Treasury deputy secretary Luke Yeaman,reading a statement from secretary Steven Kennedy to a Senate estimates committee on Tuesday,said war-driven price shocks “bring into scope government intervention”,arguing government should look to reign in prices.
However,he warned,it must be mindful of not driving up inflation,which would be caused by direct cash subsidies to bill payers.
“Interventions that directly address the higher domestic thermal coal and gas prices are more likely to be optimal,” Yeaman said.
He said energy companies were reaping gains “well beyond the usual bounds of investment and profit cycles”,threatening many businesses’ viability and hitting hardest lower income households.
Chalmerssaid last week the government hoped to have a solution to rein in gas prices before the new year and “our preference is to do something with regulation”.
Yeaman said any measures the government made should be “temporary and regularly reviewed”,so they can be lifted if market conditions change.
A key union also stepped up pressure on the government on Tuesday calling for a cap on the price miners can charge the operators of coal-fired power stations and warning controls on gas prices alone would not be enough to lower power bills.