Bakers pay for flour, builders pay for bricks. Gas companies should pay for gas: Richard Denniss

Australia has spent decades giving away its gas for free because politicians and senior officials have been unwilling to admit they were “conned” by the industry, according to Australia Institute co-CEO Dr Richard Denniss.

Speaking on his What’s the Point podcast, the prominent economist said policymakers in the late nineties and early 2000s “fell for this magic pudding”, believing the gas industry would one day “pay a lot of tax and we’d all be rich”.

“And guess what? Spoiler alert: it didn’t happen,” he said.

Dr Denniss argued successive governments have been persuaded to give the gas industry favourable access to Australian resources on the promise it would one day generate substantial tax revenue, which he said never materialised.

“Some really overconfident, overwhelmingly male and very well-paid policymakers in Australia … were conned,” he said, “and they don’t want to admit how badly they got it wrong.

“So, we’re stuck with this bad system to protect their embarrassment.”

Thirty years on, he argued Australians are still being cheated out of billions of dollars.

“Australians are the suckers handing our gas away for free to foreign-owned gas companies so that they can make enormous profits and pay enormous dividends to their foreign shareholders,” he said.

“Builders have to pay for bricks, bakers have to pay for flour. It’s pretty obvious that the gas industry should have to pay for gas.”

Australia Institute research shows voters across the political spectrum overwhelmingly support a 25 per cent tax on gas exports, which modelling by the Canberra think tank shows could raise an estimated $17 billion in revenue each year.

However, Prime Minister Anthony Albanese ruled out a new levy in April, criticising it as a “populist push” and arguing it was the “worst possible time” to jeopardise key trading partners during a period of global uncertainty.

The decision earned the ire of politicians across party lines.

“I am appalled but not surprised to see the Albanese government caving to gas companies,” said independent senator David Pocock at the time.

Dr Denniss said there was little point in having a gas industry that doesn’t benefit the nation.

Polling released by the Australia Institute in April showed seven in ten voters nationwide agree gas export companies should pay a 25 per cent gas export tax, including four in five Labor voters.

“I think Australians are increasingly aware that we can’t have a health or education system that’s as good as the Scandinavians if we want to have a tax system that looks like America’s,” Dr Denniss said.

In his 25 years as an economist, he said he’d never seen the public campaign so strongly for a new tax.

“I’ve never come across an issue that makes people just want to walk up to me on the street and talk about tax the way the gas tax has motivated people,” he said.

“This reflects a really important sentiment in Australia today.

“Australians want to see things get better.”

The Australia Institute and the Greens have proposed holding a national plebiscite on introducing a 25 per cent gas export tax.

“I feel some sympathy for the Prime Minister. He’s afraid of having a fight with the gas industry,” said Dr Denniss.

“This government has to be more afraid of angry voters than they are afraid of angry gas shareholders. It is as simple as that.”

He argued Australia only gets one opportunity to profit from its gas resources, warning that every year reform was delayed represented billions of dollars in lost public revenue.

“We never get the chance to sell it again,” he said. “We only get to export our gas once.”

What’s the Point? with Richard Denniss explains the political and economic decisions shaping the lives of everyday Australians lives, answering key questions along the way. By getting straight to the point, Richard helps listeners understand how democracy works and why it matters.