Key crossbenchers are pressuring the government to force large gas companies to pay more tax.

The Greens, two Jacqui Lambie Network senators and independent senator David Pocock have agreed to pass the government’s proposed tax reform if it agrees to lower the deductions cap.

The bill would cap tax offsets at 90 per cent of assessable income but the crossbench want this dropped to 80 per cent to secure their votes.

That would mean at least 20 per cent of a gas company’s revenue being subject to the petroleum resource rent tax and it would put an additional $2.6 billion into the coffers over four years.

The government’s plan as it stands would reap $2.4b.

Treasurer Jim Chalmers said the policy placed pressure on the opposition to vote in favour for additional revenue.

“We’re not surprised the Greens would like us to go further,” he told ABC radio on Tuesday.

“We expect the coalition’s support in the Senate. That’s been the indication but we’ll wait and see.”

Greens senator Nick McKim said gas corporations needed to pay their fair share of tax.

“The gas cabal has been playing the major parties like fiddles,” he said.

“This is a chance for Labor to take a small step towards making fossil fuel corporations pay their fair share of tax.”

Dr Chalmers told parliament the changes struck the right balance after it was revealed the government didn’t choose Treasury’s preferred plan which would have raised more money from gas companies.

The government went with the option where gas companies paid more tax sooner.

“We’ve come up with the way to ensure we can do that while protecting our international relationships and protecting the jobs in the sector and recognising that gas will play a role as a transition fuel as we embark on this net zero transformation,” he said.

Resources Minister Madeleine King also defended the move saying ministers have a range of options and discussions to make their own decision.

“We have options, we’ve spoken about them in depth, we’ve spoken with many people that have great interests, whether it be particular advocacy groups as well as the industry itself,” she told Sky News.

“This is a decision we made on the basis of consultations and the various advice.”

The Australian Petroleum Production and Exploration Association has backed in the 90 per cent, saying it provided certainty to investors.

– AAP