The federal government's push to pull more taxes out of big gas producers could face an uphill battle after a lukewarm response from the Opposition and Greens.
Treasurer Jim Chalmers called for parliament to support the overhaul of the petroleum resource rent tax (PRRT) to raise "more tax, sooner" from offshore gas projects and make a meaningful contribution to the budget.
The proposed changes include a 90 per cent cap on deductions from July 1 and are expected to increase tax receipts by $2.4 billion over the forward estimates.
Australian Petroleum Production & Exploration Association, the peak body for oil and gas producers, backed the changes, said Labor had weighed up the sustainability of the budget and the need to support the gas sector.
"The announcement will provide greater certainty for our industry to consider the future investment required to maintain both domestic and regional gas supply security for our customers," chief executive Samantha McCulloch said.
Opposition treasury spokesperson Angus Taylor said the "devil would be in the detail" after raising concerns about Labor's track record on changing tax settings that applied to the sector.
"I'm not going to comment until we've seen the detail," he said.
Dr Chalmers warned the Coalition would be "dealing the Greens in" by voting against the changes and that was not what the industry wanted.
The government had committed $12 million over three years from 2023-24 for a review of the environmental management regime, including consultation requirements for offshore projects that engage First Nations peoples.
Greens spokesperson for Resources and First Nations, Yamatji Noongar Senator Dorinda Cox, said the proposal was unlikely to be ambitious enough and the Albanese government had let "the gas corporations write this policy".
"Decarbonising our planet cannot rely on carbon capture and storage when it's never been proven to work at the scale we need to reverse the climate crisis we're in," she said.
According to a federally-funded report released in March 2021, the decommissioning cost to plug wells and remove oil and gas equipment from Australia's oceans was estimated to cost $55 billion by 2050.
"The government has a long way to go to adequately invest in the decommissioning industry," Senator Cox said.
"Any review into the impacts of offshore petroleum extraction must consider the cultural impacts alongside the environmental impacts.
"It's encouraging to see the government include consultation with First Nations people as a requirement of the review, but consultation must be with free informed and prior consent, and undertaken broadly with all affected Traditional Owners, not a select few."
Senator Cox noted that despite changes secured by the Greens "with a $2 billion package to help households, businesses and public housing get off gas", the government is still spending "$41.4 billion on fossil fuel subsidies, more than the $29.5 billion climate spend".
"The PRRT announced before the budget will bring in only $2.4 billion over four years - less than the tax on beer and spirits, less than visa application charges, less than crippling student debt, and significantly less than the $13.4 billion extracted from big tobacco," she said.
