As usual, a day after the Parliament heard sense from policy advocates, the gas cartel was unleashed.
Producers and industry groups warned that higher export levies could deter investment, reduce domestic supply, and strain international trade relationships.
The Queensland Resources Council argued that, amid global energy uncertainty and supply shocks linked to geopolitical tensions, stable and “investment-grade” policy settings are critical for both economic and national security.
It is true that minimal royalties and virtually no taxes are ideal for investment. But that is hardly a comprehensive analysis.
Shell Australia echoed these concerns, suggesting that increased taxes could flow through to higher domestic gas prices.
That is true. The poor design of the 25% export levy still creates an incentive to starve the local market of gas. Given the $12Gj price cap largely benchmarks the price, such a move could mean an immediate rise in local prices to $15Gj, which is totally unacceptable. It would then require additional ill-formed policy to contain the local price.
This is why I prefer the much tougher model of a 100% export levy above an agreed-upon price threshold.
The cartel has done more than enough damage to deserve such an outcome, playing a key role in:
- The shutdown of six of our fuel refineries.
- Throwing the car industry into the sea.
- Ending plastics manufacturing.
- Gutting urea production.
In short, we can’t fuel, feed, build or get around without somebody else’s help, thanks to LNG exports.
This policy has made us the most helpless nation on earth in return for virtually nothing.
The gas tax reform goes far beyond a fair return for our resources.
It is the key foundation stone in preparing the nation for the martial, multipolar world that is upon us.
Without cheap gas, we will never rebuild our military-industrial base, and we might as well hand Australia to China today.
