On this episode of What’s the Point?, Richard Denniss discusses how global gas industry has pulled off the greatest con in Australia’s history, and why Australians are living with the consequences. He spells out the simple steps we need to take to fix it.

This episode was recorded on Friday 10 July.

Host: Richard Denniss, co-Chief Executive Officer, the Australia Institute // @richarddenniss

Host: Anna Chang, Managing Editor, The Point // @annachang

Show notes:

Plebiscite petition: https://gas-plebiscite.australiainstitute.org.au/

More Fool Me (Vantage Point Issue 6) pre-order: https://australiainstitute.org.au/store/more-fool-me-vantage-point-issue-6

Climate Integrity Summit 2026 tickets: https://events.humanitix.com/sydney-climate-integrity-summit-2026?c=website

The Point: https://thepoint.com.au/

We’d love to hear your feedback on this series, so send in your questions, comments or suggestions for future episodes to podcasts@australiainstitute.org.au. Subscribe to What’s the Point? with Richard Denniss on YouTube, Apple Podcasts, Spotify or wherever you get your favourite podcasts.

Transcript:

Richard Denniss:

What’s the Point is made on the lands of the Ngunnawal and Ngambri peoples. We pay our respects to Elders past, present and future and acknowledge that sovereignty was never ceded.

Hi, and welcome to What’s The Point? I’m Richard Denniss.

Every week on this show I’m going to take a look at the political and economic conversations and decisions that are shaping the lives of everyday Australians and answer key questions along the way.

This week, we’re talking about a gas export tax. Right now, Australian beer drinkers pay more tax than gas companies pay in petroleum resource rent tax.

Gas export companies are reaping billions from Australian resources by paying little, or sometimes no tax at all.

Our research has shown that a 25 per cent tax on our gas exports could solve the gas crisis and raise $17 billion every year at the same time. It’s popular with One Nation and Green voters. It’s popular with most people.

So why isn’t it happening? Let’s get into it.

I’ve got the editor of The Point, Anna Chang, here with me.

Anna, what’s the first question? Fire away.

Anna Chang:

Great. Thanks Richard.

So the first question today is: the gas industry love to talk about how they’re such a big industry in Australia.

Is it actually a big industry?

Richard Denniss:

It depends how you measure big.

When it comes to the amount of revenue the gas export industry makes, it is big. The amount of revenue they get from selling our gas is enormous.

Tens of billions of dollars a year is how much the gas export industry receives from selling our gas. So that’s big if we’re measuring the company by the amount of revenue that the company gets.

But if we look at how many people the gas industry employs, it’s tiny.

Less than half a percent of Australians work in the gas industry. McDonald’s employs far more people than the entire gas industry. So in terms of an employer, it’s tiny.

And in terms of the amount of tax it pays, well, it’s still a really small industry. So let’s be clear, they sell our gas for a lot of money. They make a lot of revenue, but it’s nearly all profit.
The amount of tax that we get from it is tiny. So nurses and teachers pay more income tax, for example, than all of the tax paid by the gas export industry. So it’s big when we look at how much money they make.

It’s big when we look at the profits they make. But those profits go to their foreign shareholders because the gas industry is overwhelmingly foreign owned. So there’s a lot of revenue, that’s big.

They make a lot of profit because we give them the gas for free in most cases, and then they sell it for a high price. So big on revenue, big on profit for them, tiny as an employer, absolutely tiny – more than 99.5 percent of Australians don’t work in the gas industry and actually quite small when it comes to the amount of tax they pay.

So is it big or is it small? Well, you know, is a hammer bigger than a balloon? Well, they’re different shapes. How do you decide whether a hammer is bigger than a balloon?

In volume terms, balloons are big. In weight terms, hammers are very heavy. The gas industry gets a lot of revenue, but like a balloon, there’s not much inside there for us.

Anna Chang: 

What’s the point of having a gas industry that’s big on revenue, but isn’t a big employer, doesn’t pay much tax, doesn’t pay much in royalties, and the profits go off short, Richard?

Richard Denniss:

Well, if you owned Chevron, you’d be really happy with it. If you owned Inpex, you’d be really happy with it. So what’s the point of the gas industry?

