Sam McMahon (NT, Country Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister for Resources and Northern Australia, Senator Canavan. Can the minister please advise the Senate how the Liberal-National government is working to reduce gas prices? What is the importance of stability and certainty in this industry for Australian families and businesses?

Matthew Canavan (Queensland, Liberal National Party, Minister for Resources and Northern Australia) Share this | Link to this | Hansard source

I thank Senator McMahon for her question. It's a very important question, because the availability and price of gas in Australia is not only important for many Australians to heat and cook in their own homes; it also underpins thousands of jobs—tens of thousands of jobs—in businesses that have very high expenses in term of gas use, so price is extremely important to protect those jobs. To protect those jobs, the Liberal-National government took action a couple of years ago to help lower gas prices.

At the time, gas prices had peaked. There were some shortages, particularly in southern Australia. At the time I and the then minister for industry, Senator Sinodinos, announced a new mechanism, the Australian Domestic Gas Security Mechanism, which for the first time was able to restrict gas exports to protect those jobs in Australia. Since that time, gas prices in eastern Australia have fallen considerably. At the time, in early 2017, the spot gas price in Brisbane was $12.15 a gigajoule. Last month it averaged $5.16—a 42 per cent reduction. In southern Australia, in Sydney, prices have fallen 28 per cent, from $11.53 two years ago to $8.28 last month. In Adelaide and Victoria, there have been 20 per cent price reductions as well. We now have a situation where prices in Victoria and Adelaide, in particular, are higher than those in Queensland because the gas is being produced in Queensland and it costs a significant amount to transport the gas long distances.

What we need is for the Victorian government and other governments in New South Wales and South Australia to remove unnecessary restrictions on gas production. To protect those jobs, we need to have a supply of gas. If we don't have the gas supply, gas prices will be higher than they need to be and people's jobs will be at greater risk than they need to be. We in this chamber are on the side of jobs. We are on the side of manufacturing industries. That's why we're getting behind gas production. That's why we've maintained a situation where Australian gas is— (Time expired)

Scott Ryan (President) Share this | Link to this | Hansard source

Senator McMahon, a supplementary question?

Sam McMahon (NT, Country Liberal Party) Share this | Link to this | Hansard source

What opportunities are on the horizon for the development of gas in Australia, particularly in the Northern Territory?

Matthew Canavan (Queensland, Liberal National Party, Minister for Resources and Northern Australia) Share this | Link to this | Hansard source

I recognise Senator McMahon is a big advocate for the development of her territory. The Darwin area and the broader surrounds of the Northern Territory have enormous potential. While gas production is being unnecessarily restricted in some parts of Australia, finally, finally, finally the Northern Territory government has opened up that possibility in northern Australia. It's a huge opportunity for our country. There is something like 180,000 petajoules of gas in the Northern Territory. We use about 500 petajoules of gas per year in eastern Australia. So there's potentially 200-odd years supply of gas in the Northern Territory alone. It's our first major shale gas basin in Australia. We can all see what shale gas has done for the manufacturing industry in the US and jobs in the US, and I want to have those kinds of jobs here in Australia. I know Senator McMahon wants a manufacturing industry in Darwin. That's why we've taken steps to introduce a national gas reservation scheme which will see gas produced here in Australia stay in Australia and support Australian jobs and Australian manufacturing industry.

Scott Ryan (President) Share this | Link to this | Hansard source

Senator McMahon, a final supplementary question?

Sam McMahon (NT, Country Liberal Party) Share this | Link to this | Hansard source

What would be the consequences of failing to develop Australia's gas resources?

Matthew Canavan (Queensland, Liberal National Party, Minister for Resources and Northern Australia) Share this | Link to this | Hansard source

That would be bad news for our manufacturing industry. We in the Liberal-National government support manufacturing in Australia. We support workers and we support jobs—we support them in the mining sector; we support them in the manufacturing sector; we support them in the agricultural sector; we support them around the country—because we know that providing people with the opportunity to have a job to provide for their families is the best thing we can do as a government for their families and their lives. That's why we're supporting the development of these gas resources.

If we don't do that, we're going to have more decisions like the one that has happened in southern Australia with Coogee Chemicals, who have had to leave the Victorian market because of the high gas prices, because of the Victorian government's refusal to develop their own resources in their own state. They are now looking to move to Darwin, where the gas resources will be, potentially, in the future. That is great news. I met with Coogee Chemicals last week to discuss those plans and make sure they can take advantage of our resolve to use Australian gas in Australia first to provide those Australian jobs. We are committed to doing that. We will build manufacturing industry in this country. We just need state governments to get on board with this agenda too.