The Albanese government has hit back at LNG giants who equated a temporary cap on gas prices to nationalising the industry, with ministers dismissing the claims as shrill and laughable.
Gas companies have ramped up the rhetoric in response to the government’s regulatory intervention that passed parliament on Thursday, with the Santos chief executive, Kevin Gallagher, arguing Labor was imposing a “Soviet-style policy” that would chill investment.
The new legislation caps gas prices at $12 per gigajoule for 12 months and provides $1.5bn in federal assistance for bill relief. The legislation also encompasses changes to the gas market code, including a reasonable pricing framework and formal dispute resolution process – with binding arbitration – for the resolution of pre-contractual disputes.
The prime minister, Anthony Albanese, and frontbenchers Chris Bowen and Ed Husic on Friday shrugged off the industry’s concerns and tendentious newspaper headlines.
Albanese told reporters he understood that “some people will want extraordinary profits to continue into the future” but the government had to ensure high power prices didn’t cripple households and manufacturing businesses.
He dismissed gas industry claims about Thursday’s intervention deterring new investment. “If Australia was a good place to invest in 2021, when the average price was $9.70, it’s a pretty good place to invest in 2023, when there is a 12-month limit of $12,” he said.
The energy minister, Chris Bowen, launched a similar rebuttal, saying “that sort of shrill response is just laughable”.
“I understand chief executives’ desire to maximise their profits,” he said on Friday. “That’s their job. We have a different job. Our job is to act in the national interest … to protect Australian industries, to protect Australians.”
Albanese repeated advice on Thursday for gas companies to desist from talking down their share price. “Those businesses were profitable, will continue to be profitable and they will also gain the windfall gains that are on the international market. So I say to business don’t talk yourself down.”
Labor passed the regulatory intervention with support from the Greens and Senate kingmakers David Pocock and Jacqui Lambie Network during a one-day pre-Christmas session of parliament. The Coalition opposed the package.
Echoing the contentions of the gas industry, the opposition leader, Peter Dutton, decried the price cap intervention as “catastrophic for economic policy in this country” because the signal would chill investment.
Albanese told reporters on Friday the Coalition was in no position to throw stones given its own policy record of interventionism in the energy market.
“I do note some of the rhetoric which is out there from the opposition on this issue,” the prime minister said.
“This is the same opposition that said that gas companies and suppliers should be threatened with a big stick.
“Remember their big stick legislation they carried on about, that, in its first form, would have the power to break up companies. That’s what they threatened companies with, just a short time ago, when the now shadow treasurer was the minister.”
Dutton told Flow FM on Friday the opposition would have supported consumer rebates to lower prices if the government had been prepared to split the bill.
Dutton said the Coalition did not support a price cap “because it doesn’t work anywhere in the world”. Quoting Santos, Dutton said: “This is the stuff that you’d see in somewhere like Venezuela or in a communist market.”
In a separate radio interview, Dutton said: “We’re strongly against the market intervention, which we think is – as we’ve already seen, frankly, from the responses from the companies – going to interrupt investments and it’s going to interrupt jobs and those jobs will just go offshore and the emissions will go with them.”
