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.