A look into the complex, opaque web of tax, royalties and levies benefiting fossil fuel companies. By Act on Climate collective member, August Wylynko.
A few weeks ago, David Pocock went viral for pointing out that Australia makes more in tax from beer than from gas exports. Ironically, in the same month, Cyclone Narelle hit Woodside and Chevron operations in Western Australia, halting LNG production.
You may have recently seen The Australian Institute, the Greens, David Pocock, Tipping Point, RENEW for All, Rising Tide, Green music and musicians, Greenpeace, Oxfam and Punters Politics all putting pressure on the Government through campaigning for ‘polluters pay’ mechanisms that would help build resilient communities. As primary drivers of the climate crisis, fossil fuel companies are facing growing public pressure over paying relatively little tax and the complete lack of accountability for their impacts.
With the May budget being announced next month, ongoing bushfires and cyclones impacting many Australians, and mounting public pressure, now is the time for Labor to implement a levy on fossil fuel companies to fund disaster preparedness and recovery.
Act on Climate, Energy Justice and Friends of the Earth Australia stand behind these campaigns, advocating for the Government to hold fossil fuel companies accountable.
Our aims
- Higher taxes on fossil fuel companies
- A disaster levy/fund paid for by fossil fuel companies
- The end of fossil fuel subsidies and phasing out of fossil fuels
Ways you can act
Push for higher taxes on gas production and exports!
If you believe that gas production and exports should be taxed more heavily, now is your chance to make a submission (before April 13th) to parliament on the Taxation of Gas Resources. Energy Justice has written a submission guide including ideas for where the tax could be spent, such as a Climate Adaptation and Insurance Fund and First Nations Resource Rent.
*Further explanation below around the current taxation system and possible alternatives that you could talk to in your submission.
Make polluters pay - especially for disasters!
If you don’t believe fossil fuel companies are paying for their share of the impacts of climate change and disasters, and the burden is unfairly falling on Australians, there are several campaigns you can support which are advocating for a Levy to fund disaster preparedness and recovery.
In Victoria, we are advocating for the Emergency Services and Volunteer Fund to be paid for, in part, by fossil fuel companies, which we are asking people to support via this survey.
We are also campaigning for a Victoria Community Climate Adaptation Fund (VCCAF), an ongoing fund used for adaptation, preparedness and resilience projects.
FoE Australia is calling to make polluters pay through taxes on windfall profits and collecting gas royalties to fund disaster response, recovery and community resilience building.
Nationally, there are calls for a Climate Disaster Levy and various Polluters Pay campaigns (outlined below).
Through these campaigns, an estimated $13 - $150 billion per annum could be raised - a significant contribution toward what is needed for disaster preparedness.
The Australian Institute estimates that:
- A 25% tax on gas exports could raise $17 billion a year
- Reducing the $16.3 billion spent on fossil fuel subsidies (including the Fuel Tax Credit Scheme which cost $10.8 billion) would free up significant funding
- A Climate Disaster Levy could raise between $34 billion to $151 billion per annum, depending on the price per tonne of CO2e emissions
- A Fair Share Levy that could raise $13 billion to distribute among Australians.
- A Polluters Levy that could raise $22 billion per year, charged at the point of extraction or import.
For broader context:
- The cost of climate disasters in Australia is estimated at $38 billion per year
- Fossil fuel export earnings were over $111.9 billion in 2023-24
Higher Taxes and Royalties campaigns
Companies pay taxes and royalties to both the federal and state governments. For fossil fuel companies, this includes company tax (30%), the federal PRRT (40%, mainly applicable to offshore projects), and state-based royalties. However, the tax is often reduced through mechanisms such as carrying forward losses. Australian Taxation Office (ATO) data, along with estimates by Market Forces. revealed that several companies pay no corporate tax or no PRRT, and several pay less than expected.
Campaigns to follow and support
- Energy Justice’s gas export tax submission - your submission can include other points such as tax treatment & alternative tax arrangements on oil and gas production and export.
- David Pocock’s call for a reform to the PRRT
- Australian Institute royalties reform campaign
- Rising Tide 78% tax on export profits to fund community and industrial transition and pay for climate damage
- The Greens Tax Gas Export
- RENEW for All Climate Safety Plan calling for a reform to the PRRT and FTCS to find the climate safety initiatives
- Greenpeace: Make Polluters Pay through taxes and fines
- Actionaid: Make Big Polluters Pay
- FoE Australia: make polluters pay: tax and royalties
For more information on what the PRRT is.
The Superpower Institute is also proposing a Fair Share Levy of 40%, increasing the effective tax rate from 30% to 58%, raising approximately $13 billion. This could potentially replace the PRRT and apply to a broader range of companies while delivering direc benefits to Australians.
Levies to fund disaster reduction and recovery
A levy is a tax, fee or fine imposed on a company, which can then be used as a fund. In Victoria, for example, the Municipal and Industrial Waste Levy is used for a Sustainability Fund. We are advocating for a similar mechanism to put the Emergency Services and Volunteers Levy onto fossil fuel companies, this would support communities affected by bushfires and other climate impacts linked to fossil fuel activity.
More broadly, we are advocating for polluters to pay for disaster response, recovery and community resilience building on both a state and federal level. This could be through a Victoria Community Climate Adaptation Fund (VCCAF).
Organisations calling for disaster funding
- Tipping Point: Climate Compensation Fund - call on your council to pass a Polluters Pay motion which demands that coal and gas corporations pay their share for the cost of climate change.
- Australian Institute: Climate Disaster Levy - this would work by charging a $ amount per tonne of exported pollution.
- Superpower Institute: Polluter Pays levy which aims to simplify a patchwork of inefficient schemes.
- FoEA: Polluters pay for the Emergency Services and Volunteers Levy
- Act on Climate: Polluters pay for increased funding for the Disaster Ready Fund and a Victoria Communities Climate Adaptation Fund (VCCAF)
- Energy Justice: Polluters pay to fund a climate adaptation and insurance fund
- Oxfam: Climate Pollution Levy which can go into a Climate Compensation Fund to help support communities with climate disasters.
- 350: Make Big Polluters Pay
Although there are differing approaches proposed by organisations, institutes, and political parties, they are all calling for the same outcome: polluters should pay for the damage they are causing to communities and the environment.
Together we can help prepare communities for now unavoidable climate impacts!
Get in touch if you'd like to get involved or hear more about what we're doing:
- Kimmi Bebendorf: [email protected], or
- Kim Croxford: [email protected]
Remember, you're always welcome to join Act on Climate's weekly meetings. Our organising and action meetings will take place on the alternative fortnight to the Organising Training Workshops.
All weeks include dinner. Register here for an upcoming Tuesday.
Support the Act on Climate collective!
Want to help ensure we can continue doing the vital work of preparing Vic communities for climate impacts? Please help us continue our work preparing communities for locked-in climate impacts by making a once-off donation or signing up for monthly donations and becoming a member of AoC.
Act on Climate is actively bringing together people around Vic preparing their communities, generating impactful adaptation from the grassroots, while pressuring the Vic Gov to adequately fund community-led climate adaptation.
Donations will go towards a 2026 Climate Adaptation Fair and enable us to continue free Community Resilience Mapping and other events.