Mirabile dictu: Centre Alliance demands gas reservation for tax cuts

At the New Daily:

Prime Minister Scott Morrison is under pressure to consider gas export limits to bring down power prices under a deal to secure the support of Centre Alliance for his tax cut package.

Pensioners are also part of the negotiations, amid concerns seniors get little benefit from the $158 billion package and need to see energy prices come down.

One option Centre Alliance is discussing is using the export trigger – the Australian Domestic Gas Security Mechanism (ADGSM) – a threat the government has never enacted since it was introduced two years ago.

Centre Alliance Senator Rex Patrick told The New Daily he remains concerned the value of the tax cuts package will be wiped out for low- and middle-income earners unless the PM acts on energy prices.

“We are the largest exporter of gas. We have so much gas it is unfathomable that we end up with a situation where our competitors in Asia are using our gas for a cheaper price,” he said.

Senator Patrick said Centre Alliance had raised its concerns with Finance Minister Mathias Cormann.

“One of the purposes of having the tax cut, from a government perspective, is to get additional money into the economy. I’ve spoken to [ACCC chairman] Rod Sims and if you look at gas prices, he says they are going to go up over the next couple of years,” he said.

“In SA, Victoria and Tasmania, gas prices drive the electricity price. So you might end up with a situation in two years’ time – because of our awful gas policies – where all of that money that was supposed to stimulate the economy is going to energy prices.”

Via The Australian:

One Nation leader Pauline Hanson also outlined three reforms — a new high-efficiency, low-emissions coal-fired power station, a royal commission into family law and a water-diversion scheme — that she wanted the government to address before she considered income tax cuts for medium and high-income earners.

…“Our concern focuses around rising energy costs consuming the tax return that Australians would otherwise get and leaving us back in the same position with a soft economy and less revenue,” Senator Patrick told The Australian yesterday.

Bravo Centre Alliance. Not so much Pauline though even she has the right idea about fixing energy. It’s just that her solution doesn’t do anything for ten years and by then it will actually lift energy prices to have more coal as renewables plus storage prices collapse.

The problem and solution remains unchanged. It is not about coal or renewables. It is about the gas price which sets the marginal cost of electricity and has been the driver of all utility price spikes since 2014.

The gas price must be crashed using tougher domestic reservation. The Asian gas price is still sitting at $6Gj while the local price is at $10Gj. The existing Australian Domestic Gas Reservation Mechanism (ADGSM) is supposed to benchmark local prices to the Asian price minus the cost of transport. So the local gas price should already be at $4Gj. If it were, and prices stayed there, then electricity prices would fall 30% over time on top of heavy gas discounts. Yet both the Government and gas cartel are ignoring their own agreement.

The ADGSM needs to be toughened, given a lower price and cap, and enforced. CA should demand it in return for tax cuts. Don’t budge.


  1. Problem with anything with a boiler is we Australians make them so darn expensive to build as it requires a vast army of ticket clipping project engineers to convert the US design codes (ASME and AWS) to our globally cutting edge Australian Standard pressure vessel and welding codes. Perhaps Pauline can force a productivity commission review of the relevant Australian Standards. haven’t heard boo from Pauline about turbo charged migration perhaps she can link that to tax cuts. Haven’t heard boo from Mr Latham on the issue too since he was elected either. #fakemigrationpoliciesofON

  2. Well, fvck me!

    Bubble support is about to turn nuclear. As the $10b that the gas companies steal gets put back onshore in consumer savings + manufacturer profits, PLUS the tax cuts. PLUS the interest rate cuts. PLUS the MPLOL.

    Buckle up your seatbelts.

      • I don’t have a view on this one. But it’s clearly supportive of the bubble of the government do it. And so it’s a reason for the government to do it.

    • At least it is good “bubble support” :/

      LNP could look like heroes if they actually do it, and bring down power prices – will buy the lots of credit with the populace, and help them re-write the economic narrative so that they are less burnt by the economic hospital pass they have been given.

      Best thing for Labor to do is not poison the idea by merely mentioning, such that a knee-jerk LNP chooses to then reject it ’cause Labor germs…

      • yeah smash a couple of p1ssant energy companies [= 3 column inches of tut tut], and wet nurse those poor poor banks [= a tolstoyian avalanche of FIGJAM self aggrandisement from MSM]

    • Yep, if the LNP hope to deliver a surplus they had better get onboard with gas reservations, their pollies won’t of course due to their own self interests as they just mutter some BS about sovereign risk as cover.

  3. Regrettably, on ABC RN this morning, Cormann tried to avoid mention of gas reservation, instead hinting that they would try to appease One Nation by agreeing to “consider” building a new coal fired power station.

  4. Thank God for minor parties / independents. Our media can no longer hold the government to account … these guys are our last ‘check’ in the system

    • St JacquesMEMBER

      Yep. they’re the only politicians with the guts to say the simple truth about something that really matters. but they’ll be dismissed as some looney fringe group and millions of people will swallow that bs whole.

    • yep, until some shiny meaningless baubles are offered from left field to appease them, then the govt gets what they want, mostly the way they want it, anyway

  5. It must have taken some effort for the Centre Alliance to understand what is going on. But news reports of Andrew Forrest planning to import LNG into Australia must have raised the eyebrows of anyone who knows that Queensland exports LNG.

    3 May 2019

    NSW manufacturers say relying on LNG imports or gas from the Northern Territory to satisfy the state’s needs will send them out of business