Australia's domestic gas market is at a tipping point. Longstanding and clearly identifiable structural weaknesses in our domestic gas market have been exposed by Russia's 2022 invasion of Ukraine. Despite being one of the largest exporters of liquefied natural gas in the world, because of our longstanding policy failures, Australians have been exposed to the same cost of energy shocks as energy-importing nations. Global energy prices have surged, and Australian households and businesses are paying the price. Household electricity bills have jumped by about $400 a year on average. It's a bit of a disgrace, actually, that Australia still continues to produce so much more gas than it consumes, and yet we're still facing potential shortages at home.

The Gas market review, completed in 2025, found that total gas production in Australia is roughly four times annual domestic consumption, but domestic regulators, including the Australian Competition and Consumer Commission and the Australian Energy Market Operator, continue to warn about possible shortages of gas to power our homes, our businesses and our industries—shortages which could emerge from 2029 on the east coast and from 2030 on the west coast of Australia.

The vast majority of Australian gas production still goes overseas. In 2024-25, almost 74 per cent of domestic gas production was exported. The challenge facing Australian households and manufacturers is not a lack of methane under our earth; it is that too much of our gas is unavailable to the domestic market. And it is particularly galling, given that fact, that Japan and China, Australia's two largest LNG customers, are increasingly reselling our gas to third countries for profit. The Institute for Energy Economics and Financial Analysis has claimed that, in 2024, Japanese companies sold between 600 and 800 petajoules of Australian LNG, mostly to Taiwan and South Korea. That's onselling of up to 1½ times the total annual gas consumption of eastern Australia. IEEFA has further claimed that Chinese companies made about $1.6 billion reselling Australian LNG between 2021 and mid-2026 and that they're on track for their most profitable year yet in 2026.

Successive governments have attempted to address our broken gas policies with a patchwork of mechanisms. The heads of agreement with east coast gas exporters, the Australian Domestic Gas Security Mechanism and the mandatory Gas Market Code have all sought to improve domestic supply and to moderate higher prices since the 2022 price of energy crisis. But the Gas Market Review concluded last year that these instruments cannot guarantee or direct a supply of gas and that they provide insufficient long-term certainty for investment and supply.

We need a simpler and more durable framework; hence, the gas review recommended a domestic gas reservation—a scheme able to increase volumes available to the domestic market and mitigate forecast shortfalls, increase supply diversity and improve upstream price competition. It does make sense to replace a system that requires exporters to offer gas to the domestic market with one which will require gas to be supplied to the domestic market. That could significantly strengthen the bargaining position of Australian gas users and, given that Australia remains mired in a prolonged cost-of-living crisis, it's contingent on all of us to support efforts by this government to reduce gas prices for households, manufacturers and small businesses.

The legislation will deliver greater certainty for our markets and for consumers, but there's still room for improvement across several aspects of the scheme. One of the most striking features of this legislation is the degree of ministerial discretion that it enshrines. Responsible ministers retain vast discretion to vary exporters' supply obligations, with little or no recourse for decisions to be contested or reviewed. The government has not yet responded to the widespread concerns about the extent of ministerial discretion expressed by many expert groups in their responses to the exposure draft of this legislation. As the Grattan Institute and IEEFA have warned, this level of ministerial discretion introduces significant uncertainty and risk for both buyers and also sellers. Setting the level of oversupply between zero and 10 per cent of domestic demand and adjusting domestic supply obligations for individual exporters without clear guardrails and guidelines could well create further uncertainty about future supply, both in aggregate and also from individual exporters. Markets function best when rules are transparent and predictable, not when they're subject to the vicissitudes of changing ministers and governments. A manufacturer weighing a 20-year investment horizon shouldn't have to speculate about how future ministers might exercise broad discretionary powers over the energy that they need to operate.

