Coal, oil and gas corporations cause the vast majority of Australia's climate pollution, but pay almost no tax, particularly in proportion to their extraordinary profits. Meanwhile, Australian households collectively pay an average $38 billion a year in climate disaster costs. The Make Big Polluters Pay alliance is calling on the Australian Government to introduce a Climate Pollution Levy on fossil fuel corporations, directing every dollar raised into a Climate Compensation Fund for communities on the frontline of climate impacts.

Background/context:

In August 2025, the Make Big Polluters Pay alliance, a coalition of climate-impacted communities, faith, youth, First Nations and Pacific organisations, released Making Coal, Oil and Gas Corporations in Australia Pay Their Fair Share for the Costs of Climate Change. The report lays out the case for a Climate Pollution Levy on fossil fuel extraction, with all revenue ring-fenced for a Climate Compensation Fund. 

Key findings from the report:

1. Fossil fuels drive Australia's emissions, but barely get taxed on their extraordinary profits. Despite the industry earning $369.6 billion in revenue in 2024–25, the ATO has labelled oil and gas "systemic non-payers" of tax. Over the decade to 2023-24, nurses as a profession paid $7 billion more in tax than oil and gas companies did.

2. The main tax meant to capture this revenue doesn't work. The Petroleum Resource Rent Tax was reformed in 2023, but still raised only $6.3 billion - about $4 billion less than forecast. Shell doesn't expect to ever pay PRRT on Gorgon, one of the country's largest gas projects.

3. Exported gas is often given away royalty-free. More than half the gas Australia exports carries no royalty at all. That’s an estimated $149 billion worth of LNG out of $265 billion in total exports.

4. Communities, not corporations, are absorbing the cost. Climate disasters cost the Australian economy an average of $38 billion a year (equivalent to $3,800 per household) against a Federal Disaster Ready Fund of just $200 million annually.

5. Insurance and cost-of-living pressure is mounting. Home insurance premiums rose 14% between 2022 and 2023. Over 340,000 households currently have no home insurance at all, and more than two million homes are now at moderate to high risk from extreme weather.

The report’s proposed fix is a Climate Pollution Levy on fossil fuel extraction, estimated to raise around $46 billion a year, rising over time as fossil fuels are phased out. This money would flow into a Climate Compensation Fund, with dedicated streams for disaster recovery, adaptation, a First Nations-led Climate Self-Determination Fund, a just transition for fossil fuel workers, and climate finance for the Pacific, alongside safeguards like price controls and ACCC monitoring to stop companies passing the cost on to households.

Why is this important?

Right now, the industry most responsible for climate pollution is largely exempt from paying for the damage it causes, while households cover the difference through rising insurance premiums, grocery bills and disaster recovery costs. A properly designed levy would shift that cost back onto the corporations profiting from fossil fuel extraction, fund the communities hit hardest, including First Nations communities, disaster-affected regions and Pacific neighbours, and create a financial incentive to accelerate the shift away from fossil fuels altogether.

Desired outcomes

That the Australian Government introduces a Climate Pollution Levy on coal, oil and gas corporations, with the resulting Climate Compensation Fund. This must include:

• Setting the Levy at a level sufficient to reflect the true cost of fossil fuel pollution, rising over time as production is phased out

• Legislating safeguards such as price controls and ACCC monitoring to ensure corporations bear the cost, not households

• Directing 100% of Levy revenue into a Climate Compensation Fund, including a First Nations-controlled Climate Self-Determination stream, disaster and adaptation support, a just transition fund for fossil fuel workers, and increased Pacific climate finance

• Closing existing loopholes by reforming the Petroleum Resource Rent Tax, removing fossil fuel subsidies, and applying royalties to currently royalty-free gas exports

Who to contact: 

• All Labor MPs, including senators, as they all vote in Caucus

• Your local Federal MP (check on this website if you're unsure who that is)

• Key Federal Labor ministers, including: Treasurer Jim Chalmers; Climate and Energy Minister Chris Bowen; Prime Minister Anthony Albanese; Resources Minister Madeleine King; Assistant Minister for Climate Change and Energy Josh Wilson

• Federal Senate crossbenchers, including the Greens, Independents David Pocock (ACT), Fatima Payman (WA), and Jacqui Lambie (JLN) - a levy of this kind will need their support to pass the Senate, and they can also help put pressure on the government

Resources:

• Email example below and General email template here to write your own from scratch

• Guidelines and tips for writing emails

• The full report: Make Big Polluters Pay, August 2025

Action you can take:

1. Email your MP and/or relevant Ministers:

If you need some help getting started with your email, here is an example. 

Please don’t copy it exactly - personalise it and tailor it to the MP you are writing to. 

In addition, when writing to a Minister or Shadow Minister, start by saying that you’re writing to them in their role as Minister for xxxx, otherwise they will probably just forward your email to your local MP.

[MP name] [Member for …. or Minister for ….]

Dear …,

[personal statement, who you are and why you care]

I'm writing about a proposal from the Make Big Polluters Pay alliance for a Climate Pollution Levy on coal, oil and gas corporations. Despite earning $369.6 billion in revenue in 2024–25, the fossil fuel industry pays almost no tax — the ATO itself has called oil and gas companies "systemic non-payers." Meanwhile, climate disasters are costing Australian households an average of $3,800 a year, and insurance premiums keep climbing.

I don't think it's fair that everyday households are covering costs that the fossil fuel industry's own pollution is causing, while the industry itself avoids paying its share. A levy on coal, oil and gas extraction, with all revenue directed into a Climate Compensation Fund for disaster recovery, adaptation and a just transition, would start to fix that.

So I am contacting you to ask:

Will you support introducing a Climate Pollution Levy on coal, oil and gas corporations?

Will you ensure any levy includes safeguards so the cost falls on corporations, not households?

Will you commit to directing all revenue raised into a dedicated Climate Compensation Fund for impacted communities?

I look forward to your response.

Sincerely,

Name

Address

Phone 

(Note: your contact details are required if you want a reply)

Hi, my name is ….. and I’m a voter in [your electorate].

I’d like to speak to …..[name of MP]

(Staffer will probably say: I’m sorry they’re not available, can I take a message?)

Yes, thank you! Would you please tell them:

I'm concerned that coal, oil and gas corporations pay almost no tax in Australia, while households are paying an average of $3,800 a year in climate disaster costs.

And ask them to support a Climate Pollution Levy on fossil fuel corporations, with all revenue directed into a Climate Compensation Fund to support communities dealing with the costs of climate change.

Thank you!

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