Industry minister not buying gas industry's tax defence

Ed Husic's comments were directed at a defence of existing tax settings launched by the key oil and gas body that argues the sector is already paying a substantial tax bill.

Oil and gas companies are expected to deliver $16 billion to state and federal coffers, according to Australian Petroleum Production and Exploration Association forecasts, up from $6.46 billion in the last financial year.

Association chief executive Samantha McCulloch said compounding regulatory interventions, including the possibility of lifting or altering the petroleum resource rent tax, risk future investment, energy security and future revenue.

"It has been challenging. Over recent times, we've seen concerns raised by international investors and international trading partners around the policy instability in Australia," she told reporters in Canberra.

"We have had a considerable number of interventions and reforms across the gas market in recent months. That is making it challenging for what are really capital intensive, substantial investments that are required to bring on new gas supply."

Ms McCulloch pointed to Japanese businesses that have voiced concerns about Australia's investment environment.

"We need to remember that some of our key trading partners are not only investors in the oil and gas industry in Australia, but they're also relying on the supply of essential energy to keep the lights on in Tokyo," she said.

While Mr Husic confirmed no decision had been made on the petroleum resource rent tax, he said the gas industry was "doing very well" and he was not convinced tighter tax measures would discourage investment.

"It is a bit rich for a lot of these firms to say, 'well, if you make any move here, regulatory uncertainty will force us not to invest' at a time where gas prices are where they're at," he told ABC radio.

"I'll leave that to your good listeners to make their mind up as to whether or not that's believable."

Treasurer Jim Chalmers has kept reforms to the resources tax on the table as a possible budget repair measure.

He is reviewing advice from Treasury on the tax on the profits of fossil fuel extractors, which is applied after companies have recouped their investment from the cost of exploring and developing projects.

Ms McCulloch said the tax was delivering growing returns to taxpayers alongside other payments the industry makes in royalties, corporate income tax and other fees.

"But it's important to remember direct payments are only one part of the industry's broad economic contribution - enabling almost $500 billion economic activity annually, supporting 80,000 jobs, providing essential energy to millions of homes and businesses, including major sectors like manufacturing and transport, and facilitating economic growth," she said.

Australian Associated Press