It has been a good couple of years for Australia's gas exporters.
The export price of gas jumped from about $2 a gigajoule in 2020, to a peak of $66 a gigajoule in mid-2022.
But as company profits soared, there was a sense of frustration among some that not enough revenue was coming back to Australians for the sale of Australian gas.
Tuesday's federal budget will include changes to a key tax levied on gas exporters, aimed at bringing billions in additional revenue to the budget over the next few years.
But it falls short of more substantial proposals that have been previously put forward.
So what's changing?
First, a recap of the PRRT.
The tax in question is the Petroleum Resource Rent Tax.
It's been around for decades, but has only really leapt into prominence over the past few years.
It's a tax specifically levied on Australia's offshore oil and gas projects.
Onshore oil and gas projects pay 'royalties' to state governments — a slice of their revenue, which compensates those governments for letting them produce and sell oil and gas.
But there are no royalties charged on offshore projects (with some exceptions, like Woodside's North West Shelf project).
Instead, the federal government established the PRRT in 1988 to try and both encourage companies to explore offshore oil and gas projects, and tax the profits they made from doing so.
It taxes profits at 40 per cent, which sounds like a lot. The argument is the gas is a Commonwealth asset, so the Commonwealth should be sharing in the profits.
But the PRRT has a generous deductions scheme in place for how gas companies calculate their profits.
Companies can claim back the total capital cost of building a project, plus substantial interest, before any PRRT is charged.
Some companies have suggested they may never pay PRRT on gas revenue from certain projects, because their revenue won't eclipse available deductions.
That's what the government is seeking to address with this change.
A tax tweak
The government's change aims to ensure projects cannot avoid paying PRRT entirely, and make companies pay the tax sooner than they might have otherwise.
Currently companies can deduct their capital costs from 100 per cent of their project income.
Under this proposed change, they would only be able to claim against 90 per cent of their income.
That leaves 10 per cent of income that can be hit with the PRRT.
It's expected the change will bring in an additional $2.4 billion over the next four years.
Treasurer Jim Chalmers said it is a modest change that strikes the right balance between getting more revenue out of the sector, without harming its viability.
"What we want to do is we want to make sure we get more revenue sooner," he said.
"But we also want to recognise that we want to see investment in the sector, we want to see supply out of these projects."
Too hard or too soft?
Most industries don't welcome new or increased taxes coming their way, particularly one worth $2.4 billion.
But the gas industry has been generally supportive of this change, and called on the Coalition to help the government pass it through the parliament.
The chief executive of gas industry body APPEA, Samantha McCulloch, said they're pleased to have an outcome they can work with.
"What we need to see in terms of the taxation regime is certainty and stability, to allow investment to occur," she said.
The Coalition is reserving its judgement on the change, saying it needs time to get across the detail and talk to some of the key players involved.
There are those opposed to the change, and loudly warning of dire consequences.
Australia's largest current and future gas projects are in Western Australia, and the West Australian newspaper headlined Monday's paper with 'IT'S A TAX ON WEST AUSSIES'.
But there are many arguing it doesn't go nearly far enough.
Independent MP Sophie Scamps said the support from the gas industry should set off alarm bells.
"The changes to the PRRT are a positive step, albeit tiny and timid," she said.
"The fact that the changes have been so enthusiastically welcomed by oil and gas lobby group APPEA is a red flag."
Independent Senator David Pocock agreed, arguing the government should have gone much further.
"Really disappointed to see the government is really just doing some tiny tinkering at the edges," he said.
"We are not getting our fair share from our own resources."
Alternative paths
The changes look set for now, and if the government can secure the Coalition's support, will pass through the parliament with ease.
But if the government is forced to negotiate on the changes, the Greens and others may urge them to go harder.
The Greens have previously suggested the government wipe out all existing deductions, essentially forcing the companies to pay the maximum rate of PRRT, and apply a new 10 per cent royalty.
Former ACCC boss Rod Sims is among those who would have preferred to see the government push harder, and has a more modest proposal for change — which is not dissimilar to the government's current approach.
He suggests only allowing the gas companies to claim against two-thirds of their income, rather than 90 per cent.
Mr Sims suggests that would triple the additional tax revenue, flowing into government coffers.
"I'm quite happy with the way they've done it," he said.
"I would have gone in a lot harder, were it me, and I think that would have been appropriate under the circumstances."
