Beer, HECS and visas: things that raise more revenue than the Petroleum Rent Resource Tax (PRRT)

In Senate estimates, Senator David Pocock asked a simple question about whether the beer excise raised more revenue than the gas industry pays in Petroleum Resource Rent Tax (PRRT).

It’s true. Beer excise raises about $2.7 billion compared with the PRRT, which raises $1.5 billion.

The PRRT is a tax that is supposed to ensure that Australians get their fair share from the sale of their gas. But it is failing.

In response to Senator Pocock’s question on beer excise and the PRRT, Finance Minister Katy Gallagher pointed to changes made by the Government to the PRRT in 2023, implying that these changes had been significant.

Far from fixing the problem of low PRRT revenues, PRRT revenue is expected to fall further over coming years, while beer excise just keeps on rising, as you can see from the chart below.

Apart from beer excise, here are five other things that raise more revenue than the PRRT:

HECS/HELP repayments

HECS/HELP repayments are estimated to be $5.1 billion in 2024-25 (latest data). In that same year, PRRT raised $1.4 billion.

This means students paid back the government more on their student loans than the gas industry paid in PRRT. More than three times as much. Norway taxes its oil and gas industry and offers free university to its students. While Australia lightly taxes its gas industry and charges its students a fortune to go to university.

Spirits excise

It’s not just beer drinkers that contribute more to the budget in beer excise than the gas industry does in PRRT. Spirits excise is also larger. In 2024-25, the budget collected $3.3 billion from spirits excise. In that same year, the PRRT raised only $1.4 billion.

Visa application charges

Foreigners coming to Australia are also expected to contribute more to the budget in visa application charges than the PRRT. In 2024-25, visa applications collected $4.2 billion (three times the revenue collected from the PRRT).

Tobacco excise

The tobacco excise is estimated to raise $7.8 billion in 2024-25. This is much higher than PRRT.

Because of an explosion in the sale of illegal cigarettes, the tobacco excise is expected to fall to $4.4 billion in four years’ time. But the PRRT is also expected to fall. In four years, PRRT will still be much lower than tobacco excise at $1.1 billion.

Major Bank Levy

This is a less well-known source of revenue. Australia’s biggest five banks, Commonwealth, Westpac, NAB, ANZ, and Macquarie, all pay an additional levy. It’s not a huge amount, but it is bigger than the PRRT. The Major Bank Levy is estimated to be $1.8 billion in 2024-25, which is $400 million more than the PRRT.

While the PRRT has collected a fraction of the revenues from oil and gas company profits over the past 10 years, Australians have been contributing more to the government’s coffers in HECS repayments, beer, tobacco and spirits excises, and the Major Bank Levy. Even foreigners have been contributing more in visa application fees.

It is time for Australia to tax gas fairly, and a straightforward way to do that is with a 25% gas export tax.