Australian Experts Propose “Polluter Pays” Tax with Subsidies

A new report from the think tank The Superpower Institute proposed that Australia impose a “polluter pays” levy on companies that extract or import fossil fuels and increase profit taxes on domestic gas producers. These measures are expected to generate an average of 35.6 billion AUD per year for the government between 2026 and 2050.

The plan aims to encourage emission reductions, improve federal budget outcomes, and ensure companies with the highest greenhouse gas emissions pay a fairer share of costs. The report also suggests taxing the extraction and import of coal, gas, and oil consumed in Australia, and raising domestic gas producers’ profit tax rate from around 30% to nearly 60%, similar to levels in major energy-exporting countries like Norway. Initial tax revenue is expected to be below 20 billion AUD, rising above 40 billion AUD after 2030.

Subsidies will be prioritized over the next decade to help households transition from gas, petrol, and diesel to clean electricity, with small businesses also receiving compensation. Polls cited in the report show about 68% of Australians support taxing major emitters. Former Treasury Secretary Ken Henry also expressed support, calling it an opportunity to implement major reforms in the current political environment.