From Centre Alliance:
After lengthy negotiations with the Government to address concerns that Centre Alliance has about rising energy costs, and particularly the high electricity costs in South Australia, Centre Alliance has agreed to support the Government’s personal tax cuts legislation.
Supporting the tax cuts will reward Australian taxpayers and provide a stimulus to the economy that almost all economists have called for, including the Reserve Bank Governor.
Centre Alliance has worked with the Government on both short and long term reforms to deal with gas market concerns.
The full package of reforms will be announced by Government in the coming weeks but will include changes to the Australian Domestic Gas Security Mechanism (ADGSM) to deal with current pricing, market transparency measures, measures to deal with the monopoly nature of East Coast gas pipelines and longer-term measures to ensure future gas projects deliver surplus supply to the Australian market.
Centre Alliance will not support the splitting off of stage three, noting that the Government have steadfastly refused to split the bill and that any split will be rejected in the lower house.
In respect of the negotiations on gas, the following is noted:
- Energy is used in every sector of the economy. Uncompetitive energy costs mean an uncompetitive economy.
- 51% of SA’s electricity is generated from gas. Gas prices set the electricity price in SA, Victoria and Tasmania.
- ACCC Chairman, Rod Sims, has forecast that gas prices will rise.
- Centre Alliance went to the election with a promise to reduce energy prices.
- In 2013-14, Australians paid $3-$4 per GJ for gas.
- Six LNG trains have since been built in Gladstone QLD to facilitate export of gas.
- Production of gas in Australia has tripled.
- In 2017, SA couldn’t even get gas offers, let alone a good price.
- Centre Alliance negotiated the ADGSM with the Government to ensure a minimum domestic supply. The ADGSM has worked to ensure there is enough supply, but has not dealt with price.
- Despite a tripling of production, the price of gas in Australia has tripled (to around $9 per GJ).
- Australians are now paying 20% more for our gas than consumers in the Asian market are paying for our gas.
- Many companies are deferring investment, and in some cases not investing, in Australia because of our high gas prices.
- There has been a market failure and Government must intervene.
Sounds good. Need more detail, especially on the boosting of the ADGSM.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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