Independent MP Allegra Spender has called on the federal government to impose a windfall tax on energy companies benefiting from rising global prices following renewed tensions involving Iran.
Spender said Australia should introduce a temporary tax of at least 50 per cent on what she described as “supernormal” profits earned by major oil and gas exporters during wartime price spikes.
Her proposal comes as global energy markets reacted to the outbreak of hostilities involving Iran over the weekend, pushing oil and gas prices higher and raising concerns about renewed inflation pressures in Australia.
Higher global energy prices typically translate into increased petrol costs and broader cost-of-living pressures for households, while at the same time boosting profits for major exporters of oil and liquefied natural gas.
“The supernormal profits made by a few companies during this time is not a reward for effort or ingenuity, or a driver of investment,” Spender said.
“It is the windfall from war.”
The independent member for Wentworth said the tax would apply only to the additional profits generated by war-driven price increases rather than the companies’ normal earnings.
“I’m proposing an immediate tax of at least 50% which would only apply to the extra, supernormal revenue that companies receive because of the war-driven price spikes,” she said.
Spender suggested the revenue from the one-off tax could be directed toward reducing Australia’s public debt.
The proposal echoes broader debates in several countries about windfall taxes on energy companies following sudden increases in global commodity prices linked to geopolitical crises.
Spender pointed to the experience of the Ukraine war, when surging energy prices produced dramatic profit gains for major exporters.
“Woodside’s profit, for example, more than tripled in 2022 following the war in Ukraine,” she said.
Financial markets have already reflected the latest geopolitical tensions. While the broader Australian share market has fallen sharply amid regional volatility, energy producers have moved in the opposite direction.
Over the past five trading days, the benchmark Australian share market has dropped about 2.8 per cent. In contrast, shares in major oil and gas companies have risen, with Santos climbing about 6.1 per cent and Woodside up roughly 7.2 per cent over the same period.
The Albanese government has not indicated it is considering a new windfall tax, although debates over the taxation of the energy sector have intensified in recent years amid record profits and rising household energy costs.
Previous policy discussions have included proposals to tighten resource taxation or increase returns to the public from Australia’s natural resources.
Spender’s proposal is likely to face strong opposition from energy industry groups, which argue that higher taxes risk discouraging investment in large-scale projects and could undermine Australia’s position as one of the world’s largest exporters of liquefied natural gas.
The debate comes as policymakers grapple with balancing government revenue, energy security and cost-of-living pressures during periods of geopolitical instability in global energy markets.
