Labor now proposes to extend its cap on wholesale gas prices but may grant exemptions in a bid to prevent gas investment stalling.
Tax hit looms for producers
“We haven’t finalised a view on that but ... we want to make sure that taxpayers are getting the right sort of return through that measure,” Ms Gallagher told ABC’sLabor is still to decide whether to pursue the potential changes in “this budget or this year,“ she added. “We’ll conclude our discussions on that in the short term.”
Samantha McCulloch, head of the gas industry lobby group APPEA, said the mandatory code of conduct “must recognise the importance of gas in a cleaner energy future, and the need to ensure settings which enable investment in new supply to avoid forecast shortfalls and put downward pressure on prices”.
But Credit Suisse’s Mr Kavonic said that a policy based on exemptions would enable a high degree of government discretion that can be used to cut deals with select industry players on a range of issues, and could see some local players in a more advantaged position compared to the Queensland LNG players.“As Australia embarks upon effectively permanent price-fixing policy for gas, the result will be more interventions, shortages and raising energy security risks in the years ahead,” he said.
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