Its point is to make enormous amounts of profit for its shareholders, the overwhelming proportion of whom aren’t Australian. And that’s the point. That’s the question here.

To what end do we want to expand the gas industry, so that foreign shareholders can make more money?  Or so that Australians could receive far more revenue from the sale of that gas? That’s why a gas export tax is so important, because it’s the way that we can turn lots of revenue for the gas industry instead into lots of revenue for Australians.

So, yeah, it’s tiny, it’s wonderfully profitable. The CEOs getting paid millions are happy, the lobbyists getting paid millions are happy, the shareholders getting paid millions are happy, but 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.

So, it’s obvious what the point is for the gas companies. The harder question is what’s the point of the gas industry? What’s the point of increasing gas exports for the Australian government and in turn for Australian people? And at the moment, it’s pointless. Let’s be clear, because all of that profits going to foreign shareholders, almost none of that revenue is actually flowing to Australians.

Now, a lot of Australians think that the gas industry is a big employer. It’s not. For a while, they thought all the gas was necessary for our homes and our factories, now they know it’s not because everyone’s figured out we’re exporting it all. But a lot of people continued to believe, oh, they must be paying lots of tax. That must be why the government’s so defensive of them.

But according to the Australian Taxation Office, according to the Australian Bureau of Statistics, indeed, according to the annual reports of companies like Shell, these gas companies are paying very little tax as a proportion of the enormous amount of revenue they’re making, and they’re often literally getting the gas for free. 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.

But in Australia, our governments, Labor and Liberal, state and federal, have been really generous in giving our gas away to these foreign companies. And what’s the point of that? Well, I don’t think there is a point.

That’s why I think we should fix it.

Anna Chang:

I’ve noticed that when you talk about the gas tax, or when The Australia Institute talks about the gas tax, you talk a lot about giving gas away for free.

But when the gas industry talk about how much they pay, they always talk about how much royalties and tax they pay.

So can you just explain the difference between royalties and tax?

Richard Denniss:

Yeah, great question.

So a royalty is a price that someone pays for a resource, whether it’s gas or gold or iron ore or lead, whatever. A resource from under the ground, when it’s dug up from under the ground, in Australia, all those resources are owned by the crown. They’re owned by the government.

So when a mining company digs up our resources, they usually pay us a royalty, a fee, an amount per ton, for example, for everything they dig up. And to be clear, the iron ore industry pays royalties, the gold industry pays royalties, and the gas industry does pay some royalties.

When gas is extracted from under the land in Australia, if it’s in Queensland, for example, they pay a royalty to the Queensland government. If some gas gets pulled out of the ground from under New South Wales, a royalty is paid to the New South Wales government.

What’s broken about our gas industry, what’s broken around our tax system, is that when gas is sucked out of the ground in Commonwealth waters, so the waters around Australia are owned by the Commonwealth, not by a state like Queensland or New South Wales, most of the gas that we export is coming out of Commonwealth waters and the Commonwealth government has no royalties in place, none, zero.

So, unfortunately for Australians, huge amounts of the gas we export comes up from under the ocean in Commonwealth waters with no royalties paid. So that part of the export gas industry is getting free gas. Now, when they sell their free gas at the world price, they make a giant profit on it.

And it’s absolutely true that they have to pay some company tax on that profit, but if builders didn’t have to pay for bricks, they’d make a big profit. If bakers didn’t have to pay for flour, they’d make a big profit.

The gas industry are like: “Look at me doing you a favor, paying some company tax on the enormous profit I made because you gave me all of my raw materials for free”.

So the gas industry love to combine royalty payments and company tax payments. I mean, sometimes they even include GST paid by their staff.

You name it, the gas industry have tried every trick to say, look how much tax we pay. But the short answer is because we give so much of our gas away for free to them, we don’t get nearly as much money as Norway or Qatar or Saudi Arabia get. So the gas industry are good at lumping all these taxes together and saying, it’s not true that we pay no tax.

To be clear, some of the gas companies pay some tax some of the time, but we’re giving away literally for free more than half of the gas we export. That’s why a gas export tax is so important.

