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ACCC – Win On Gas Prices

October 31, 2022

AWU National Secretary Dan Walton has welcomed steps by the Albanese Government to rein in the spiralling cost of Australian gas.

Treasurer Jim Chalmers’ first Federal Budget contains measures to give the ACCC powers to enforce the currently voluntary code of conduct that supposedly regulates how gas companies operate in Australia.

This was something championed by the AWU and among five steps put to the Government in a recent letter that warned that without acting on gas prices tens of thousands of manufacturing jobs could be lost in Labor’s first term.

The letter also noted the recent “heads of agreement” negotiated with gas exporters, and the existing “voluntary” code, were “thoroughly insufficient” at controlling prices.

“Over the past 10 years, we’ve been pointing out the problems that we’ve got in our mechanisms to make sure that Australians have access to our gas at affordable prices,” Mr Walton says.

We’ve got a bunch of multinational gas companies that are making extraordinary profits, windfall profits, off the back of our resources.

“And they’re doing very little to support Australian industry, Australian jobs and Australian households who are doing it so tough right now.”

Mr Walton says the AWU has been advocating the move to give the ACCC more powers to enforce a code of conduct.

“The code has been a toothless tiger over a long period, so we wanted the ACCC to have a bit more teeth to dive into it,” he says.

“Thankfully, the Treasurer announced in the Budget that that’s exactly what the Government is going to do.”

Mr Walton says the Government must act quickly, as many businesses are staring down the barrel of huge gas contract rises at the end of this year.

“Their costs are set to go up hundreds of thousands of dollars a week if they are to accept these new contracts.

“Unless we get the settings right, quickly, we’ll have a handful of multinational gas companies making extraordinary profits while the doors close on very good manufacturing businesses in this country, leading living tens of thousands, if not hundreds of thousands of workers out of work.

“So we want to sit down with the Government, the gas companies, the manufacturing industry and consumer groups, and start taking the next steps to deal with price more meaningfully.

“And we have to start the conversation immediately so that it comes into effect in the beginning of 2023.”

Mr Walton says part of the solution involves inserting a price trigger into the Australian Domestic Gas Security Mechanism so that exporters must divert more product to the domestic market when a price point is reached. At the moment the so called “gas trigger” can only be used to guarantee adequate supply.

“We have seen companies having increased gas offers presented to them, after the heads of agreement was signed, so we know that doesn’t solve the problem.

“So it’s going to mean bringing the gas companies into account, and they are not going to give up one extra cent of profit without a whole lot of squealing.

“But we are the only gas producing nation in the world – the largest gas producing nation in the world – that does not have a mechanism in place to protect Australia’s interests in business or in people’s homes.”

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