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AWU calls for action on Australia’s gas crisis

June 9, 2022

The AWU has welcomed tentative steps by state and federal ministers this week aimed at solving the nation’s massive energy shortage.

But it fears they will do nothing to solve the immediate crisis facing Australian manufacturers caused by massive gas price increases, especially as there is no guarantee the current price spike will be temporary.

The emergency meeting of state and federal ministers came up with a “capacity mechanism” to deal with a shortage of baseload electricity caused by generator outages. But the ministers’ “11 points of action” are unlikely to do much to deal with the current price crisis.

The AWU has long called for a domestic gas reservation scheme, warning for a decade that allowing multinational gas companies to export Australia’s gas without restriction would lead to a domestic price explosion that would force manufacturing operations to close and lead to thousands of job losses.

AWU National Secretary Daniel Walton said the government needed to follow the UK’s example and immediately prepare to implement a windfall tax on mega-profits unless affordable gas is made available to Australians.

“Right now multinational gas exporters are using the global situation to cream astronomical mega-profits from Australian gas while forcing Australian factories, smelters and plants to the wall,” Mr Walton said.

“I’ve had manufacturers telling me they are seeing their gas costs rise by as much $100,000 a day. It’s insane and it’s unsustainable. Without drastic action we’re going to see thousands of Australian manufacturing jobs lost this year.

“The government should tell the gas exporters it’s fine for them to generate record profits, but they also have to ensure some of those mega-profits are used to help the nation that owns the gas.

“At every stage in discussions the government should be holding a big stick with ‘windfall tax’ written on it.”

The federal government has also come under mounting pressure to rejig the Australian Domestic Gas Security Mechanism, the so-called “gas trigger”.

The gas trigger came into effect in 2017 in response to a forecast gas supply shortfall in the eastern domestic gas market, and gives the government the power to impose export restrictions.

The government is reported to be considering changing how it operates so it could be activated by price, not supply.

Treasurer Jim Chalmers and Resources Minister Madeleine King say the trigger is ineffective because even if it were pulled, the forced diversion of gas would not occur until January.

But others have pointed out that just threatening to pull the trigger would be enough to force the gas companies to suddenly find affordable reserves for domestic users.

“I know the federal government is engaging with the gas exporters, but history tells us that you just can’t trust them,” Mr Walton said.

“They will always have some excuse for why they can’t make some of the gas they extract available to Australians at a fair price. And they will always find a way to wiggle out of handshake agreements.

“The government’s offer to exporters needs to be fair and simple: make affordable gas available to Australian manufacturers now or face a UK-style windfall tax and we will distribute the revenue ourselves.

“If the government refuses to pick up that stick now and get tough then gas exporters will bluster and delay and factories will close en masse.”

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