And of course, the current system in Australia is so ridiculous that countries like Japan, that literally have no gas of their own, are making more tax revenue out of importing gas than the Australian government is making on the exports of our gas.

That’s how cooked this whole system is.

Anna Chang:

On basically any social media post the Prime Minister makes, whether it’s the Socceroos or Delta Goodrum at Eurovision, if you look at the comments, it’s basically a wall of people saying tax the gas.

Why do you think that is, Richard?

Richard Denniss:

I think it’s because an overwhelming majority of Australians want to get a fair return for the gas that we give away at the moment to these foreign gas companies.

Look, I’ve been talking about policy issues and tax for decades. It’s safe to say, usually people don’t want to talk to me about 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. So I’m not at all surprised that wherever the Prime Minister goes and whatever he tries to talk about, that ordinary Australians are like, great, yes, I like Delta Goodrum too, why don’t you tax gas? That’s a nice dog that you were photographed with there on Instagram, Prime Minister. I like dogs too, now tax gas.

I think this just reflects a really important sentiment in Australia today. They want a health system that works, they want an education system that works, they’re increasingly wondering why in Norway kids get higher education for free and we’re paying $50,000 for an arts degree.

A whole bunch of people have got a whole bunch of problems that are unrelated to the gas industry and unrelated to climate change and unrelated to tax policy. But a whole lot of Australians have figured out, hang on, these are not unrelated things. The countries that can afford to have nice things, the countries that are giving kids free education, that have no co-payments when you go to the doctor, these are countries that get a fair share for their natural resources.

So I feel some sympathy for the Prime Minister. He’s afraid of having a fight with the gas industry. He really wants to say nice things about the Socceroos.

He’d like people to focus on the changes his government has made. Good changes, like the capital gains tax changes. But a whole bunch of people are like, great, now do better.

Great, now do this other thing. That’s democracy. I think it’s working.

I don’t think it’s just the Prime Minister. The Treasury gets asked about it in interview after interview. Backbenchers are getting asked about it all the time.

Again, to be clear, this is how democracy is supposed to work. This government has to be more afraid of angry voters than they are afraid of angry gas shareholders. It is as simple as that.

Nothing I’ve said about how small the gas industry is news to the government. Nothing I’ve said about how the royalty system works and the PRRT collects no revenue is news to anyone in the government.

I know it. They know it. Every economist knows it. What is uncertain is, is the government more afraid of voters than it is of the gas industry? Historically, they’ve been far more afraid of the gas industry.

So all of these people saying, yeah, I love the Socceroos, now tax gas, that’s really democratically important. That is a regular reminder to the Prime Minister, everyone in his office and everyone else around the government that this issue isn’t going away and it’s getting harder and harder for this government or indeed any politician to say: “We can’t afford to spend more on the NDIS, we can’t afford to spend more on hospitals because we don’t have enough money”.

No one’s falling for that anymore because everyone’s like: “Yeah, you do, you can afford to give the gas away for free”.

So yeah, the kind of momentum behind this on social media, I think is really interesting. I’ve never seen it before in my life.

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 the Americans.

We’ve got some big choices to make as a country, and if we want to have the world-class services, then we’re going to need a world-class tax system.

Anna Chang:

So Richard, we’ve got time for one more question.

You’ve written about gas in your latest Vantage Point essay. The essay is called More Fool Me, How the Gas Industry Tricked Australia.

Can you give listeners a preview of what the essay is about?

Richard Denniss:

I’d love to.

So I’ve written this essay about the question I get asked the most. Why? Why would Australia give so much of its gas away for free?

For years, I’ve been talking about the fact that we give gas away for free. For years, I’ve been talking about how we could do better and I think people get that now. They can see that Qatar can do it, Norway can do it. So now a lot of people want to know why.

Why would Australia do this? It makes no sense. So in More Fool Me, what I try to do is explain the why and my conclusion is that unfortunately, Australian policymakers in the last 40, 50 years, this is how long this has been going on, have been conned.

They’ve been tricked.

They’ve been outsmarted by really well-paid, really smart people in the foreign-owned gas export industry.

Our politicians and our senior public servants in the 70s, and 80s, and 90s fell for this magic pudding. They fell for it. They all believe that if we gave the gas away for free, that one day they’d pay a lot of tax and we’d all be rich.

