Reports of a deal between the federal government and Centre Alliance on gas prices have manufacturing bodies calling for decisive solutions.
A condition of the minor party’s approval of the government’s income tax cut package, Centre Alliance senators have lobbied for reductions in the price of gas, partly through limitations on the export of gas.
Ai Group chief executive, Innes Willox, noted that measures will have to be significant.
“A major response is needed that ensures sufficient supply, competition, scrutiny and demand management to keep gas prices at the lowest sustainable level and shrink the impact of gas prices on energy users’ final costs,” said Willox.
Details of the deal have yet to be released, but industry groups are calling for significant changes to the gas industry.
“Today’s deal between the Government and Centre Alliance is the product of commendable focus and flexibility to elevate the gas issue and address it. The agreed policies may provide critical pieces of the puzzle,” said Willox.
In a statement, Willox noted that the detail of the agreement will be indicative of the proposal’s success. Accounting for export control triggers, reservations or national interest test, will be key to reducing gas prices for businesses and consumers, according to Willox.
Willox added that demand side responses will also be needed, citing efforts to increase efficiency and fuel switching where appropriate as possible solutions.
CEO of Chemistry Australia, Samantha Read, highlighted how fundamental gas prices are to the broader economy.
“The direct and indirect contribution of manufacturing throughout the economy cannot be understated, including the significant value added to gas by the chemistry industry and other advanced manufacturing processes,” said Read.
Willox also noted how gas prices drive the success of manufacturing.
“The surge over recent years in Eastern Australian gas prices from among the lowest in the world to export parity – and beyond – has been painful for all energy users. It casts a particularly deep shadow over the future of gas intensive manufacturing,” said Willox.