There’s a reason the recent gas tax debate has cut through. Australians haven’t suddenly developed a deep interest in resource taxation or the intricacies of fiscal design. It’s because something about the whole thing feels off.

We export enormous volumes of gas. We’re told the budget is tight. And somewhere between discussions of abundance and scarcity people sense that we’re not quite getting what we should.

While that instinct is right, the current debate is drifting toward something that sounds simple, feels right, yet misses the mark.

‘Australians pay more tax on beer than gas!’ You might have heard. It’s a great line. Brilliant, punchy, and memorable. But like most good lines, it simplifies.

What it actually compares is beer excise with one specific federal tax – the Petroleum Resource Rent Tax. That’s it. It leaves out company tax. It leaves out state royalties. It leaves out the broader design that governs how resources are taxed in Australia.

That doesn’t mean everything is fine. Far from it. The PRRT – particularly in the LNG context – has not delivered a clear or consistent return. That’s a real issue. A structural one.

But here’s the catch: when you build a policy argument on a partial comparison, you tend to get a partial solution.

There is a genuine and growing frustration that Australia’s gas wealth hasn’t translated into an obvious public dividend, and Senator Pocock and Richard Denniss are right to want to meet this head on.

If Australians don’t feel like they’re benefiting from their resources, the system – no matter how technically sound – has failed a basic test of legitimacy.

But acknowledging the frustration is only step one. Fixing it is step two.

The leap being made is quick. Almost too quick: if the system isn’t delivering, impose a 25 per cent export tax. As a solution this feels clean and satisfying. But it is possibly wrong.

Because beneath that simplicity sits a stack of assumptions about investment, supply, pricing, and capital flows that are being treated as givens when they are really guesses. And in a world where capital moves quickly and Australia competes with countries like the United States and Qatar, that kind of drift from reality matters a lot.

This is where former WA Energy Minister Bill Johnston, in his submission to the Senate inquiry, brings the debate back to earth. His argument cuts to the core of the issue: Australia is a federation – full stop – and that shapes everything about how resources are taxed.

Resource taxation here isn’t a single, neat system designed in Canberra. It’s layered, fragmented, and shared. States own the resources and collect royalties; the Commonwealth collects company tax and the PRRT; offshore and onshore projects are treated differently; and individual projects are structured in ways that produce very different outcomes.

So, when we compare Australia to countries like Norway – and only look at federal revenue – we’re not comparing like with like. We’re comparing slices of entirely different systems.

That doesn’t mean Australia is getting it right. It means the problem is more complex than the headline suggests. That complexity, inconvenient as it is, matters if you actually want to fix something rather than just talk about it.

At its core, the issue isn’t whether gas is taxed, it’s whether the system delivers a clear, consistent return to Australians, and right now, it doesn’t feel like it does. In politics, that perception isn’t secondary; it is the issue.

But the debate is being reduced to a false choice: keep the current system or impose a heavy export tax. Serious reform is rarely that simple.

Let’s step back for a moment. If we were designing the system from scratch with one objective in mind, it wouldn’t be to maximise tax in any single year. It would be to ensure Australians clearly and consistently benefit from their resources over time.

A few things follow from that. Every project would deliver a minimum return – not in theory, but in practice – through a reworked Petroleum Resource Rent Tax or a simpler baseline mechanism that actually pays out earlier. The system itself would be simpler, not for elegance, but because complexity invites avoidance.

Domestic supply would be locked in, drawing on the Western Australian model because energy isn’t just an export, it underpins the entire economy. And a modest, predictable export levy could sit alongside this – something in the order of 5-7 per cent – to ensure Australians share in the upside without destabilising investment.

Most importantly, a portion of that revenue would be converted into something lasting. A sovereign fund. A national endowment. A dividend that outlives the resource itself.

In other words, the goal wouldn’t just be to collect more tax. It would be to build a system that works.

And this is where the debate needs to mature. Because Richard Denniss and David Pocock are right about something important. Australians do want a fairer return. They are right to question whether the current system is delivering. And they are right that the status quo is no longer politically or economically sustainable.

But where the argument begins to lose its footing is in the oversimplification.

In my opinion, it forces people into camps. It pushes serious contributors – industry, states, policy experts – away from the table. And it risks replacing a flawed system with a brittle one.

Australia has a chance to reset how it manages its natural wealth. It’s a test of whether we can take something abundant and turn it into something enduring.