher taxes on gas exports.

“Our campaign for a gas tax isn’t going away and huge wartime revenue for gas companies again underscores how, as Australians, we are missing out on a fair return from the sale of our finite resources,” he said in a statement.

“Time and again we’ve seen the Albanese government caving to vested interests, from gas to gambling, and it has to stop.”

The Australia Institute and the Greens have been pushing for a national plebiscite on a gas levy, arguing the public should get a direct say on the issue.

Analysis shows Liquefied Natural Gas (LNG) export prices more than doubled after the Russian invasion in February 2022.

If the then-newly elected Labor government had immediately imposed a gas export tax starting on 1 July 2022, it would have raised $73 billion by now.

“While Australia obviously can’t go back in time and implement an efficient gas export tax, these figures show how incredibly expensive delaying the introduction of a gas export tax is,” said Dr Denniss.

Independent MP Allegra Spender called for an urgent windfall tax on gas and oil companies in March 2026, arguing “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.”

Despite a growing cross-party push for the levy and strong public backing, Prime Minister Anthony Albanese ruled out a gas export levy ahead of the May budget.

In an April speech to the Chamber of Minerals and Energy of Western Australia – which represents many of the state’s largest mining and energy companies – the PM said it was the “worst possible time” to introduce a levy, claiming it would jeopardise key trading partnerships.

Senator Hodgins-May argued now is precisely the right time.

“Australians did not ask for this illegal war,” she said.

“But if the government had the courage to stand up to the gas lobby and introduced a 25 per cent gas export tax in May’s Budget, billions of dollars from this windfall could be flowing back into lower energy bills, stronger public services and real cost-of-living relief instead of into offshore profits.”