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Time to step on the gas to save Australian manufacturing jobs

March 25, 2021

The Australian Workers’ Union says stalled progress on the Morrison Government’s gas industry code of conduct will see east coast energy prices soar and more Australian manufacturing jobs lost.

Australian Competition and Consumer Commission chairman Rod Simms told a conference in Sydney he was stunned gas producers had failed to meet the February deadline for the voluntary code, which is supposed to bring down prices.

“Amazingly, and I am absolutely stunned by this, we are now at the end of March and users have yet to see a copy of the code,” Mr Sims said.

Dan Walton, AWU National Secretary, condemned the industry’s stonewalling and the government’s use of a voluntary code and said continued high gas prices would see more Australian manufacturers close and more Australian jobs lost.

“Unsurprisingly the government’s weakness has emboldened the industry to play games and stall any meaningful action. Time and time again we have been promised action on gas prices, time and time again we have seen zero result,” Mr Walton said.

“Australia has the most ridiculous situation where we are the world’s biggest exporter of gas with the world’s highest prices. It’s crazy.”

Continued lack of action means Victoria and NSW face a gas supply crisis and price hikes within three years unless additional gas developments are ramped up. Queensland is also in danger of supply not meeting demand by 2026.

“This has been a slow-motion train crash,” Mr Walton said. “We sounded the alarm on this a decade ago. It’s played out exactly as we predicted. That doesn’t make us pleased – being right means nothing if it means people lose their jobs and industries close.

“Nothing will change until hard meaningful action is taken. That means some kind of guaranteed supply for Australian users at a reasonable price.”

The voluntary code was part of the Morrison Government’s “gas-fired” economic recovery plan.

But Mr Walton said as well as the stalled code of conduct there had been no progress on gas supply targets, and little movement on a moted national gas infrastructure plan.

“We heard there was going to be pipeline regulations reform but there have only been minor and irrelevant changes to the National Gas Rules which govern them,” he said.

“We were promised a national power to reserve gas for domestic use – which every other gas exporting nation has – but there are still no concrete options, despite the promise that these would be ready by the end of last year.”

“What we have is a voluntary code that gas users haven’t even seen. It’s a joke.”

At the heart of the stand-off is the insistence of gas buyers that any code includes a reference to international prices for gas, as they battle to secure more affordable gas prices.

But producers have baulked on any such price reference, which they claim could result in tying them to price benchmarks that aren’t relevant to the Australian market and costs of production here.

The ACCC’s Mr Sims said stronger measures must be taken: “Our gas inquiry continues to find the gas market is not a functional, competitive market.”

The AWU is calling on the government to act immediately to enforce the work of the ACCC. Government action will mean fair and reasonable prices for major users of gas.

Sign our petition and support our campaign for a national Gas reservation scheme today. 

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