From gas to big tech: Richard Denniss warns Australia is falling for the same old trick

Australia’s political class is being played by the world’s best negotiators, with prominent economist Dr Richard Denniss arguing the global gas industry has weaponised the nation’s insecurities and fear of missing out.

Speaking on a webinar about his new Vantage Point essay, the Australia Institute’s co-CEO said it was “pathetic and embarrassing” that Canberra continued to fall for the industry’s flattery and false promises that other countries saw straight through.

“This fear of missing out, this insecurity that all foreigners won’t invest here if we don’t give our resources away for free and not charge them any tax – that FOMO (fear of missing out), that insecurity, is being weaponised by the world’s most profitable companies at the moment,” he said.

He argued it wasn’t just the gas industry conning the country, warning the AI industry is also now “running the same script”.

“Here’s how it plays out. When the gas industry comes to us, they offer to do us a favour.

“They say, ‘I would like to invest in Australia. I would like to build a gas export facility here for me. I’ll be using it. Would you like to attract my investment? Would you feel validated if I were to come and invest in you? Because to induce me to do this, you just have to give me free gas.’”

However, he said Australians are realising the deal “doesn’t stack up”, leading to overwhelming cross-party support for a 25 per cent tax on gas exports.

“There is nothing more powerful than an idea whose time has come,” said Dr Denniss, who has been championing the cause for the past 15 years.

Australia is often compared with other large gas exporting countries such as Norway, Saudi Arabia and Qatar.

While critics have pointed out that they’re all vastly different, Dr Denniss argued the three have one thing in common – “they’re heaps better at getting tax out of the gas industry than we are”.

Australia and Qatar export similar volumes of LNG; however, Qatar raises around five times more government revenue from these exports.

“Does that mean we have to do it exactly the same as Qatar? No,” he said.

“We’re saying that we could do a lot better, and the people saying not to compare us to Norway are simultaneously saying we should cut our company tax rate because it’s lower in China or in the US.”

Oil and gas companies that operate in Australia reported contributing $105 billion to the national economy as of February; however, Dr Denniss said the way the nation measures the economy is “problematic”, likening gross domestic product (GDP) to a household’s income.

“Imagine if a billionaire comes and moves into our spare room, doesn’t pay rent, doesn’t pay board, makes a mess,” he said.

“Their income now counts in our household income. Do you feel richer? But they’re under our roof, right?

“So, the statistical framework that says if you’re in the house, that’s your household income. Well, that’s kind of like saying, if a foreign-owned company is on your soil, then that’s your economy.”

The trouble is, he said, while profits may increase, they’re being funnelled offshore.

“That’s one of the reasons why the economy is allegedly growing, but people feel like things are getting worse,” he said.

“Things are getting worse. Real wages have fallen. Electricity bills have gone up. Gas bills have gone up. Petrol bills have gone up. Profits have gone up, but those profits are getting posted, to America for Chevron, Japan for Impex.”

He said Australia should have taken a leaf out of Japan’s book in the 1970s when it started taxing coal and gas imports to build strategic reserves of liquid fuel for emergencies.

“The Japanese are much smarter than us. They’re laughing at us. They’re too polite to laugh in our face, but they can’t believe what a mark they met when they started to take our gas,” he said.

“Today Japan collects more tax on their gas imports than Australia collects on its gas exports.”

The comparison showed Australia had accepted a far weaker deal than many of its trading partners.

Dr Denniss said it was time Australian politicians started doing their job.

“We seem to think that foreign companies are always doing us a favour … we need to stand up for ourselves if we’re going to get a good deal. That’s what the job is. That’s what we’re voting for people like Albo and Angus to do,” he said.

Their next test is already upon them, with Big Tech in negotiations with governments about data centres.

Dr Denniss said they need to be aware of the “same trick” used by the gas industry.

“If the people who negotiated the gas deal can’t admit it’s a dud, we should never let them negotiate on intellectual property.

“If they could demonstrate they’ve learnt from the past, maybe I’d have faith in them but if you’re defending the gas deal and going to go talk to the world’s most powerful AI companies, the red light should be flashing in voters’ minds.”

Dr Richard Denniss’ new Vantage Point essay, More Fool Me: How the gas industry tricked Australia is available now.