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Legislative Council - Fifty-Second Parliament, Second Session (52-2)
2013-10-29 Daily Xml
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NATIONAL GAS (SOUTH AUSTRALIA) (GAS TRADING EXCHANGES) AMENDMENT BILL

Committee Stage

In committee.

Clause 1.

The Hon. A. BRESSINGTON: I rise to express my concern about what we are giving a rubber stamp of approval to in this house today, that being the sale of our natural gas supplies on the international market without securing any reserves for domestic use. Australia is the only country in the world that trades in natural gas and does not set aside a percentage of its gas for domestic use. A report from Manufacturing Australia, titled Australia's East Coast Gas Crisis: Myths vs Facts, states on page 2:

Intervention is for wacky despot nations.

The myth: Major advanced economies don't intervene in their gas markets.

The reality:

Australia is the only country in the world that allows unrestricted exports of gas.

Regulation and government intervention is a reality of gas markets internationally.

All other comparable nations—including the USA and Canada—employ some form of intervention...to ensure a functioning domestic market spreads the benefit of gas resources throughout the domestic economies.

Here in South Australia we have an opportunity now to join with Western Australia and set aside a percentage of our natural gas for domestic use, and both the opposition and the Labor Party do not believe that it is necessary. I have been contacted by CSR, and they state:

Australia is tripling its natural gas exports over the next 5 years as a result of the construction of LNG plants in Queensland. Export contracts are overcommitted and consequently producers are planning to use domestic gas to meet their obligations. This is likely to cause gas shortages in some parts of eastern Australia and is already forcing prices up in South Australia and other states. This burden will be borne by manufacturers such as CSR and residential consumers. For instance, Manufacturing Australia has estimated that higher gas prices will add over $1,000 to the cost of building a new house. This will increase as gas prices rise.

Until such time as additional supplies are available and prices return to competitive levels Governments must act to ensure that adequate supplies are available for the domestic market. If necessary and in the absence of any other measures this may require Government to introduce policies such as gas reservation.

CSR operates the PGH brick factory at Golden Grove and Viridian glass processing factories in South Australia.

In another communication, from another SA manufacturer, it was estimated that their annual gas bill would nearly double and the increase will be in excess of $13 million a year if the new contract is in line with the proposed $9 a gigalitre for gas. What they are telling me is that these new contracts they are signing are already pushing up the price of gas from $3 to $4 to $9 basically to desensitise people from the whack they are going to get once this legislation goes through on a national level.

I think we should be taking heed of what manufacturing is telling us is going to be yet another unbearable slug to their operating costs. I note that Martin Hamilton-Smith from the other place on FIVEaa the other night stated that gas has only gone up 108 per cent over the last few years unlike electricity which has gone up 180 per cent or whatever. Well, you know that 108 per cent is a pretty good increase, a pretty good whack, for businesses and domestic consumers alike. Now we are going to see another increase in the not too distant future that is going to mean that all those people who have turned to natural gas as a cheaper alternative for their heating needs in winter, their cooking needs and hot water are going to be no better off in a very short period of time if they had not have bothered to turn to gas at all.

Gas has always been sold as the cheap, clean alternative to electricity and very soon, because of this legislation, we are going to see people priced out of the gas market as well. Nobody in Labor or Liberal are batting an eyelid about this.

Clause passed.

Remaining clauses (2 to 10) and title passed.

Bill reported without amendment.

Third Reading

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Aboriginal Affairs and Reconciliation) (17:28): I move:

That this bill be now read a third time.

Bill read a third time and passed.

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