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Australians will be promised a boost to gas supply in a Labor move to ease pressure on energy prices, setting up a test for the Coalition and the Greens to back the federal changes or be blamed for deepening the nation’s cost-of-living crisis.
The federal government will reveal two energy deals to fix a looming gas shortage under an industry regime the Greens are seeking to block, raising the stakes in a Senate vote on Monday on the country’s reliance on fossil fuels.
Energy Minister Chris Bowen has struck deals to divert gas to the domestic market.
In a spate of domestic policy moves, the government is also poised to announce a deal to increase environmental flows in the Murray-Darling river system, claim a $250 million consumer saving from its changes to medicine prescriptions and unveil draft law to reform the Reserve Bank.
Parliament meets on Monday for the final sitting fortnight of the year with Prime Minister Anthony Albanese seeking a focus on domestic policy after arguments with Opposition Leader Peter Dutton over China, the release of detainees from indefinite detention and the response to conflict in the Middle East.
With retail energy prices rising, the government has been under pressure to boost gas supplies using the code it introduced this year to fix prices at $12 per gigajoule and force producers to meet local demand, in tandem with separate restrictions on coal.
Energy Minister Chris Bowen has struck deals with gas exporters Senex and Australia Pacific LNG to divert 300 petajoules to the domestic market over the next six years, with both commitments starting this month.
The gas will be supplied under enforceable undertakings that exempt Senex and APLNG from the price cap but expose them to action by the Australian Competition and Consumer Commission if they do not meet their pledges.
With about 140 petajoules promised by the end of 2027 under the new deals, the outcome initially adds 35 petajoules to the domestic market on average every year. The ACCC estimates household, commercial and industrial demand adds up to 447 petajoules each year.
The Greens are seeking to halt the gas code by moving a motion in the Senate to disallow the regulations Bowen put in place in July, which will force Labor to rely on the Coalition to keep the code in place. The Coalition voted against the legislation to set up the regime last December, making the disallowance motion on the code another test of its stance.
Greens treasury spokesperson Nick McKim has welcomed measures to cut prices but accused the government of encouraging new gas fields to be developed under the code.
While Labor is at odds with the Greens on the gas code, Environment Minister Tanya Plibersek is poised to announce an agreement with the Greens on water reform on Monday, to ensure laws can be amended to meet a December 31 deadline for changes to rules on water buybacks in the Murray-Darling river system.
Labor promised in 2012 to recover water and boost flows by 3200 gigalitres – more than six times the volume of Sydney Harbour – but is due to fall short of that target by 750 gigalitres, including 450 gigalitres that was supposed to come from federal water buybacks.
Greens environment spokesperson Sarah Hanson-Young has called on Plibersek to insert a legally enforceable guarantee in the law to recover the water, going further than the wording of the draft law, which says the government will use its “best endeavours” to do so.
The likely compromise on the 450 gigalitres will clear the way for the passage of the Murray-Darling law this fortnight, but will be fiercely opposed by Nationals leader David Littleproud and his colleagues after years of warnings from regional communities about the damage to their communities from water buybacks.
With many households feeling pressure from inflation and rising interest rates, Health Minister Mark Butler will point to falling costs for pharmaceutical prescriptions to assure voters Labor has a solution on the cost of living.
Health Minister Mark Butler will point to falling prescription prices as a sign of progress on living costs.Credit: Alex Ellinghausen
Butler will release figures on Monday claiming consumers will see savings of $250 million by the end of this year as a result of the government’s new rules on 60-day prescriptions and a cut to the maximum cost of a prescription on the Pharmaceutical Benefits Scheme from $42.50 to $30.
Treasurer Jim Chalmers will introduce a draft law to give the Reserve Bank greater independence and Industry Minister Ed Husic will launch a $392 million scheme to help small and medium employers expand their sales by commercialising their products.
Dutton accused the government of leaving households with higher costs and imposing climate change policies that would shut down reliable power supplies from fossil fuels, using a speech to Liberal colleagues in Sydney on Saturday to take aim at Bowen for his energy policies.
“We know that the energy regulator is now talking about a situation where there could be disruption to supply over the course of this summer,” Dutton said. “So in the 21st century, in our country, we’re de-industrialising.”
Bowen and Resources Minister Madeleine King will announce the gas deals on Monday with a claim that their policies are helping to “keep gas prices low” and will “keep a lid on prices” by increasing supply.
The government is basing its claims on estimates that the wholesale gas price is currently $12.29 per gigajoule, down from $31.76 at the time of the last election.
Energy Consumers Australia estimates the annual electricity bill for small and medium employers rose by 18 per cent over the year to April 2023, while gas bills for similar employers rose 22 per cent.
Wholesale spot electricity prices across the east coast grid averaged $63 per megawatt hour in the September quarter, a 71 per cent fall from the same time last year, according to the Australian Energy Market Operator.
Bowen has pointed to the falling wholesale price to assure voters Labor is acting on the cost of living and that the electricity sector’s default market offer will cut costs for households when it is released in February.
“I know people don’t pay wholesale prices, but they do flow through to retail prices in some form down the track,” he told the ABC’s Insiders program, adding this meant the default market offer would be “substantially less” than seen last year.
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