Labor is ratcheting up pressure on the gas industry as it contemplates a workable policy mechanism to lower prices.
The energy minister, Chris Bowen, on Tuesday night ruled out intervening in the market with price caps after the treasurer, Jim Chalmers, confirmed the government was revisiting the problem of gas prices given soaring energy costs are driving domestic inflation and punching a hole in household budgets.
The industry minister, Ed Husic, on Wednesday ramped up his rhetoric, arguing gas companies are “sucking up an Australian resource and selling it at phenomenal prices overseas, and they’re doing so in such a way that is putting pressure on manufacturers and households in this country”.
Husic told Sky News gas producers could “either do the right thing by the country, or they can continue to be greedy”.
The Australian Workers Union national secretary, Daniel Walton, meanwhile rounded on the resources minister, Madeline King, who signed a new heads of agreement with the three big LNG exporters – Santos’s GLNG plant, the ConocoPhillips-led APLNG group and Shell’s QGC operations – in late September.
“It’s infuriating that a Labor minister could champion the same exact same kind of dud handshake agreement struck by the Turnbull government, especially when the Australian Competition and Consumer Commission has since told us that agreement wasn’t worth the paper it was written on,” Walton said on Wednesday.
“The government has a choice: defend the insane super profits that gas exporters are making from the Ukraine war or defend the future of Australian manufacturing and the hundreds of thousands of jobs it supports,” he said.
“I can’t believe this is apparently a headscratcher for Labor.”
Walton noted Labor’s policy platform contained specific commitments to use-it-or-lose-it conditions for offshore gas resources, a price trigger, and domestic reservation policies where necessary, so it was time for the Albanese government to “walk the walk”.
A spokesperson for King said Walton had every right to express a view, but the new heads of agreement was “a significant improvement on the deal done by the previous government”.
“It will provide an estimated additional 157 petajoules of gas to the east coast gas market in 2023,” King’s spokesperson said. “That is almost three times the shortfall forecast by the ACCC earlier this year”.
The spokesperson said the government understood the domestic gas market was not “delivering the kind of outcomes we want to see” and as a consequence, the minister for resources and energy, the industry minister, energy minister and treasurer were “working closely together to see what else can be done beyond the near-term updating of the heads of agreement”.
Asked on the ABC whether or not the government would contemplate price caps to ease the pain for households and businesses, Bowen said: “I’m not contemplating the sorts of things that you are proposing”.
“What I am saying is that we will continue to work with the operator and with the regulators to ensure that our regulatory regime is as fit for purpose as is possible against this challenging backdrop”.
Husic has pointed to potential reform of the industry code of conduct to try to achieve price reductions without resorting to price caps.
Chalmers told reporters before departing to the United States that it would be difficult to shield consumers from the energy price spiral in the October budget without adding to inflationary pressure.
“When it comes to support for the cost of living, we need to be extremely cautious here that any cost-of-living support that we provide isn’t counterproductive,” he said.
“We want to make sure that cost of living support that we provide doesn’t make the already hard job of the independent Reserve Bank even harder.”
But the treasurer confirmed the government had gone back to the drawing board “to see what else can be done beyond the near-term updating of the heads of agreement that minister King did with the companies”.
