I appear to have written Peter Dutton’s gas policy, and what a Bobby Dazzler it is!
Peter Dutton says the Coalition’s gas policy forcing LNG exporters to increase onshore supply and decoupling local prices from overseas markets will reduce wholesale prices by 23%, slash industrial retail gas bills by 15% and cut 7% from household costs.
Frontier Economics modelling released by the Opposition Leader on Tuesday night claimed his national gas plan—headlined by an east-coast reservation scheme—would immediately apply downward pressure on domestic prices and “progressively lower” gas and electricity bills.
The Australian can reveal that under the gas-reservation plan, east coast producers will be slugged with a $400 million levy in the first year, which would only be rebated if they supplied up to 100 petajoules of gas into the domestic market at a price below $10.
The levy will cover the gap between a $10 domestic price and what is known as an LNG net back price, which is the price at which a Queensland LNG exporter would switch from turning gas into LNG and exporting to Japan and Korea or alternatively selling surplus gas into the domestic market.
That is an export levy by any other name. You beauty.
Alas, the policy is probably now doomed to fail as Donald Trump hands the election to Albo.
Nonetheless, this is exactly what Treasurer Jim “Chicken” Chalmers should have done the moment he was elected.
Had he done so, Australia would have cruised out of COVID with the lowest inflation in the OECD, a budget windfall of more like $15 billion, and, if coupled with lower immigration, rising living standards.
This is not just history. Because if this policy is not enacted, the only alternative is LNG imports starting later this year, and a freshly re-elected Albo will oversee a new energy shock just as the world plunges into recession.
Weak global growth may prevent it from becoming a macro-scale shock (if oil and JKM gas fall enough to offset the weak AUD), but prices will still rise as energy rebates roll off.
In national interest terms, this one policy wins the election for the LNP.
That’s how important it is.
