Originally published by Tom Rabe and John Kehoe of Financial Review
21.04.2026
West Australian Premier Roger Cook says he has directly warned Prime Minister Anthony Albanese against imposing a new tax on gas exports, as energy giant Woodside warned a future 25 per cent levy would kill its $30 billion Browse project.
Albanese has ruled out any new levies on existing gas export contracts but has left open increasing taxes on future contracted and uncontracted gas in the May 12 budget, prompting fierce opposition from the energy sector.
The WA premier’s warning came as former Treasury secretary Ken Henry told a Senate committee investigating the taxation of gas on Tuesday to increase the tax on exports to benefit current and future generations from the commercialisation of the nation’s fossil fuels.
“Just do it and stop the crap that the Australian public has put up with for decades now, in respect of the taxation of Australia’s finite natural resources,” Henry said.
“Tens of billions of dollars can be used to build a fund for the benefit of future generations … or used to pay down a trillion dollars of public debt.”
New economic modelling by ethical investor Future Group released on Tuesday revealed a 25 per cent tax on gas exports would raise about $17 billion for the federal government.
Cook said he understood why seeking to extract more money from the gas sector had “superficial appeal” to voters but warned it would discourage future investment in the multibillion-dollar industry.
“I don’t support it … I don’t think it’d be good for Western Australia, and I’ve made those views clear to the prime minister,” Cook told reporters on Tuesday.
“I understand that that sort of conversation has superficial appeal … if we are going to continue to attract the investment that we need for these projects which deliver prosperity, literally over decades, you have to make sure you provide a stable environment for these companies to be able to make those investment decisions.”
Woodside said a 25 per cent tax would effectively torpedo its flagship Browse gas project off the West Australian coast, which aims to tap the country’s largest conventional gas resource.
“The mooted 25 per cent revenue-based royalty would render the proposed Browse-to-North West Shelf development uneconomic,” a Woodside spokeswoman said.
“The premier’s view is aligned with Woodside’s. In our view, Australia’s current regime of taxes … is delivering a fair return to the Australian people, while ensuring Australia remains competitive to attract global investment.”
Cook’s warning is the latest intervention by WA Labor into federal matters that have an impact on the resources sector, which delivers billions of dollars in royalties to the state’s coffers.
The Cook government campaigned fiercely against the Albanese government’s first attempt at reforming federal environmental laws after mining companies warned they would jeopardise future projects.
Cook also encouraged the federal government to approve the extension of Woodside’s controversial North-West Shelf facility in the state’s Pilbara, which underpinned the company’s future multibillion-dollar offshore Browse gas project.
The premier’s warning came as he stood with federal Environment Minister Murray Watt, who would not say whether the government intended to tap the energy sector for additional revenue in the May budget.
“Our policies about gas taxes haven’t changed. There’s a federal budget coming down in two or three weeks’ time. Every single day we see speculation about different things that we might or might not do in the budget,” Watt said on Tuesday.
The Australian Financial Review reported last week the federal government was divided over whether to levy an additional tax on gas companies as it searches for extra revenue.
Proponents of the tax, including left-leaning think tank the Australia Institute, argue Australians deserve a bigger share of the profits from the oil and gas sector. A 25 per cent export tax would generate enough cash to fund free childcare and university, the institute’s modelling suggested.
Meanwhile, the Future Group’s economic modelling was presented to a Senate inquiry on Tuesday and estimated the federal government could raise about $17 billion a year from the tax.
“An export levy makes it more attractive to sell gas to Australians. This policy will reduce the wholesale price of electricity by up to 15 per cent,” Future Group chief executive Simon Sheikh said.
If Labor chose to impose a prospective levy on gas exports to uncontracted gas only, the government could raise $3 billion per year.
Independent senator David Pocock and MPs from One Nation, the Greens and some Liberals have voiced varying degrees of support for an increase in the tax on energy companies accessing Australian oil and gas.
Albanese’s assurances against a gas tax on existing contracts came during a trip to Malaysia aimed at securing more fuel for Australia amid the global shortage due to the Iran war and the blockade of the Strait of Hormuz.
Malaysia relies on Australia for almost all of its LNG imports, while it provides Australia with 14 per cent of its diesel, 10 per cent of its petrol and 11 per cent of its jet fuel.
Recent analysis by global consultancy Wood Mackenzie, commissioned by Australian Energy Producers, said a 25 per cent tax on Australia’s oil and gas industry would jeopardise $70 billion in government revenue and increase the risk of local energy shortfalls.