Pauline Hanson to demand Norway-style gas and oil overhaul

Pauline Hanson will unveil a plan to tear up Australia’s offshore gas tax system and replace it with a production royalty and taxpayer equity in LNG projects, in a major interventionist proposal aimed at lifting production and returning profits to the public purse.

The One Nation proposal would scrap the Petroleum Resource Rent Tax (PRRT) and impose a 10 per cent wellhead royalty on all offshore gas and oil production, while also establishing a Commonwealth co-investment scheme that would see the government take ownership stakes in new developments in exchange for funding early exploration.

The plan lands amid a public groundswell of support to increase tax on gas companies, debate over east coast supply constraints and how Australia should balance attracting investment with extracting more public value from its status as one of the world’s biggest LNG exporters.

Hanson will launch the policy with a speech at the Australian Energy Producers conference in Adelaide on Thursday, where she will be given the platform alongside a federal Labor minister and Liberal leader Angus Taylor. It reflects an increased engagement between corporate Australia and One Nation, as the populist party maintains its strong position ahead of the Coalition in the polls and looks to strengthen its negotiating influence in the next term of government by increasing its numbers in the Senate.

Along with One Nation defector Barnaby Joyce, Hanson has consulted widely with industry over her proposal in the past few months, including a virtual meeting with several leading CEOs and industry leaders in early May where they briefed them on their new platform.

Drawing heavily on Norway, where the state combines taxation with equity participation and channels returns into a sovereign wealth fund, Hanson’s policy argues Australia has failed to turn its resources base into long-term national wealth despite decades of LNG exports. It also reflects the “drill baby, drill” pleas from prominent supporter Gina Rinehart, who owns a controlling stake in Queensland gas producer Senex.

Under the proposal, which has been circulated within industry circles and seen by this masthead, the PRRT would be abolished for offshore projects and replaced with a royalty applied at the point of extraction.

One Nation says that would deliver a more predictable revenue stream, avoiding the long lags and complex deductions that have left the existing system reliant on project profitability rather than production. It argues the current regime allows companies to significantly reduce or delay tax liabilities through capital write-offs, uplift rates and carried-forward losses, meaning large LNG projects can generate substantial export revenue long before the Commonwealth sees meaningful returns.

While some industry figures privately dismissed the policy platform as political overreach and unachievable, Hanson’s foray into the policy debate has been welcomed by one senior gas industry source who said: “At least One Nation seems to understand prospectivity.” Prospectivity is an industry term that refers to the probably that a geographic area will yield valuable resources like petroleum.

Hanson flagged the policy after her party’s historic victory in the Farrer byelection, where David Farley claimed the first One Nation lower house seat in 30 years.

“What I want is a system where we will own part of that equity share in the exploration of gas, so we are not just going to allow them to take it,” Hanson said on the night.

Both major parties have strained relationships with the industry despite resisting growing campaigns to raise taxes on gas companies. Prominent social media influencer Konrad Benjamin, a former school teacher whose Punter’s Politics venture has almost 1 million social media followers, warned Labor last month not to underestimate the public outrage about the existing regime.

Alongside the tax overhaul, Hanson proposes a new Commonwealth Offshore Resource Participation Scheme that would see the federal government co-fund exploration drilling and seismic work in exchange for equity stakes in any projects that reach production.

The model would see the Commonwealth take ownership interests in multi-billion-dollar LNG developments, sharing both the upfront risk and long-term returns. Under this approach, the federal government would contribute to exploration and appraisal costs – estimated at about $500 million annually – in return for a proportional share of production revenue and asset value growth if discoveries are commercialised.

The scheme is pitched as a way of converting Australia’s resource base into a long-term financial asset, with returns directed into a sovereign-style fund modelled on Norway’s $2 trillion government pension fund. A leaked version of this proposal was first reported by The Australian last month.

“We keep hearing that the oil and gas giants are making money hand over fist, let’s not shut them down, let’s make money too,” the policy document states.

MST Marquee energy analyst Saul Kavonic said the shift would significantly expand the state’s role in investment decisions in the sector, raising questions about efficiency, risk and whether it would ultimately deter private capital.

“[It] would give government increased control over investment in, and sales of, our oil and gas with less transparency,” he said. “This could and would be used to stop investment in our resources under Labor or Greens influenced governments.”

He said it would see billions in taxpayer dollars wasted on failed exploration.

“Most exploration wells fail,” he said, while adding a 10 per cent royalty on wellhead value sounded substantial, it would likely equate to a lower effective burden than current arrangements.

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