Labor proposes new measures to lower gas prices

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Opposition leader Bill Shorten has proposed a set of measures to put downward pressure on gas prices.

In a statement, Mr Shorten said the Labor government would introduce a permanent gas export control trigger that can be pulled when gas prices are too high, not just when a gas shortfall is forecast.

“At the moment, there is no requirement for the Liberals to pull their weak and ineffective gas trigger when prices are too high,” he said.

“This is putting Australian manufacturers under pressure and risking local jobs.

“We don’t want local jobs to go overseas with our gas.”

Under the plan, if gas prices are too high – based on a benchmark set by the ACCC – then the trigger can be pulled to enact export controls.

“This can include putting third party gas supplies back into the domestic market to drive down prices, rather than allowing them to flow overseas,” Mr Shorten said.

Other measures outlined in the announcement included the introduction of a National Interest Test that would apply to all new LNG export facilities or significant expansions of existing facilities.

“This would mean that domestic use will be a consideration in the approval of these projects,” Mr Shorten said.

“The ‘use it or lose it’ provisions will also be strengthened, encouraging companies to develop gas reserves rather than just sitting on them with the contracts rolling over.”

The ACCC would also be given new powers to monitor prices and crack down on anti-competitive behaviour in the gas market that causes inflated prices, and to make the market more transparent and competitive.
Labor would also establish a panel of experts, the Domestic Gas Review Board, to oversee the National Interest Test and the permanent gas export control trigger.

“We will work with manufacturers and industry on the implementation of Labor’s plan to build a sustainable gas industry, including an export industry, that operates in our national interest and puts Australian jobs and gas users first,” Mr Shorten said.

He said the Federal Government has preferred “ineffectual and unenforceable handshake agreements” with gas exporters to real action.

“Last year the Liberals set up a weak temporary trigger to control gas exports and didn’t even pull it despite Australian manufacturers still paying more for gas than the ACCC says they should be paying,” he said.

The ACCC’s December Gas Inquiry Interim Report set a benchmark price of between $6.55 a gigajoule and $9.93 a gigajoule, but Manufacturing Australia says its members are being quoted prices of between $10 and $12 a gigajoule

APPEA chief executive Dr Malcolm Roberts said the ALP’s plan would not lower gas prices.

“Like manufacturers, gas producers compete in a tough global market and understand the pressures to stay competitive,” he said.

“However, trying to regulate prices does not tackle the real problems – the rising cost of producing gas and tightening local supply in Victoria and New South Wales.

“As manufacturers themselves accept, the only effective way to put downward pressure on gas prices is creating more supply from more suppliers. That supply needs to be local supply to avoid customers paying significant shipping costs.

“APPEA can see no justification for the government to apply export controls in 2019 and certainly no justification for making controls – with a price trigger – permanent.