Prime Minister Scott Morrison needs to pull the trigger on the Australian Domestic Gas Security Mechanism urgently and upgrade its powers or he will be sending manufacturing jobs to the wall, the Australian Workers’ Union has warned.
Gas prices have doubled in Sydney and more than tripled in Melbourne – pushing costs to unsustainable levels for Australian factories that generally run on extremely tight margins, the AWU says.
“It is unacceptable for Australian factories to be driven out of business by high gas prices when our country has more natural gas than anywhere else in the world,” noted the union’s National Secretary, Daniel Walton, in a strongly worded statement.
Don’t stomp on ‘green shoots’ of a manufacturing comeback
“It’s time for Scott Morrison to pull the Australian Domestic Gas Security Mechanism trigger. If he baulks, he’ll be stomping [on] the green shoots of Australia’s potential manufacturing comeback.”
The Federally legislated Mechanism is in place to ensure there is a sufficient supply of natural gas to meet the forecast needs of energy users within Australia. If there is a supply shortfall in the domestic market, LNG producers may be required to limit their exports or find new gas sources.
According to financial services company S&P Global, this year global gas prices have hit multi-year highs because of high carbon prices, outages and heat waves in many Western countries, as well as strong demand from China’s economic rebound.
“When gas prices temporarily dipped during the pandemic, we warned the relief had nothing to do with the goodwill of the big gas companies and everything to do with global demand,” Walton said.
PM must ‘Ignore self-interested bleating from the gas cartel’
“Now global demand is coming back, Australian factories are getting gouged once again.
“The PM should ignore the self-interested bleating from the gas cartel and step in to save Australian manufacturing and the hundreds of thousands of quality jobs it supports.
“Australian manufacturing can’t continue to be held to ransom by a small group of gas-extracting multinationals who should be grateful for access to our sovereign resources in the first place.”
The union said that for many months the Australian Competition and Consumer Commission (ACCC) had been warning that prices are too high, and the gas industry was deliberately dragging its heels.
“It’s high time for some leadership [from the Prime Minister],” it said.