Gas prices may force plant closures, says Boral boss

The boss of building materials company Boral claims raising gas price are damaging the manufacturing sector and could force his company to close its plants.

The Australian reports that, speaking at the Macquarie Conference in Sydney yesterday, Boral chief executive Mike Kane said natural gas price rises of 20 per cent are unsustainable.

“Unless the natural gas issue is solved for the eastern states of Australia, I think manufacturing has got a used-by date on it,” he said. “I just don’t expect it to get better soon. I think all fixed-plant manufacturers in Australia are challenged, challenged by the same things.”

“You have natural gas costs rising at 20 per cent. How long can you keep on doing that before you end up shutting the doors? I’m not saying anything different to most manufacturers in Australia.”

Similar views have been expressed by other prominent manufacturing industry voices in recent times. For example, Manufacturing Australia has claimed that a lack of intervention in Australia’s gas market will see many industry jobs lost.

The lobby group says a national interest test, similar to the one in place in the United States, should be applied to the gas industry; and claims that Australia could lose 100,000 jobs and $28 billion in annual GDP if action isn’t taken.

And the Australian Industry group (Ai Group) proposes a national interest test to apply to all new gas field projects, as well as a ‘use-it-or-lose-it’ clause to speed up development.

Ai group chief executive Innes Willox said the development of new gas fields should be accompanied by the putting together of information about future projects and supply and demand.

"Then that would end up with the Treasury putting forward a recommendation to the treasurer for the field to go ahead, where that gas should be sold, and if any should be sold into the domestic market because there was a need," he said.

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