Talk about a government making no sense, or is that nonsense?
Gas companies may be forced to cut prices for Australian manufacturers despite a recent deal with the government to ease costs, as Industry Minister Ed Husic puts gas bills back on the Albanese government’s agenda, warning powerful levers could pull producers into line.
Manufacturing companies and other big gas users are warning they cannot stay afloat under soaring energy costs. Husic accused gas companies, which supply both the local market and export LNG from Gladstone, of “milking gas prices” and demanded they offer Australian companies contracts at cut prices.
“The gas companies can either be part of team Australia or they can be part of team greed. They will make the choice,” Husic said, adding that local companies “cannot continue” under current prices.
“Australians rightly expect that an Australian resource will be available to Australian industry at a price that is not being seen on the international market.”
His demand contrasts with the recent remarks of Resources Minister Madeleine King, who cut a deal with gas producers in September that she said would put downward pressure on gas prices and remove the need to pull the trigger on export controls, contained in the Australian Domestic Gas Supply Mechanism (ADGSM).
…Husic told The Age and The Sydney Morning Herald that the government needed to “fix the ADGSM because it’s flawed legislation” and the next step would be reforming the gas producers’ code of conduct, which the former Coalition government negotiated to help local gas buyers get a fair deal compared to lucrative export contracts.
“At the moment, a lot of manufacturers see the code of conduct as one-sided and absent of any real measure on price,” he said.
“We’re not against them [gas producers] making a profit, but we are against them doing it in a way that’s putting pressure on other parts of the economy.”
Prime Minister Anthony Albanese spearheaded Labor’s election campaign push to grow the local manufacturing sector, which is currently largely dependent on gas power and struggles to compete against lower-priced international competitors.
“This is a government that’s been elected on a mandate to revitalise manufacturing. We think it’s in the national interest,” Husic said.
Too right. More power to Ed Husic as Labor descends into civil war over its capitulation to the Evil Gas Cartel at the hand of Resource Minister Mad King. Recall that the new ADGSM deal was actually worse than the old one. It allows for the Evil Gas Cartel to boost the price all the way up to export netback, which today is at $62Gj:
Since Mad King sold out domestic reservation of gas, the local price has lifted to $20.50G, more than double the average price under the old ADGSM:
Needless to say, it will keep rising as the Evil Gas Cartel rorts everything in its path using war-profiteering as its excuse. Which will result directly in a spike in power prices because gas sets the marginal cost in the National Electricity Market.
There is such a simple solution to all of the energy woes afflicting Albo’s cowards that it makes one’s head explode. All we need is to break the connection with international gas (and coal) prices using domestic reservation, export levies. or super profits taxes.
This will crash the gas (and coal) plus electricity prices and, thus, deliver time to invest in firming renewables.
As well, it will ensure that Australian manufacturing can prosper as we approach war with China, which is taking 71% of east coast gas supplies.
And it will deliver immense revenue to the budget solving that problem!
The problem is that senior ALP cowards are in thrall to the cartel (and maybe China too). Most notably Treasurer Chicken Chalmers:
A Labor source said Dr Chalmers was still “scarred” from the failed “super profits” mining tax in 2010 when he was a senior adviser to then treasurer Wayne Swan, and that he did not want to revisit the idea.
It’s not like Chicken Chalmers doesn’t know it:
Treasurer Jim Chalmers is very concerned about rising power prices amid the inflationary environment around the world, calling it the “most problematic factor in our inflation problem”.
“Firstly, we are very concerned about what is happening with power prices,” he told reporters.
“It’s a combination of what’s happening around the world, a combination of that with extreme weather and, frankly, these are the costs and consequences of a decade now of denial and delay when it comes to having a stable policy environment.
“It is going to be the most problematic aspect of our inflation problem over the course of the next six or nine months. I have had a number of conversations with Treasury and with others about it.”
This comes after ACCC chairwoman Gina Cass-Gottlieb earlier today said that household electricity bills have risen $300 since April.
This is as low as an Australian pollie can sink. Costing everybody trillions – literally trillions – to protect his own skin from a feared interest so that China can waltz in unopposed by a gutted industrial base.
Piss off Chalmers, King and Albo. Ed Husic for PM!
