Does the gas reservation plan go far enough?

0:00Well, the Urban Easy Government has unveiled a draft plan in a bid to address domestic gas supply issues. So the gas reservation bill 2026 will establish Australia's first National Domestic Gas Reservations Scheme. It delivers on our government's commitment to secure gas supply for Australians putting down pressure on prices and requiring gas exporters to supply a portion of the gas they produce for the domestic market. The policy goals are simple. If you want to export Australian gas, you must reserve up to 20% of those exports to ensure a modest oversupply for Australia to put down pressure on prices. That's the Federal Minister for Climate Change and Energy Chris Bowen speaking yesterday. Well, Labor has backed away from automatically requiring LNG exporters to reserve 20% of their exports for Australians, instead making them reserve up to 20%. Richard Dennis is the Co-Chief Executive Officer of the Australia Institute and joins me

1:01now. Richard, welcome to breakfast. Good morning. What do you make of the policy unveiled yesterday? Oh, look, unfortunately, we've kicked it into the long grass yet again. For 15 years now Australians have seen an enormous amount of Australian gas exported overseas, half of it, with no royalties paid, no petroleum resource rent tax paid, half of it given away for free. And yet again, we've been told that the detail is coming. We'll see something introduced eventually that will put some downward pressure on prices. This is not our first rodeo. Unfortunately, the previous government had a big stick policy, which was going to, we're going to hit the gas industry with the big stick as the government called it, if prices weren't falling. It didn't work. We started out with this reservation policy of 20% and we're in a rush to get it through.

2:02Now it's up to 20%. And we've kicked it into the long grass, going to have to consult for a bit longer. And of course, the reality is, if this reservation policy were introduced tomorrow, it wouldn't collect a sentence revenue, it wouldn't collect a sentence revenue, and all we get it being told is it'll put downward pressure on prices. Not how much prices will fall, they just might be a bit lower. But the Gretton Institute's Tony Wood told the Fin review that despite the changes the scheme in his view would still help to maintain some constraints on prices and that we should get on with it, it is having some scheme better than having no scheme at all. Yeah, yes it is. But wouldn't it be good if we had a good scheme? Wouldn't it be good if we had low prices? Wouldn't it be good if we did it soon? Let's tidy this up. When the world price of oil goes up, the Saudi still rich. When the world price of gas goes up, the Qataris and Norwegians feel rich. And when the world price of gas goes up Australians feel poor.

3:02Australians are told that our gas bills will rise, our electricity bills will rise, our manufacturing industry will pay higher prices. And the overwhelmingly foreign owned gas industry makes enormous windfall profits off the back of the wall. So yeah, look, to be honest, it's hard to imagine a worse position than the one there is we are in. So of course something is better than nothing. But why can't Australia, the third biggest fossil fuel exporter in the world, why don't Australians feel rich when the world price of our export saws? And the answer is 15 years of people saying, I've got a complicated scheme. It's going to work in the future. Stick with me for another year or three while we saw it at the details. Yesterday here in Parliament in Canberra we saw a rare split of the Greens over a bill for a new carbon credits method for forestry. You've sided with the senators who crossed the floor. Why? Well, it relates to gas, of course.

4:03In Australia, despite all the talk about climate change, the Aberdeez, the government continues to approve enormous new gas projects. The North West Shelf project was approved straight after the last election. And in order to square the circle of pretending we're trying to tackle climate change as fast as we can while actually approving gas expansion as fast as we can, we have to sell all these dodgy carbon offsets. Yesterday the Parliament created a new method to create even more offsets. Of course, increasing the supply of offsets will push the price of offsets down. And of course, all of this was done under the dubious claim that if we didn't approve more offsets, then we wouldn't be able to afford to have a new koala national park to stop koalas going extinct. So unfortunately, the Greens felt so much pressure from the state and federal labour government to save koalas that they agreed to actually cause more climate change.

5:07But yes, this is where is something better than nothing gets us in Australia. So instead of actually having a debate about why can't the gas industry pay tax, why can't we force the gas industry to actually provide gas to Australians, the Parliament's actually providing even more carbon offsets to the gas export industry. It was a shameful day. Very briefly, the climate change and energy minister Chris Bowen was asked yesterday about changing the 20% contribution. This is on the gas issue to which he replied, quote, there's no point in reserving gas that Australians don't need. What do you think? Well, this is why I think that the minister should take the ACT use advice, put a 25% tax on gas exports, collect around $17 billion a year. The gas export tax would do one very important thing, apart from collecting a lot of revenue. It would mean that the gas industry could avoid paying the export tax by supplying more

6:07gas to Australians. So a gas export tax would instantly collect revenue and instantly push prices down and instantly push supply to Australians are. But instead of doing that, we're going to talk for years about exactly how many molecules of gas full Australians need. The minister doesn't know. Nobody knows, but what we know is a gas tax would work in a reservation policy, probably on. It just finally, the Australia Institute says it has no formal political or commercial affiliations, but given that you're consistently aligning with the Greens and further to the left of their leadership on issues such as this, do you accept the proposition that the Australia Institute is a supporter of the Greens? Look, the Australia Institute has criticised any political party with a greed with and any political party we've supported for over 30 years. What a strange question. The Greens made what I think was an appalling decision yesterday. I've spent the last couple of months explaining the people why I thought it was a bad idea.

7:09I've, I've, I'm on here talking about what about idea it is this morning. But to be clear, when the Greens do a good thing, we support it. We supported Labour's, we supported Labour's stage three tax cuts. When they did them very loudly, they were, they were good. And indeed, when Scott Morrison was prime minister, we backed in changes they made to the pension loan scheme and indeed were very supportive of their spending during COVID. So what a strange question to get asked. But yeah, no, we, we, we're a think tank. We barrack for ideas, not for political parties. And unlike most organisations, we, we call it as we say it. We criticise anybody. We praise anybody. We, we back our research. Thank you, Dennis. Thank you for joining me this morning. Thank you.