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Few political talking points have hit the proverbial pub test harder than this one: Australia collects more tax from beer drinkers than it does from gas exporters. It’s not incorrect, but the truth is a little more complicated than that. Australia collects AUD $2.7b annually in alcohol excise, vs just $1.5b from the Petroleum Resource Rent Tax (PRRT).
Those are the kinds of numbers that will make you put down your $16 pint for a second. And for Independent Senator David Pocock, it was enough to ask the question during Senate estimates back in February.
“How do we live in a country, one of the biggest gas exporters in the world, and we’re getting more tax from beer than PRRT?”
What started as a viral Senate moment has now become a real pre-budget fight, with pressure mounting on the Albanese government to rethink how the country taxes its gas wealth.
And yes, figure to figure, beer raises more money for the federal budget than PRRT. But it’s a little more complicated than pints versus gas (and just to be clear, when we say ‘gas’, we’re talking about Liquid Natural Gas, aka LNG).
What is the Petroleum Resource Rent Tax?
The PRRT is a tax on profits from certain oil and gas projects. Beer excise is much simpler. It gets calculated simply when beer is produced or sold.
PRRT only starts flowing once projects are profitable after costs, deductions and past losses are worked through. That includes the massive costs of building the rigs and processing plants in the first place, which means the money coming in can be lower, delayed or bounce around depending on the project and the market.
In plain English, the beer tax is a regular tap. PRRT revenue only shows up when there’s money left on the table after the producers’ costs are accounted for.
Does Japan Really Raise More Money From Australian Gas Than We Do?
That depends on who you ask and which spreadsheet they bring. Critics point out Australia is one of the world’s biggest LNG exporters, yet PRRT is tipped to raise just $1.5 billion. Given the size of exports and the run of strong global gas prices in recent years, they reckon it’s a bit short.
That frustration was on full display this week when Punter’s Politics founder Konrad Benjamin fronted the Select Committee on the Taxation of Gas Resources.
“We’ve been sold out,” Benjamin told the hearing. He said millions of regular Australians were now paying attention to a system long overlooked as too technical to question.
“We understand that Australia’s gas is incredibly valuable,” he said. “We understand that we’re giving most of it away, for free, to foreign corporations. We understand that those same corporations pay bugger-all tax.”
Benjamin also pointed to Norway, where oil wealth helped build a sovereign wealth fund worth trillions, asking why Australians seem to own the resources but miss out on so much of the upside.
Perhaps the most eye-catching wrinkle in the debate is this: critics say Japan may collect more tax from importing Australian gas than Australia raises through PRRT. While we struggle to squeeze $1.5 billion out of the PRRT, Japan’s energy import taxes rake in an estimated $1.8 billion annually from the very same resource.
Whether that estimate stacks up in every detail, it helps explain why the issue has caught fire politically.
The Great Aussie Tax-Off: Beer vs. Gas (FY25 Estimates)
| The Contender | Annual Revenue (AUD) | The “Vibe” |
| Beer Excise | $2.7 Billion | A reliable “tap” that flows every time you buy a schooner. |
| Gas Tax (PRRT) | $1.5 Billion | Only kicks in after the big rigs pay off their multi-billion-dollar debt. |
| Japan’s Import Tax | $1.8 Billion | Japan makes ~$300m more taxing our gas than we do exporting it. |
| The “Fair Share” Goal | $17 Billion | What a 25% flat export levy would allegedly rake in annually. |
| The Total Pie | $21.9 Billion | Total sector taxes (including company tax & state royalties). |
Industry groups, however, are quick to point out that PRRT is only one slice of the pie. They claim the sector contributed $21.9 billion in taxes and royalties in 2024–25 once company tax, state royalties and other charges are counted.
With the Albanese government reportedly weighing its options ahead of the May budget, the debate has moved well beyond social media clips. One proposal now in the mix is a flat 25% tax on gas exports, which the Australia Institute claims could raise $17 billion a year.
Why a Bigger Gas Tax Isn’t So Simple
It’s easy to frame this as free money sitting on the table. Tax gas more, collect billions, spend that money on government services, everyone wins. In reality, it’s a messy balancing act.
Australia is competing for investment with producers like Qatar and the United States. If the tax settings become too heavy-handed, some future projects may simply be built elsewhere.
Meanwhile, while Australia exports a hell of a lot of gas to other countries, we also import a lot of petrol and diesel from countries like Japan and Korea. In a world where those resources are growing harder to come by, you don’t necessarily want Australia to be putting some of its closest trading partners offside with unexpected taxes.
There’s also a timing angle. Gas prices have had a strong run, but over the longer term, renewables, battery storage and electrification are expected to eat into fossil fuel demand. The next wave of projects may not enjoy the same boom conditions as the last one.
Some economists would say that if a project only works when it barely pays tax, maybe it wasn’t a great project to begin with. Which is why this isn’t as simple as “tax it more” or “leave it alone”. The real trick is getting a better return for Australians without sending the business elsewhere.
Why the Beer Comparison Took Off
Because it turns a technical tax debate into something anyone can understand in five seconds. Most Australians don’t spend their time reading tax settings or resource policy. But they do understand the idea that a country rich in natural resources should probably be earning more from them.
That’s why the beer line has travelled. Whether beer raises more tax than gas is almost beside the point. The real question is: Is Australia getting a fair return for exporting resources that belong to the country?
That’s the argument underneath all of this, and it’s not going away anytime soon.
Right now, the beer comparison is doing something tax policy rarely manages on its own: making ordinary people care where the money goes.
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