Two separate events on Monday—one in rain-soaked Canberra, the other in sunny Gladstone—explain why the Australian federal government will not pursue a new gas export tax in next week's budget, and why it may have no choice but to do so in the future.
Albanese Hosts Japanese Prime Minister
In the nation's capital, Anthony Albanese hosted his Japanese counterpart, Sanae Takaichi, for annual leaders' talks that coincided with the 50th anniversary of a landmark treaty between the two nations. The prime ministers made high-level commitments on economic security, energy trade, defence, and cyber, elevating a friendship that Albanese said had “never been closer.”
Had local journalists been able to question Takaichi—which they were not—she would almost certainly have been asked about the prospect of a new tax on Australian liquefied natural gas (LNG) exports. Takaichi might not have responded explicitly, but the Australian government would be in no doubt that such a measure would face political and corporate resistance in Tokyo.
Japan's Dependence on Australian LNG
Australia supplies Japan with roughly 40% of its LNG, making the east Asian nation hostile to any market intervention that it considers a threat to the stability of those supplies. Gas exporters, including Inpex (whose parent company is partly owned by the Japanese government), have framed the prospect of a 25% export levy as a risk that could undermine Australia's standing as a reliable seller.
Whether that claim holds weight is questionable, but it has proven influential for Albanese, who is clearly not prepared to risk a potential backlash from Tokyo and other Asian energy trading partners at a time when Australia is leaning on them for petrol and diesel shipments during the international oil crisis.
Domestic Pressure Mounts
Meanwhile, Labour Day marches in Gladstone saw independent senator David Pocock front and center. Pocock, a key figure in the campaign for a 25% export tax, was invited to speak by the Labor-aligned Australian Manufacturing Workers' Union (AMWU). “I really believe that we're at a crossroads as a country,” Pocock told the rally, which also featured Greens senator Penny Allman-Payne.
“We're seeing record profits at the same time that so many Australians are struggling to pay rent or mortgages. Why is it not working for us?” he asked.
Albanese might dismiss Pocock and others as “populists,” but he cannot easily attach that label to the AMWU or the Australian Council of Trade Unions (ACTU). “The union movement's long-standing position is that multinationals should pay their fair share of tax, including the biggest gas companies,” said ACTU president Michele O'Neil. “Our current tax system disproportionately benefits professional landlords and multinationals at the expense of working people, and that needs to change.”
Albanese has ruled out a gas export tax for now, but internal pressure will continue, especially ahead of Labor's national conference in Adelaide in July.
