The government faces a new Senate showdown over a plan to tax big gas companies that crossbenchers say does not go far enough.

The Greens and Senate independents are behind a threat to block its $2.4 billion gas tax overhaul.

Independent Senator Jacqui Lambie is pushing an alternative plan, which would roughly double the government’s revenues by lowering the amount of investment gas companies can offset against their tax.

Independent Senator David Pocock accused the government of going easy on gas companies while “crying poor” on issues such as cost-of-living relief and building new housing.

“Offshore gas companies have paid $0 [in tax] while selling our gas and making windfall profits,” Senator Pocock said.

“[The government] can’t cry poor when it [comes] to things like cost-of-living relief, more money for housing or the most vulnerable in our community but at the same time refuse to raise more revenue from oil [and] gas companies.”

How big a change?

That the complicated and generous Petroleum Resource Rent Tax needs to change is a rare point of tripartisan consensus in Australian politics.

But it’s on how to change it that opinions differ.

A review of the policy options for changing it was first commissioned by former treasurer Josh Frydenberg.

It presented three options.

The Greens and Senator Pocock say it declined one that would have brought in the most money from gas companies.

Treasurer Jim Chalmers says the government went for a policy that would bring in money soonest but also struck the right balance.

“It’s the best way, in our view, to get more revenue sooner to pay for Medicare and bulk billing and cost-of-living relief in the budget,” he said.

“We [also] want to protect jobs in the industry; [gas] has a role to play in the net-zero transformation.”

Dr Chalmers also argues Australia has an international obligation to its trading partners.

(After the invasion of Ukraine disrupted international energy markets, Australia was projected to become an even bigger gas supplier to East Asia and international partners like Japan.)

“The pressure is on the Coalition now,” Dr Chalmers said.

Under siege

Tony Wood, director of the energy program at the Grattan Institute, a non-partisan policy think tank, says the government could have gone harder.

But he says the tax is a decision about more than economics or the budget.

“This is an industry that feels seriously under siege,” he said.

“The government’s probably got to get to an arrangement where they’ve got at least [a] reasonably good working relationship because it is [a] significant industry.”

Some companies affected by the tax are involved in developing projects like renewable hydrogen.

The government has moved in the past year to cap gas prices and create a mandatory industry code of conduct.

Victoria has, meanwhile, declared an end to gas connections in new homes.

Politically charged

Taxing miners was politically disastrous for Labor the last time it was in government.

In the six weeks leading up to his being deposed as prime minister, the mining industry spent more than $20 million in a campaign against Kevin Rudd’s Resource Super Profits Tax.

His successor, Julia Gillard, came to power and moved quickly for a ceasefire by calling for those ads to be taken off television.

But Tony Abbott came to power on a promise to repeal the policy that replaced it.

Opposition Leader Peter Dutton has previously indicated he would support the government’s tax – but only if he could make a deal to cut down on the “chains” of mining industry regulations.

“That gas companies will contribute so little, while so many in the country are enduring a cost-of-living crisis represents an unacceptable missed opportunity,” Greens Senator Nick McKim said.

Samantha McCulloch from the Australian Petroleum Production and Exploration Association, a lobby group for the industry, said it had paid an additional $10 billion in taxes and royalties to state and federal governments last year.