Friday, September 19, 2014

We Need Action on Gas to Help Manufacturing and Consumers

I support the campaign of the Australian Workers Union (AWU) to establish a gas reserve in Australia in order to reduce costs for manufacturing and consumers.

According to the Consumer Utilities Advocacy Centre, in Victoria gas bills will surge by 24 per cent by 2015, adding about $300 to the average $1200 yearly gas bill. It is claimed that reserving gas would be an encroachment on the free market.

Yet the home of the free market, the United States, will not allow LNG exports unless gas producers ensure supply and affordable prices for US industry. This has delivered US gas prices of around $2 per gigajoule. There is no policy outside Western Australia to ensure our gas resources are prioritised to supply Australian industry and households. Every other large gas producing country puts measures in place to ensure domestic consumers benefit from, rather than suffer from, their natural wealth.

The Dom Gas Alliance says a 15% domestic gas reservation policy would be in Australia’s national interest which is similar to the proposal of the AWU, and which is also backed by the ACTU. Ged Kearney, ACTU President, believes Australian workers have an enormous amount to lose from projected gas price rises from both an employment, and a cost of living, perspective.

Manufacturing has been struggling for years under the high Australian dollar with the expected spike in gas prices set to exacerbate this. Deloitte Access Economics estimates that a doubling of wholesale prices to $8 to $9 gigajoule, or even higher to $10 to $12, will destroy $118 billion of value in manufacturing over the next seven years and cost 14,600 jobs.
The fact that Australia is now increasing its gas production should be a benefit for gas customers and manufacturers, not a hardship. Consumers are already struggling under the weight of electricity bills which have more than doubled in 10 years. Gas bills should not be allowed to do the same. Australia's gas reserves should be used not only to generate export income but also to help build domestic industry. Securing access to some of Australia's energy resources in this way would help retain and create jobs.

1 comment:

  1. Australians are being short-changed and gouged by gas prices. Most of the companies are multinationals and the gas is an Australian product, yet we are being extorted to paying the prices they want to charge! There needs to be reserves for Australians, so that our own LNG is affordable and available. Australia is one of the most expensive countries in the world, for utilities, such as water, energy and housing. It's unsustainable. A free market economy might be "good" for the economy, but first and foremost it must serve the interests of the people! Naturally, coal seam gas mining companies will claim there is a "shortage" of gas, to push for access to our land.
    Like our so-called skills shortages, our tertiary educational institutions are being outsourced as an export industry, but our government contradictorily claims we have skills shortages! It's more profitable to sell our built and natural resources to overseas customers that to prioritise it for our own population.