#gas #coal #ironOre #mining #taxation #BHP #HancockProspecting #Chevron #ExxonMobil #Glencore
The Great Australian Rip-off
In the heart of Australia’s vast landscapes lie abundant natural resources—coal, iron ore, and natural gas—that have long fuelled both domestic industries and international markets.
Yet, beneath the surface of this economic boon lies a paradox: while multinational fossil fuel companies reap astronomical profits from these resources, their contributions to Australia’s tax revenue remain disproportionately low, or even non-existent.
Simultaneously, these entities, often foreign-owned, benefit from significant government subsidies, raising pressing questions about equity, sustainability and national interest.
This is not just a missed opportunity. This is a national failure on a grand scale. It is also not a recent development. This has been ‘business as usual’ for many years and successive governments.
Taxation: A Disproportionate Contribution
Australia’s tax framework for fossil fuel companies encompasses several components:
Corporate Income Tax: Levied at 30% on company profits.
Petroleum Resource Rent Tax (PRRT): A tax on profits from the extraction of oil and gas resources.
State Royalties: Payments to state governments for the right to extract mineral resources.
Despite these mechanisms, many fossil fuel companies contribute minimally to the national coffers.
According to data from the Australian Taxation Office, in recent years some of the world’s biggest resource giants like Chevron, ExxonMobil, and Glencore have declared billions in income but paid zero dollars in tax.
Take Chevron, for example. It earned over $9 billion (billion with a B) in a single year from Australian operations. Tax paid? $0. That’s not an exception – that their normal.
Concerns persist regarding the proportion of taxes paid relative to the profits earned by these companies.
For instance, a report indicates that the top 20 fossil fuel multinationals operating in Australia generated $113 billion in revenue but paid only $1.3 billion in corporate tax in a recent year.
Source: https://reneweconomy.com.au/how-a-great-big-tax-on-fossil-fuel-profits-could-fix-australias-energy-crisis)
When people first hear this, the immediate reaction is ‘That can’t be right?’ These companies benefit from complex accounting tricks, generous tax loopholes, and systems like the Petroleum Resource Rent Tax (PRRT), which is supposed to ensure we get fair value from our gas reserves – but often kicks in only after companies have made enormous profits.
Subsidies: Government Support Despite Mega-Profits
In addition to minimal tax contributions, fossil fuel companies receive substantial government subsidies.
In the 2024–25 fiscal year, Australian governments provided $14.9 billion in spending and tax breaks to assist fossil fuel producers and major users, marking a 3% increase from the previous year.
This equates to approximately $28,381 per minute in government tax breaks to fossil fuel mining companies.
Source: https://australiainstitute.org.au/report/fossil-fuel-subsidies-in-australia-2025
According to The Australia Institute, key subsidies in 2024 include:
• Fuel Tax Credits Scheme: Rebates on fuel excise for off-road use, predominantly benefiting mining operations.
• Accelerated Depreciation: Allowing companies to deduct the cost of assets more quickly, reducing taxable income.
• Exploration Grants: Financial support for discovering new fossil fuel reserves.
These subsidies not only reduce the operational costs for fossil fuel companies but also represent a significant allocation of public funds that could be directed toward renewable energy initiatives or public services.
Ownership and Profit Repatriation
What makes it worse is that many of these fossil fuel companies are foreign-owned. That means not only are they under-contributing to our tax system – they’re sending the lion’s share of their profits offshore.
Australia bears the cost of environmental degradation, rising emissions and political lobbying from these industries, while the rewards vanish into the bank accounts of overseas shareholders.
Meanwhile, regular Australians and small businesses are left without any of the rewards from our resource-rich land.
A significant portion of Australia’s fossil fuel industry is foreign-owned. Companies such as Chevron, Shell, and ConocoPhillips operate major projects within the country. Consequently, a substantial share of the profits generated from Australia’s natural resources is repatriated overseas, contributing little to the domestic economy.
What Could the Increased Tax Revenue Do?
Now imagine a fairer system. If these companies simply paid their fair share of tax, what could that revenue do for Australia?
Let’s say just $10 billion in additional tax was collected from fossil fuel companies each year – a conservative figure based on actual income levels. Here’s what we could fund:
• Universal early childhood education
• Major renewable energy infrastructure projects
• Regional hospital upgrades and healthcare access
• Expanded mental health services
• Public transport improvements in growing suburbs
• Skills training programs for workers transitioning out of fossil fuel sectors
That money could transform lives, boost our economy, and help us build a cleaner, more resilient nation. And it’s money we should be getting from the companies profiting off our land.
Level the Playing Field
Everyday Australians don’t get the luxury of creative accounting.
We pay GST, income tax, payroll tax.
We don’t get massive fuel rebates or billion-dollar deductions. Why should fossil fuel giants be any different?
It’s time for genuine tax reform that ensures those who profit from Australia’s resources contribute fairly.
That can mean:
- Closing loopholes in the PRRT and tightening corporate tax laws.
- Ending taxpayer subsidies for fossil fuel exploration and fuel use.
- Mandating transparency so Australians can see exactly who pays what.
- Creating a sovereign wealth fund from resource royalties to benefit future generations.
- Increasing the accounting skills and knowledge in the Australian government to compete and ‘outwit’ the fossil fuel companies
The Future Is Calling
Australia has a once-in-a-generation opportunity. We can keep bending to the will of fossil fuel companies, or we can reclaim control of our natural wealth and invest it where it matters: in our people, our climate, and our future.
Taxing fossil fuel companies fairly isn’t radical – it’s responsible.
The disproportionate tax contributions of fossil fuel companies have sparked public debate, concern and outrage.
The reliance on subsidies by fossil fuel industries raises questions about the allocation of public funds, especially in the context of climate change and the global shift towards renewable energy sources.
Changing our Tax System
There is a pressing need for tax reform in Australia’s fossil fuel sector. Ensuring that these companies contribute a fair share of taxes relative to their profits is crucial for economic equity and funding public services.
Reevaluating and eliminating subsidies and tax breaks for fossil fuel companies can redirect resources towards sustainable energy initiatives, aligning with global efforts to combat climate change.
Let’s Change the Status Quo
This is a ridiculous situation by successive governments being weak on this issue and allowing themselves to be bullied into keeping the status quo. The status quo on taxing fossil fuel companies is not good enough and it needs to change.
This is our Australia, our land, our resources and we are essentially giving it away. It’s time we got our fair share back and for fossil fuel companies to pay their share of tax.
Our country needs it.
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