How Australia Became The Resource-Rich Country That Acts Poor

Here’s something I can’t get my head around. Australia is one of the largest gas exporters in the world. We let huge foreign companies pump it up, liquefy it, ship it offshore, and sell at enormous profit into global markets. But somehow, as a country, we act like we’re poor.

That’s not rhetoric. That’s the numbers. The tax we collect from this industry is tiny. Aussies pay more more in beer excise each year than the gas industry pays in royalty taxes. And students’ university fees contribute more to the federal budget than the gas industry does. That should stop us in our tracks. It says everything you need to know about how upside down the system has become.

Because Aussie gas under the ground isn’t owned by multinational companies. It belongs to us. It’s a public resource. And when it’s extracted and sold, the punters should be getting a fair return. But we’re not.

And now even the people who designed the system are saying so. Former Treasury Secretary Ken Henry turned up at Parliament House this week to say we should be taxing gas more. And renowned economist Ross Garnaut made a similar call. Despite all of this, Anthony Albanese is sitting stubbornly on his hands - resisting meaningful reform even as the evidence piles up and the calls for change grow louder.

So what’s going on? Part of the answer is structural. The Petroleum Resource Rent Tax sounds sensible on paper. Tax profits, not production. Let companies recover their costs before paying tax. Encourage investment. Fine.

But in practice, it’s been gamed by the mining industry. Creative accounting and complex corporate structures blur where the money is really made and allow the industry to engage in massive tax avoidance. The result is an industry exporting tens of billions of dollars’ worth of gas while paying very little tax for years on end.

That’s not a glitch. That’s the system working exactly as it has been designed and allowed to. And that’s why the deeper question isn’t economic. It’s political. Because governments have known about this for years.

The real reason nothing changes goes back to 2010. When the Rudd Government tried to tax mining profits properly, the industry didn’t just lobby. It went to war. Advertising blitzes. Political pressure. Leadership destabilisation. The LNP ganged up with them, and they won. Every government since then has absorbed the lesson. Don’t take on the resource sector.

So instead of structural reform, we get tweaks. Adjustments. Reviews. Language about “balancing investment certainty” with “community expectations”. Meanwhile, the underlying problem rolls on.

There’s another layer too. It’s linked to Australia’s fossil fuel diplomacy. A lot of this gas is exported under long-term contracts to countries like Japan and Korea. So public servants and people influencing our government argue that changing the rules will make Australia unreliable. That it will spook investors. That it will create sovereign risk.

But here’s the thing: super rich countries like Norway and Qatar export gas too. Norway has turned its resources into a trillion-dollar sovereign wealth fund. Qatar has built one of the richest economies on Earth off the back of gas. And here’s the kicker - Australia exports more LNG than Qatar, yet captures only a fraction of the value. They tax the resources heavily. They capture the wealth. They invest it for future generations. They haven’t scared off investment.

Which brings us to the uncomfortable truth. Australia isn’t failing to tax gas because it’s too hard. We’re failing because we’ve chosen not to. We’ve chosen to prioritise politics and laziness over economic fairness and prosperity. We’ve chosen to accept industry arguments about jobs and investment at face value. We’ve chosen to let largely foreign-owned companies extract public resources and return none of the value. And we’ve normalised it. Anthony Albanese even used the gas industry’s own talking points this week to justify his inaction.

That’s the part I struggle with most. Not the economics. The acceptance. Because if this were any other policy area, we’d fix it ASAP. If Coles or Woolies were taking billions out of the community and paying almost nothing back, we’d be outraged. If a foreign company was making a mint from the Sydney Opera House, Uluṟu of the Great Barrier Reef and giving nothing back, we’d demand change. But with gas, we shrug. Or worse, we defend it.

And that’s where this starts to feel a lot like AUKUS. Big numbers. Big strategic narratives. Very little scrutiny of whether the public is actually getting a fair deal. In both cases, we’re told it’s about the national interest. But whose national interest, exactly? Because right now, it doesn’t look like it’s the Australian public.

Fixing this isn’t radical. It’s standard practice. It’s the things people like Senator David Pocock are calling for. A stronger resource tax. A modest export levy. Closing the loopholes that allow profits to be deferred indefinitely. Greater transparency about what’s being sold and what’s being paid.

None of this would make Australia uninvestable. It would just make it fairer. And that’s really the point. We’re a wealthy country sitting on valuable resources. Acting like we’re not is a choice. The question is how much longer we keep making it.