Topics: Labor’s rushed energy legislation to cause long-term pain; Bipartisan delegation to Pacific;
16 December 2022
Laura Jayes: Returning to one of our top stories. Australia’s gas giants have lashed out at the Albanese Government for its decision to intervene in the market and introduce temporary caps. Executives have likened the policy to those seen in socialist democracies. The Opposition is claiming the long-term implications will see household wallets hit even harder. Joining me live now is the Shadow Foreign Affairs Minister, Simon Birmingham. Simon Birmingham, these companies still make huge profits. Are they crying poor here? What is their complaint? Is it justified?
Simon Birmingham: Well, the complaint is that this is going to inject huge uncertainty in terms of the investment environment for bringing these types of big gas projects onto the market in the future. The reality is this isn’t just a short-term intervention the government has put into law. They’ve put in place powers that provide for ongoing frameworks that generate huge uncertainty for these businesses. And so, what that means is that that uncertainty that creates investor risk, investor uncertainty, means that the high likelihood is that the type of pricing and shortage problems we’ve got today will only be made worse in the future because of the Albanese Government’s new laws.
Laura Jayes: Okay. What should have happened then, in your view?
Simon Birmingham: Well, the Government should have acted sooner. It shouldn’t have dragged its heels, done nothing in its budget, then faffed around until the week before Christmas and rushed through legislation that indeed nobody had seen in any detail until less than 24 hours before it was presented to the Parliament. It should have worked with the gas industry to make sure that it could urgently get more supply into the domestic market in the here and now to drive down spot prices. And it should have reinstated funding for the type of medium- and longer-term supply supports that are necessary and were in place under the previous Coalition government to help get more gas into the market, into the future so we can have enough to supply the domestic economy and to supply our export markets too.
Laura Jayes: Okay. If it’s all supply side, how long does it take to fully turn the tap on, if you like, and get more gas into the market?
Simon Birmingham: We demonstrated the last time gas prices spiked, that we were able to get a quick turnaround by working with the gas companies, by putting pressure on them. Absolutely. But by working with them to get more short-term supply into that spot market in particular. And that should have been possible. The ACCC working with the Government, working with the gas companies to be able to make sure they are diverting every possible kilojoule into the market to help deliver downward pressure on those prices whilst also supporting those medium- and longer-term ventures. It’s not just about those medium- and long-term issues. I know people need shorter term relief. That could have been done by a more cooperative approach rather than the demonising we’ve seen from the government of the industry. That generates a lot of wealth for this country and supports a lot of jobs.
Laura Jayes: But it doesn’t really make sense. Don’t you think the gas companies would have got more supply into the market as soon as possible to avoid this price cap and the reasonable price mechanism? It seems like that they would have done anything to avoid what’s happening now, given the words of Kevin Gallagher from Santos.
Simon Birmingham: Well, L.J, it feels like the government was more intent on having a fight with the gas companies and wanting to sort of make this about, you know, having a fight against multinationals, against big gas. All of the types of things that we’ve seen the government roll out in terms of the rhetoric from Chris Bowen and Ed Husic and others, rather than actually working with them on effective solutions. It may have, as I say, required some degree of ACCC relief for approvals processes for the gas companies to work together in terms of how they could bring extra supply back into the domestic market. That type of cooperation could have been achieved, but clearly the Government wanted to have the fight and the big political victory as they’re trying to claim it. But the problem is that probably made this problem worse for the medium to long term as a result of the actions they’ve taken this week.
Laura Jayes: Okay. You’ve just returned from the Pacific. It was a bipartisan trip, I think. Certainly notable. What has that trip changed or what will it change?
Simon Birmingham: Laura, just off the plane in the last couple of hours. And a very powerful message I think was sent by having Foreign Minister Penny Wong, Pacific Minister Pat Conroy, Shadow Pacific Minister Michael McCormack and myself travelling across three different Pacific Island nations and making clear to all of them that Australia’s support and partnership with them as fellow island nations of the Pacific is something that crosses across party lines in Australia that is not subject to domestic politics, but is something where we stand rock solid with them. We’re able to canvass a range of different things from security cooperation. Obviously the signing of the security treaty between Australia and Vanuatu that was first announced by Malcolm Turnbull was negotiated during the Morrison Government in terms of the terms and texts and now we’ve seen the signing of it by the Albanese Government. A very vivid demonstration of the continuity of policy there, but in a range of other areas in terms of our labour mobility schemes, our cooperation in other fields of development assistance and infrastructure assistance and indeed international issues such as climate change.
Laura Jayes: This is my last show of the year, so I just want to take the opportunity to thank you for being one of our regular guests on the program. It’s been quite a year for politics. It’s kind of seen a march of millennial voters, and it’s been quite a year for the right side of politics as well. I’ve also noted how many people are saying how exhausted they are after getting back freedom after COVID. How do you reflect on the year, Senator?
Simon Birmingham: L.J, It’s been a tough year. It’s been a tough few years. But nobody puts us into these jobs for life to be easy in that sense. You know, we’re there to do hard jobs. It was tough during COVID. I hope as time goes by that notwithstanding the election loss this year, people can look back on what Australia achieved and how well we got through that period of time relative to other nations with pride and with a sense that the previous government achieved some significant things. But I’m looking forward to the end of this year to crashing by the pool, to hitting the beach, to having a few beers. And if there’s one tiny silver lining to the opposition compared with government, it’s I expect my phone to ring less this Christmas and New Year than it has for any of the previous few.
Laura Jayes: Okay, [laughs] I’m sure you are looking forward to that. Merry Christmas to you and your family. Adelaide Christmas’ are always pretty special, so enjoy that. Thanks so much.
Simon Birmingham: Thanks L.J and to you and yours.