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Monday, 20 March 2017
Page: 1371

Energy


Senator McKENZIE (Victoria) (14:36): My question is to the Minister for Resources and Northern Australia, Senator Canavan. I note that the minister recently travelled with me through regional Victoria to listen to local business concerns about rising energy prices. We heard that many businesses are facing gas prices more than double those of only a year ago. Can the minister advise what the government is doing in response to these concerns and their impact on local jobs in regional Victoria?


Senator CANAVAN (QueenslandMinister for Resources and Northern Australia) (14:36): I thank Senator McKenzie for her question and thank her for taking me around her beautiful part of the world—regional Victoria—along with the member for Murray, Mr Damian Drum, as well. I did visit Victoria because of concerns that have been raised with me and the senator from Victoria about rising electricity prices and gas prices. We heard a very consistent message from businesses throughout regional Victoria that they are facing gas price increases to almost double what they paid a year or two ago and, likewise, increases in electricity prices as well. I am very concerned about those impacts because they potentially impact on jobs and on the abilities of businesses to stay open, and that is why the government is acting on this.

Principally, it is the responsibility of states and territories to develop gas resources in this country. But, nonetheless, because of that impact potentially on jobs the government and the Prime Minister last week convened a meeting of industry executives to talk to them about how we can get more gas flowing in this country. I am happy to report that the Prime Minister made it very clear to the gas industry that we expect our resources to be used for our nation's interest and to create jobs in this country. That was the clear message received by the industry. In fairness to the industry, they accept that. They accept that to develop our nation and our people's resources they should be providing that security to Australia.

From that meeting, we have received a commitment that gas companies will provide gas in times of peak demand to bring down the prices in our electricity market, that they will direct more gas onto the domestic market in response to market conditions and that we will create greater transparency in the marketplace through the ACCC and the Burdekin review. We expect that if these commitments are met there will be downward pressure on prices. The Prime Minister made clear that if we do not see those things happening we will seek to take further action consistent with our powers at the Commonwealth level to ensure we have jobs in this country and development of the manufacturing sector. (Time expired)

The PRESIDENT: Senator McKenzie, a supplementary question.



Senator McKENZIE (Victoria) (14:38): Can the minister explain how Victoria can ensure that businesses have access to affordable and reliable gas supplies over the long term?


Senator CANAVAN (QueenslandMinister for Resources and Northern Australia) (14:38): Thanks, Senator McKenzie, for your question. Victoria has had a lucky history in our country from being located among some of our nation's best and cheapest gas resources, including those in the Bass Strait. However, some of those are declining at the moment and Victoria will need to find new gas resources if it wants to maintain its strength in its manufacturing sector. It should be lucky in the future, too, because Geoscience Australia tell us that there are potentially more than 20 trillion cubic feet of gas onshore in Victoria, enough to supply the east coast of Australia for 40 years.

Unfortunately, they are not making their own luck in Victoria at the moment because in the last fortnight the Victorian government has banned the development of unconventional gas and temporarily put in place a moratorium on conventional gas development, a type of gas development that has been used safely for more than 100 years in this country. That is going to put at risk Victoria's economic development. It is going to put at risk jobs in Victoria. I hope the Victorian government sees sense and allows the responsible development of gas in this country to create jobs. (Time expired)

The PRESIDENT: Senator McKenzie, a final supplementary question.



Senator McKENZIE (Victoria) (14:39): In light of the South Australian government's recent announcement that it will provide a percentage of royalties to landowners, can the minister outline the federal government's position on whether landowners should receive a greater share of the wealth extracted from their properties?


Senator CANAVAN (QueenslandMinister for Resources and Northern Australia) (14:40): As I indicated in my answer to the previous question, we need to develop more of our gas reserves and resources in this country. We need to develop those in Victoria and other places in our nation. To do so, we will need the support of local communities and those affected by gas development. If we do not have their support, it is going to be very difficult to do the development.

So we welcome the decision of the South Australian government to put a percentage of royalties towards landowners to help build that support. We think this is what should happen. We should have more governments act in this direction. Obviously these are matters for the state governments, but the Victorian government's approach right now is unsustainable. The Victorian government minister said last week that she wants Queensland to send their gas all the way down to Victoria to help them out of a jam. She is asking Queensland to do gas developments that she herself has banned in Victoria. It is complete hypocrisy, it is unsustainable and it will not solve Victoria's energy needs because it is too far from the manufacturing needs of Victoria.