Fed budget has each-way wager on gas, electrification

Most Australians are keen to switch from gas to renewable electricity because of climate change and rising bills, but the federal government will keep the fossil fuel flowing.

"The government will soon release a mandatory code of conduct to ensure Australians have access to Australian gas at reasonable prices and on reasonable terms," Climate Change and Energy Minister Chris Bowen told AAP.

"It will address systemic issues within the wholesale gas market, including insufficient, competitive pressure and bargaining power imbalances," he said.

But a package is also being developed in the lead-up to the May budget to help households and businesses slash bills by going electric and using energy more efficiently.

Research released on Monday by an independent think tank found a majority support full electrification in the home as well as for vehicles and appliances.

The Australia Institute report found about 55 per cent feel positive about electrifying their homes, citing environmental reasons (59 per cent) as the biggest driver, followed by the potential to reduce energy bills (18 per cent).

"Australians understand that electrification doesn't just result in a safer climate for the next generation, but that it can also help them make ends meet in the near term," institute spokesman Noah Schultz-Byard said.

"Electric homes, cars and appliances underpinned by clean energy and battery storage will play a key role in confronting our economic and environmental concerns."

But the biggest barrier is the up-front cost, he said, urging more government support to get households over the line.

Petrol and diesel-run vehicles were the least preferred option behind both hybrid and electric cars, according to the report.

Of those anticipating to buy a new car within the next 10 years, one in four expect to buy electric while two in five would buy a hybrid car.

Treasurer Jim Chalmers also faces pressure to tap gas profits, which have soared during the global energy crisis sparked by the Russian invasion of Ukraine more than a year ago.

The complex Petroleum Resources Rent Tax (PRRT) arrangements, which hand out tax breaks for offshore production as well as gathering revenue for federal coffers, was forecast in the October budget to raise $2.6 billion in 2022/23.

The industry says gas companies are among the biggest taxpayers, but critics say Australians are being short-changed on their resource.

The latest data from the Office of the Chief Economist forecast companies' liquefied natural gas earnings at $91 billion in 2022/23 - triple the level of 2020/21.

A detailed gas tax review begun under the previous government has been received by the treasurer for consideration.

Finance Minister Katy Gallagher confirmed on Sunday that Treasury's view is "improvements" could be made to the PRRT.

"We're considering those, we haven't formed a view about it, whether it's this budget or this year," Senator Gallagher told ABC.

The industry was well across what those "modest changes" might be, because they've been involved in talks, she added.

Dr Chalmers declined to provide further comment on the PRRT ahead of the budget to be released on May 9.