Monday, 19 June 2017
Matters of Public Importance
We are in the middle of an energy price crisis. If high gas prices are not addressed immediately, we will see a tsunami of job losses not just in my home state but across the nation. That is why, during the March negotiations for the enterprise tax plan bill, I negotiated a number of gas measures aimed at reducing prices. I want to talk about one of these measures, the restriction of gas exports.
As mentioned by Senator Williams, the government is in the final stages of introducing an Australian domestic gas security mechanism, which empowers the minister for resources to restrict exports to ensure that there is a sufficient supply of natural gas for the Australian domestic market. A 2016 ACCC inquiry into the east coast gas market found that we have a distorted gas supply market and 'evidence of monopoly pricing' in gas transport. In that environment, we will not achieve reasonable prices by simply ensuring there is sufficient supply. In these circumstances, we need to ensure that there is an oversupply to counter the monopoly factors at play.
The draft regulations do not go far enough to ensure that we can achieve a domestic price which is comparable to or better than the Japanese long-term contract rate. The regulations must be amended to ensure that affordability, not just supply security, is a formal consideration. We cannot afford to tread softly. That time has well and truly passed, and on any test—a pub test, a national interest test, an economic benefit test—it is simply wrong and unsustainable that the price of Australian gas in Japan is actually half the price of Australian gas being sold here in Australia. We must address this as a matter of the utmost urgency.