Australia resource tax overhaul could lift annual public revenue by up to $45 billion

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Highlights

Prosper Australia estimates the country forfeits up to $45 billion annually in public revenue due to insufficiently progressive mining and petroleum tax regimes.
The report identifies a $28 billion yearly gap from mining and $16–18 billion from petroleum sectors, citing Australia’s weaker public-capture ratios compared to Norway and Alaska.
Queensland’s July 2022 coal royalty overhaul demonstrates locally feasible market-linked progressivity, but operators highlight negative impacts amid falling prices and forecast 2025 production cuts.

Report outlines revenue gap across mining and petroleum

As reported by ABC News, Prosper Australia says Australia is missing out on about $45 billion a year in potential public revenue because its tax and royalty settings do not rise strongly enough when commodity prices and company profits surge.

The think tank says the shortfall includes about $28 billion a year from mining activities such as coal, iron ore, gold, copper and lithium, and another $16 billion to $18 billion from the petroleum sector, including oil, gas and LNG. It argues that finite public resources should deliver a larger public return when market conditions are unusually strong.

Prosper Australia released the report last week under the title "Australia's resource wealth giveaway: How weak public capture leaves billions in revenue on the table." The report, written by former Victoria Department of Treasury and Finance economist Richard Wielga, compares Australia's system with resource-rich jurisdictions including Norway, Alaska, Chile, Peru, Québec and Queensland's coal sector.

The analysis tests whether Australia's regime is designed to collect more when prices and profits rise, how much the public actually receives for each dollar of resource value created, and whether stronger public capture necessarily pushes investment away. It says Australia's petroleum public-capture ratio is particularly weak compared with Norway and Alaska, although it notes outcomes also depend on commodity mix, price cycles, project maturity and cost structures.

Queensland model cited in broader reform push

Prosper Australia says recent changes in Queensland show that a more responsive royalty system is possible within Australia. Since July 1, 2022, Queensland's coal royalty scheme has used highly progressive price bands, which the group says make public revenue more sensitive to surging coal prices.

The report points to criticism of that regime from some mine operators, especially after job cuts and production reductions in Queensland in 2025. It says those complaints have come alongside falling coal prices and rising costs, complicating efforts to link employment changes solely to higher royalties.

Overall, the report recommends modernising royalties and addressing what it describes as petroleum under-capture while still allowing viable projects to earn a commercial return. It says governments should adopt market-linked royalties that increase when commodity prices move above long-run norms, so the public share rises automatically during boom periods while production continues.

In our earlier coverage of Malaysia’s push to strengthen its fiscal buffers after Budget 2027, we explained why policymakers are being urged to expand fiscal space as global shocks and higher financing costs become more persistent. The piece highlighted proposals such as broadening the tax base and refining subsidies, alongside the view that more efficient revenue collection and stronger buffers are key to sustaining consolidation targets.

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