A Senate crossbench majority is in favour of reforming the petroleum resource rent tax (PRRT) because taxpayers are not receiving a fair share of revenue for gas resources – a situation the Labor senator Sam Dastyari has called a “complete fucking rort”.

One Nation, the Nick Xenophon Team and senators Jacqui Lambie and Derryn Hinch told Guardian Australia that they would be urging the government to change the system that had allowed multinational gas companies to avoid paying tax on some offshore Australian resources at a time when gas exports are booming.

One Nation, Lambie and Hinch support a 10% flat tax to replace the PRRT to ensure adequate royalties are paid to the commonwealth. Xenophon would not discuss a specific figure but said Australians needed a fair return on resources and an increased supply of gas.

On Sunday, the left-leaning McKell Institute, the Tax Justice Network and Dastyari launched a report that called on the Turnbull government to apply a flat rate resource royalty to all offshore gas projects – a move that would deliver taxpayers $28.4bn over 10 years.

“There is no other way of framing what is going on at the moment with the offshore gas industry without saying the whole thing has become a complete fucking rort,” Dastyari said.

“It really is. The idea that you are paying more tax in a beer than they are paying on billion-dollar projects shows how ridiculous the system has become. You will get industry and government saying ‘but nothing we are doing is illegal’ but that is exactly the point. The fact that they can get away with this is the problem.”

A spokesman for One Nation said the party favoured an imposition of a royalty to ensure that, no matter how large resource companies structured their affairs, Australia would receive some tax revenue.

“We favour imposition of a royalty so we get a drip of money all the time,” the spokesman said. “Those companies can then arrange their affairs any way they like but at least Australia is going to get something.”

The spokesman said One Nation senators would be discussing the issue but a royalty proposal would be taken to the government as the Coalition began discussions to gain the party’s support in the Senate for budget measures.

“The government has been very good at engaging with us, they are aware we don’t horse trade and we think they would be mad to reject this,” the spokesman said. “Everyone wants the multinationals to pay their fair share of tax.”

The whole thing has become a complete fucking rort. Labor senator Sam Dastyari

Hinch said that while he was suspending final judgment until the government review reports later in the month, 10% would be fair and reasonable.

“I think a 10% tax/royalty would be fair and reasonable,” Hinch said. “Reportedly, Exxon’s paying no company tax at all. Neither is Chevron. I’m told that Qatar is expected to raise about $26bn in revenue from royalties by 2021.

“Compare that to Australia. The forecast is that we’ll raise less than $1bn under the current system – even though Australia may soon become the world’s biggest gas exporter thanks to projects exploiting vast reserves off WA and in Queensland.”

In the last sitting week, Lambie argued against the government’s company tax cuts on the grounds that Australia was “giving away” its resources. She said multinational companies needed to pay more tax if the government wanted budget repair.

“Australians are missing out on billions of dollars in royalties when Australia is experiencing a gas boom,” Lambie told Guardian Australia.

“Since revealing how little gas companies pay in royalties to Australia in the Senate more than a week ago, the public response has been overwhelming. I will make sure the government looks at this as a matter of priority for the budget in May.”

Xenophon said he would not discuss a specific figure but warned the PRRT needed to be part of the solution to solve the gas crisis because businesses would not survive without an increase in domestic gas supplies.

“The policy objective has to be fair return on the natural resources of Australia,” Xenophon told Guardian Australia. “Secondly, the prices paid for gas is increasing, which has seen domestic gas being double the price of Australian gas sold into Japan. The PRRT needs to be part of the solution.”

The treasurer, Scott Morrison, admitted last year that revenues from the PRRT had halved since 2012-13 and crude oil excise collections had fallen by more than half.

Origin Energy’s Australia Pacific liquefied natural gas facility at Curtis Island in north Queensland.

At that time, he announced a formal review of the PRRT regime in November after a rapid decline in revenues from the tax.

The government review, headed by the former executive director of treasury Mike Callaghan is due in April and recommendations were to be taken into the budget process.

In November, Morrison said, “It is important these companies pay their fair share when it comes to these issues.”

But last week Morrison appeared to walk away from significant changes to the PRRT regime in the May budget, notwithstanding the government’s own review.

He rejected suggestions that Australia was missing out on tax revenue and warned that any changes needed to ensure investment projects were not effected.

“What I’m saying is, if there are improvements that need to be made in this tax then you need to be very careful about how you do it because the last thing we want to see is go and scuttle a major investment project in this country by making changes to a tax arrangement which is critical to the yes-no decisions of those boards,” Morrison said. “That would cost jobs.”

In spite of Dastyari’s strong words, Labor has not committed to change the policy. It referred the issue to an inquiry by the Senate standing committee on economics before the government announcing its review but that committee will not report until September.

Labor faced a fierce industry campaign against its mining tax under the Rudd and Gillard governments as did the former WA National party leader Brendon Grylls, who lost his seat in the recent state election. But the resource industry is split on the royalty debate.

If Labor were to support change, there would be a majority in the Senate favouring PRRT reform, including the Greens and the majority of the crossbench.

The McKell report found the PRRT was extremely generous towards major oil and gas companies, “who poorly compensate the Australian public for the publicly owned resources they are extracting from the ground and selling for profit”.

The report found PRRT tax revenue continues to decline. In 2014-15 the commonwealth received $1.8bn in PRRT and the report predicts this will decline to a predicted $880m by 2020.

“At the same time, gas and oil companies in Australia are making significant profits, with the industry turning over $67bn in 2014-15,” the report says.

The report, written by professor of economics Richard Holden, of the University of New South Wales business school, and Marieke D’Cruz, of the McKell Institute, found the PRRT had become increasingly inadequate in delivering economic benefits for Australians.

At present, LNG projects located in commonwealth waters are not subject to any royalties.

“The introduction of a royalty-based regime is both conceptually more appropriate and economically more beneficial to the commonwealth, and could deliver up to $11.361bn in revenue over the four-year forward estimates, or up to $28.4bn over 10 years,” the McKell report says.

“Simply, the current system based solely around the PRRT, the system that applies to the majority of projects in commonwealth waters, results in significant portions of Australia’s gas reserves being extracted with no compensation to the Australian owners of these resources. This is unacceptable.”

The report found the Australian tax regime was not in line with other countries, including Qatar, which has been the world’s biggest exporter of LNG.