Below is a detailed interview with Brisbane Radio 4BC Mornings host Gary Hardgrave, where we discuss how gutless politicians have manufactured an artificial gas shortage and crisis in East Coast Australia, which has driven up gas and electricity prices, as well as inflation and cost-of-living.
Below are key highlights from the interview.
Edited Transcript:
One of the biggest policy blunders Australia has ever done – and it annoys me to no end – is the fact that we don’t have cheap energy prices. We used to have cheap energy prices.
I live in Melbourne and we used to pay about $2.50 a gigajoule, which was one of the world’s cheapest prices, and it was probably similar in Queensland.
One of the problems that we created for ourselves is we effectively built a whole bunch of export terminals in Gladstone Queensland and we’ve started exporting about 80% of our gas, or east coast gas, without reserving any gas for domestic use.
What that’s effectively done is it’s basically meant that we’re now paying world prices for our gas when we’re effectively the Saudi Arabia of gas. It is absolutely stupid.
Whereas over in Western Australia, which has a separate gas market because they’re not linked, they were smart enough to domestically reserve their gas.
They also export most of it, but they’re paying incredibly cheap gas prices and that means that their electricity prices also are cheap because gas sets the price of electricity.
So, we on the east coast basically shot ourselves in the foot. We haven’t reserved our gas. We’re the only major exporting area of the world that doesn’t have a domestic reservation scheme.
And what it’s basically done is it’s locked us into high energy prices, which then makes us uncompetitive to manufacture.
That means we end up importing everything. And we end up paying more in household bills and businesses pay more for their energy bills.
It has a cost-of-living impact. It has an inflation impact. And this has got to be the one of the biggest own goals Australia has ever done.
It all came to us when we decided to basically link our east coast gas market to the world market without providing cheaper energy to Australians.
It’s one of the reasons why Australia’s inflation has been stubbornly high. We’ve had this hyper energy inflation over the past two years.
Yet, we are one of the world’s biggest exporters of it and we could easily have insulated ourselves. We could still have exported heaps but we could have done it in a way that we protect Australians from those price rises.
We should also copy Norway, which is a major gas and oil exporter.
Unlike us, they haven’t given it away to foreign corporations and basically they have government run energy firms that pull out the gas and oil and sell it.
They also have some private firms, but they take a big equity stake and tax them very high.
What Norway has effectively done is they’ve accumulated what’s called a sovereign wealth fund, so taxpayers have gotten all these profits from these oil and gas riches.
They’ve invested in a future fund that’s now worth around $300,000 per citizen of Norway. They are so rich from this.
By contrast, Australia is one of the world’s energy superpowers. We have more minerals than you could poke a stick at. But we didn’t do any of that stuff.
We have done the opposite in that we haven’t set up a sovereign wealth fund. We don’t tax it properly. And instead, we shoot ourselves in the foot by forcing up energy prices on Australians, which then makes us uncompetitive globally to make things and sell them.
So, we have done everything wrong that you can do in relation to energy.
We don’t tax it properly and we force ourselves to pay global prices, which is stupid.
Can you imagine a Saudi Arabian going up to fill up their car and paying $2 a litre for the petrol? Well, that’s effectively what we do for gas in Australia.
