Australians paid $8 billion in alcohol tax in 2023-24. Beer, wine, spirits. The tax on oil and gas profits? $1.43 billion. The government gives mining companies $4.5 billion a year in diesel fuel rebates. That is more than triple what it collects from the resource rent tax. Your beer funds more federal revenue than a barrel of Australian oil. The numbers are public. The gap is not hidden.
On 3 November 2025, the Australian Taxation Office published its latest alcohol tax gap estimate. In 2023-24, Australians paid $8.0 billion in alcohol excise. The ATO noted that this represented 90.3% of expected collections, with a tax gap of $861 million. (Source: ATO, “Latest estimate and trends for the alcohol tax gap,” November 2025)
Later that same month, the Final Budget Outcome for 2023-24 confirmed that the Petroleum Resource Rent Tax, the levy specifically designed to ensure Australians receive a fair share of profits from offshore oil and gas extraction, had raised $1,430 million. (Source: Australian Government, Final Budget Outcome 2023-24, Table 4)
$8.0 billion from alcohol. $1.43 billion from petroleum resource rent. The tax on beer, wine and spirits raised nearly six times what the government collected from the tax on oil and gas profits.
The tax that was supposed to work
This is not the first time Australia has struggled to tax what gets dug out of its ground.
The Petroleum Resource Rent Tax was introduced in 1987 by the Hawke government. It applied a 40% tax on above-normal profits from offshore petroleum projects. The idea was simple: the resources beneath Australian waters belonged to Australians, and companies profiting from them should pay a share above and beyond ordinary company tax.
But the design let companies inflate their deductible expenditure using a compounding rate that exceeded inflation. For large LNG projects with decades of upfront capital costs, the PRRT liability could be deferred for years. Sometimes decades. INPEX’s Ichthys project, one of the largest gas developments in Australian history, was not expected to pay meaningful PRRT until at least 2027. (Source: IEEFA, “Mining’s costly diesel addiction must be a budget priority,” March 2026)
In 2010, the Henry Tax Review looked at Australia’s resource tax system and recommended significant reform. It found the existing arrangements were not delivering an adequate return to the community from non-renewable resource extraction. (Source: Australia’s Future Tax System, Henry Tax Review, 2010)
The Rudd government responded with the Resource Super Profits Tax. The mining industry spent an estimated $22 million on an advertising campaign against it. Rudd was removed as prime minister. The RSPT was replaced by the Minerals Resource Rent Tax, a narrower version applying only to coal and iron ore, with a lower rate and more exemptions.
The MRRT took effect in July 2012. In its first two years, it raised almost nothing. BHP, Rio Tinto and others used transfer pricing, accelerated depreciation and state royalty credits to reduce their liability to near zero. The Abbott government repealed it in September 2014, before it had collected any meaningful revenue. (Source: Parliamentary Library, “Mining tax repeal,” 2014)
The PRRT remained. Structurally unchanged.
What the numbers show
In August 2024, Treasurer Jim Chalmers announced reforms to the PRRT, introducing a deductions cap designed to limit how much companies could offset against their liability. The government estimated the changes would increase tax receipts by $2.4 billion over the forward estimates. (Source: Treasury, “Implementing reforms to the Petroleum Resource Rent Tax,” August 2024)
By June 2025, the ABC reported that the reworked PRRT was raising $4 billion less than forecast. The Australia Institute noted that in the decade during which Australian gas exports rose by $48 billion, PRRT revenue fell by $450 million. (Source: ABC, “Reworked Petroleum Resource Rent Tax raising $4 billion less,” June 2025; Australia Institute, October 2025)
Meanwhile, alcohol excise is collected at the point of production or importation, indexed twice yearly, and hard to dodge. Spirits are taxed at $107.99 per litre of alcohol, the highest rate outside Scandinavia. A carton of 24 full-strength beers carries roughly $18 to $20 in excise alone. (Source: Drinks Trade, “Australia’s spirits tax rises to $108 per litre of alcohol,” February 2026; ATO Excise Duty Rates)
The average Australian adult pays approximately $390 per year in alcohol excise. The PRRT contribution per dollar of gas exported from Australian waters is a fraction of a cent.
The diesel rebate
Then there is the diesel.
In 2023-24, the Fuel Tax Credit scheme cost the federal budget $9.6 billion. The mining industry received $4.5 billion of that, accounting for 47% of the total. Senator David Pocock noted in January 2026 that the scheme now costs $10 billion annually. (Source: IEEFA, March 2026; Senator Pocock, January 2026)
The Fuel Tax Credit is not means-tested. It applies to diesel consumed off-road, which includes virtually all mining operations. Miners receive a full rebate of the excise that would otherwise be embedded in the fuel price.