A second concern is the duration of export licences. Under this legislation, those licences could be granted for terms of 20 to 50 regulated periods, which effectively permits licences lasting for as long as half a century. This increases the likelihood that such licences will later have to be either revoked or amended. Clearly, this could increase investment uncertainty and raise concerns, at least potentially, regarding perceptions of sovereign risk. Additionally, Australia has pledged to hit net zero emissions well before those licences held by gas exporters to supply our domestic market reach their fifth decade. Licences extending for 40 years or more could well drive both increased domestic and global emissions beyond Australia's net zero commitments and also take us beyond the Paris Agreement. IEEFA has suggested shorter, 10-year licences would provide sufficient certainty for LNG contracting while allowing sufficient flexibility for governments to periodically reassess market conditions and our emissions trajectory. The member for Mackellar will move an amendment to that end, and I do support it.

Another issue raised by experts is the bill's oversupply mechanism. This legislation creates a means of ensuring that sufficient gas is available for the domestic market. Each year that number will be set by the minister, based on expert advice, at 10 per cent above projected total domestic demand. It's been argued that that 10 per cent buffer is potentially excessive—in fact, that it could create unnecessary price pressure on domestic producers—and that a more modest two to five per cent oversupply buffer would be adequate to provide the government with certainty of supply and also with the downward pressure on prices that it's seeking, but also with appropriate market forces remaining, such as to encourage electrification of homes and businesses. In other words, there would be enough gas for those households and businesses which still rely on it, but no more than is necessary; enough gas for manufacturers and trade-exposed industries that have limited short-term alternatives to gas, and just enough gas to smooth the shift to renewable energy.

A national gas reservation is one part of a broader suite of climate and energy policies which are driving our historic transition from polluting fossil fuels to clean energy. While a gas reserve is welcome, the long-term solution to energy affordability is electrification, powered by abundant, affordable renewable energy. Helping households to replace gas appliances with more efficient alternatives and businesses to electrify their industrial processes, while expanding our renewable generation and supportive infrastructure, has to be our endgame in reducing pressure on Australia's domestic gas market.

While a mechanism which secures affordable access to our own natural resources is important, we're still awaiting fair taxation of those exported resources. It's been reported that Australia's gas exporters are set to reap a $23 billion windfall this year off the back of the conflict in the Middle East. We're still giving up about $50 million every day, while multinational gas companies pay next to nothing in corporate tax and the PRRT. The best time for the government to fix these broken gas laws was four years ago. The next best time is now.

Finally, I want to address a rapidly emerging challenge to our energy security. The amendment I have circulated raises concerns about the extraordinary increase in construction of energy-intensive data centres in Australia and their potential impact upon our future energy needs. In the United States, the rapid growth of data centres has contributed to a near-tripling of gas-fired energy capacity in 2025 alone. Further increases are anticipated this year. Closer to home, the Energy Market Operator has predicted that data centres will account for at least 13 per cent of demand in the National Energy Market within the next decade. If gas is to be reserved for domestic users, that gas should benefit the households and traditional industries that underpin our economic resilience. I therefore urge the government and the regulators to ensure that the gas saved for Australian purposes by this scheme is reserved for Australian homes, critical infrastructure and businesses, not for energy-intensive data centres.

This bill represents an acknowledgement that our gas market is not functioning in the best interests of Australian consumers. It recognises that the global market poses unreasonable risks to domestic gas supply and to energy affordability. For that reason I support the establishment of a domestic gas reservation. However, given how foundational a national gas reservation is to the future of our energy market, I feel strongly that this legislation should include stronger limits on ministerial discretion. It should provide shorter and more realistic export licence periods. It should adopt a more modest oversupply buffer. And it should better align with Australia's climate commitments. I urge the government to strengthen the bill and to continue the more extensive work of building an energy system that is affordable, secure and compatible with our net zero future. With that, I move amendments (1) to (2) as circulated in my name:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House calls on the Government to implement a 25 percent gas export tax, which would lower domestic gas prices while raising revenue for Australians who desperately need cost-of-living help".