Labor voted with the Greens to set up a parliamentary committee into the taxation of Australia's gas resources on Monday.
Global gas prices have surged as a result of the Middle East conflict, putting Australian exporters on track for windfall profits and prompting calls from the crossbench for an urgent 25 per cent tax on gas exports.
Those calls have grown louder in recent days, with Liberal industry spokesman Andrew Hastie stating he was open to higher gas taxes.
Labor backbencher Ed Husic lent his voice to the push, urging his party to stand up to the gas lobby.
"Australia cannot be meek. It cannot be timid," he told reporters in Canberra.
"If other countries had access to the volumes of gas that we do, you can absolutely bet they would make sure they get their fair share first."
Mr Husic said multiple Labor colleagues had indicated their support for the proposal.
Expectations the government will move on the gas tax regime in the upcoming budget were buoyed when the ABC reported earlier in March the prime minister's department had requested Treasury draw up options for a levy on windfall gas profits.
The committee, to be chaired by Greens resources spokesperson Steph Hodgins-May, is due to report in early May, before the budget.
She will use the inquiry to push for the 25 per cent gas export tax, which could raise $17 billion a year in extra revenue, research by left-leaning think tank the Australia Institute has found.
"This inquiry into a gas tax comes at a crunch moment. The gas cartel is poised to cash in on global conflict while Australians are being smashed with rising bills at home," Senator Hodgins-May said.
"It is a moment of reckoning for Labor. Will they stand up to vested interests and make gas corporations pay or will they let them continue to write the rules?"
Australian Energy Producers chief executive Samantha McCulloch said the push for higher taxes threatened Australia's energy security and would discourage investment in new supply.
"It is no coincidence that the loudest voices calling for more taxes on the gas industry are the same voices trying to shut the industry down," she said, adding the gas sector paid $21.9 billion in taxes and royalties in 2024/25
Mr Husic rubbished the gas lobby's suggestion increased taxes would threaten extraction.
"My response to that is, if they're not prepared to invest, step aside, let others in. Because world gas demand, as it is, means there will be a lot of companies that want to do that work."
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