The federal government is running out of time to reduce soaring power bills that are already damaging businesses and adding to the cost of living pressures on households.
Husic,Chalmers,Resources Minister Madeleine King and Climate Change and Energy Minister Chris Bowen have confirmed that they are working together right now to find a solution.
While Bowen insisted last Friday at a meeting of state and territory energy ministers that “everything has to be on the table”,Chalmers said regulatory change was the government’s preference.
Speaking on ABC’sQ&A program on Thursday,Chalmers said he would not rule out either cash subsidies or tax changes,but the government was focused on trying to find regulatory changes that could bring energy prices down.
“If this situation continues to deteriorate over time,you want to have all of the options,but our preference is to do something with regulation,” he said.
“But we don’t want to rule out subsidies or tax,it may be necessary down the track. But let’s see if we can do something with regulation.”
When asked by host Stan Grant whether households will see a plan before Christmas,Chalmers said that was his intention. But he warned it would be a complex issue to solve.
“We are working on it more or less around the clock right now. And we will move on it as soon as we responsibly can,” he said.
East coast gas contract prices,which traded as low as $4 a gigajoule prior to 2015 when exports began and linked the east coast to the international market,have surged under the deepening global energy crunch,with reports of contracts for $45 a gigajoule.
However,APPEA said the average price for LNG exports for the three months to September was $19.52,while local prices averaged below $13.50.
Plastics manufacturer Qenos,which employs 500 people at its sites in Melbourne and Sydney that use natural gas to make polyethylene,on Thursday said an “urgent government led-response is now critical”,with current prices of $25 to $30 per gigajoule.
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“These east-coast gas prices are unsustainable,” Qenos chief executive Stephen Bell said.
Chalmers said on Wednesday thatgas prices had “crossed a threshold” that justified market intervention. He said the government was reviewing the industry’s voluntary code of conduct to see if it could be turned a compulsory measure to cut prices.
“Some of the supply work has been done,the work that we need to do now is around can we strengthen the code of conduct,can we make it mandatory,and can we make it more focused on price.”
While it could take several months to draw up a new compulsory code of conduct and establish a competition watchdog to monitor compliance,changes to the gas trigger laws could be introduced relatively quickly.
Resources Minister Madeleine King said last month the government had changed the regulations to allow the supply mechanism to be triggered four times a year and a price mechanism could potentially be inserted under the same process.
Energy Users Association of Australia chief executive Andrew Richards,who represents leading manufacturers including fertiliser giant Incitec Pivot and building materials supplier Brickworks,said the gas trigger should be reformed to prohibit companies from exporting gas if gas contracts were not being offered below $10 a gigajoule.
Queensland gas exporters signed aseparate deal with the federal government in September guaranteeing to increase the volume of supply to the local market,to be made available over and above existing long-term contracts with overseas buyers such as Japan and Korea.
Richards said if the gas companies honoured this deal there would be more than enough for the local market,and no risk that gas companies would have to break international supply contracts.