When the $4.5 billion in diesel rebates to mining is set against the $1.43 billion collected in PRRT, the net federal position on petroleum resource rent is negative $3.1 billion. The government gives the petroleum sector more in diesel subsidies than it collects in resource rent.
The company tax comparison
The Minerals Council of Australia regularly cites a figure of $74 billion in total taxes and royalties paid by the mining industry. The ATO’s Corporate Tax Transparency Report for 2023-24 confirms that the mining, energy and water segment paid $48.5 billion in company tax, representing 50.6% of all corporate tax collected. Rio Tinto alone paid $9.5 billion in Australian taxes. BHP pays at the standard 30% corporate rate. (Source: ATO Corporate Tax Transparency Report 2023-24; Rio Tinto Taxes Paid Report 2024; BHP Economic Contribution Report 2024)
Company tax is not resource rent. It is a tax on profit applied to all industries at the same rate. The PRRT exists because company tax alone was considered insufficient to capture the community’s share of non-renewable resource extraction. That was the finding of the Henry Tax Review in 2010. It remains the case.
What this means
When the $4.5 billion in diesel rebates to mining is set against the $1.43 billion collected in PRRT, the net federal position on petroleum resource rent is negative $3.1 billion. The government gives the petroleum sector more in diesel subsidies than it collects in resource rent.
The comparison between alcohol excise and total mining taxation is not the one that matters. Mining company tax is substantial. The comparison that matters is between alcohol excise and the PRRT, because the PRRT is the mechanism that was specifically designed, debated, legislated and defended as the instrument through which Australians would receive their fair share of petroleum profits.
That instrument now collects $1.43 billion. The excise on what Australians drink collects $8.0 billion.
The PRRT reforms announced in 2023 and implemented in 2024 have not closed the gap. The diesel rebate system sends more money back to mining than the PRRT collects. The Henry Tax Review’s recommendations were only partially implemented for petroleum and entirely reversed for minerals.
The documents are public. The Budget Outcome is published. The ATO tax gap estimates are available. The Corporate Tax Transparency Report lists every entity. The PRRT data is published separately.
The gap is not hidden.
Sources
- ATO, “Latest estimate and trends for the alcohol tax gap,” November 2025
- Australian Government, Final Budget Outcome 2023-24
- Treasury, “Implementing reforms to the Petroleum Resource Rent Tax,” August 2024
- ABC, “Reworked Petroleum Resource Rent Tax raising $4 billion less,” June 2025
- Australia Institute, “A stronger PRRT cap,” May 2024
- IEEFA, “Mining’s costly diesel addiction must be a budget priority,” March 2026
- Australia Institute, “Australia’s Fuel Tax Credits and fossil fuel subsidies,” May 2024
- Senator Pocock, Fuel Tax Credits now cost $10 billion a year, January 2026
- ATO Corporate Tax Transparency Report 2023-24
- Rio Tinto, Taxes Paid Report 2024
- BHP, Economic Contribution Report 2024
- Drinks Trade, “Australia’s spirits tax rises to $108 per litre,” February 2026
- ATO Excise Duty Rates for Alcohol
- PBO, “Make gas exporters pay taxes and royalties,” June 2025
- Minerals Council of Australia, EY Report, June 2025
Related Investigations
Public Cost, Private Profit / Corporate Tax Avoidance
The $10.8 Billion Rebate
The Fuel Tax Credit Scheme hands back $10.8 billion a year to companies that burn diesel off-road. Mining takes roughly half. The cumulative bill is $122.7 billion. That is more than the Australian Army costs. One Rio Tinto executive lobbied the Treasurer personally to keep it. Eighty-six per cent of Australian mining is foreign-owned. The rebate flows to shareholders overseas. Australians pay foreign companies to dig up their own dirt.
The Singapore Shuffle
BHP sold Australian iron ore to its own Singapore subsidiary at below-market prices. The subsidiary sold at market rates. Profit booked in Singapore at 0 to 5 per cent tax. Not 30 per cent. BHP settled with the ATO for $529 million. Rio Tinto settled for roughly $1 billion. Chevron lost a Federal Court case over a $2.5 billion intercompany loan at an inflated interest rate. Glencore's ATO audit has been running since 2015. All settlements were made without admission of fault.
Related-Party Debt: How Australia's Gas Industry Shifts Profit Offshore
Australia's gas companies borrow money from their own parent companies at high interest rates. Those interest payments reduce their Australian tax bill to zero in some cases. The Chevron case established that the ATO can challenge these structures. New rules took effect in 2024. The question is whether they go far enough.