And unfortunately, when people have been conned, they don’t like to admit that they’ve been conned to themselves, or indeed to anyone else. So, in the essay, I used the idea of how con artists do their trick, and the original con artist, the term confidence artist or confidence trick, come from a guy who in New York in the 1800s would walk up to people on the street, walk up to particularly wealthy looking men in particular and look them in the eye and say, are you confident enough in your ability to judge people’s character? Are you confident enough that if you give me your watch right now, I will come back here tomorrow and return it to you?

And a bunch of rich men were so confident in their own ability to judge the integrity of other people that they would hand over their watch to this guy whose, spoiler alert, never came back with the watch. So was a crime committed? Did this guy rob them of their watch or did these people give their watch away?

Did these rich men go straight off to the police and say, “I’m an idiot. I got suckered. I fell for a con”?. Often not.

Now what’s that got to do with gas? Well, some really overconfident, overwhelmingly men, very well-paid in Australia in the 70s, and 80s, and 90s, 2000s, it’s still going on today, were conned.

They were conned by the gas industry into saying, if you give me your gas for free, I will one day pay you a lot of tax, and guess what? Spoiler alert, it didn’t happen.

So in the essay, I spell out the economics of this gas grift, but really the point of the essay is to explain to people: Here’s how the con works, and here’s why 30 years later, we can’t even admit it.

And when I say we, I don’t mean the people listening to this, I mean the politicians past and present, the public servants past and present who were a part of this con. Who were a part of getting tricked.

They don’t want to admit how bad they did it. So we’re stuck with this bad system to protect their embarrassment.

Anna Chang: 

Great. Thanks, Richard. So that essay is available for pre-order now on the Australia Institute website.

We’ll put a link in the show notes for you.

So Richard, what’s the take-home message of this podcast episode?

Richard Denniss:

The take-home message is really quite simple: Australia is one of the richest countries in the world. We’re one of the biggest exporters of gas in the world, and we’ve been conned for decades.

For decades, we were told lots of people owed their jobs to gas. It wasn’t true.

For decades, we were told we had a shortage of gas while we were exporting enormous amounts of it, it wasn’t true.

And for decades, we were told the gas industry either paid lots of tax or was about to pay lots of tax, and guess what? That’s not true either.

But the good news is this is easy to fix, and a simple 25 percent gas export tax would raise around $17 billion a year that we could spend on whatever we want. Better health, better education, better NDIS, better public transport, lower income tax if you want, that’s a democratic fight.

But when we give the gas away for free, we never get the chance to sell it again. We only get to export our gas once.

So every week that we put it off, we’re giving up $350 million. Every year that we put off fixing this system, we’re giving away $17 billion.

So it’s not too late. The sooner we do it, the sooner we get $350 million a week and that’s why at the moment, the Australia Institute is calling for a plebiscite.

If our politicians won’t act decisively and in a hurry, we’re saying, well, let’s have a plebiscite. Let’s just ask the people, do you want to have a gas export tax or not? We think the Australian public will overwhelmingly vote for that.

But again, if the political class can’t handle picking a fight with the gas industry, let’s ask the Australian people whether they want a fairer share for their gas.

And of course, if you want to sign that petition, just go to the Australia Institute website or look for a link in the show notes.

Anna Chang:

Excellent. Great. Thank you so much, Richard.

Richard Denniss:

Thanks, Anna. That’s all for this episode of What’s the Point. But for listeners in New South Wales, I along with a number of other great speakers will be coming to Sydney soon for the Climate Integrity Summit.

The summit will bring together global political leaders, economists, advocates, artists, musicians, all for a day of big ideas and bold conversations about climate change and what we need to do to fix it. Tickets are available on our website: australiainstitute.org.au.

Make sure you subscribe wherever you get your podcasts, and for more analysis from experts at the Australia Institute and beyond, head to thepoint.com.au and sign up for the newsletter. If you’ve got a question you’d like us to tackle, let us know. You can reach us on Facebook and Instagram.

I’ll be back on Monday next week. Until then, I’m Richard Denniss, and thanks for joining me.