Hanson proposes tax break for drilling alongside new gas royalty

One Nation leader Pauline Hanson has unveiled a significant proposal to overhaul Australia’s energy fiscal policy, advocating for a flat royalty on the production of new gas projects paired with targeted tax incentives for exploratory drilling. The move is designed to stimulate domestic supply and simplify the revenue stream from the nation’s natural resources amidst an ongoing national debate over energy security and the cost of living.

The proposed framework seeks to replace or supplement the current Petroleum Resource Rent Tax (PRRT), which critics argue is overly complex and fails to provide immediate returns to the taxpayer. By introducing a flat royalty, Senator Hanson aims to ensure that the federal government captures a predictable portion of production value from the outset, while the drilling offsets are intended to encourage junior explorers to unlock new reserves in under-utilised basins.

“The delicate balance between resource sovereignty and investor certainty remains the central fault line in Australia’s ongoing energy debate.”

As Canberra faces increasing pressure to balance decarbonisation targets with the immediate needs of the industrial sector, this policy shift is expected to meet both support and scrutiny in the Senate. Industry stakeholders have expressed cautious interest in the exploration incentives, though concerns remain regarding how a dual royalty and tax-break system would impact long-term investment stability in a highly competitive global market.