Press Conference, Harvest B Facility, Penrith

Shell’s participation in heads of agreement; Government’s actions in heads of agreement; Bill passing Parliament; Windfall tax.

JOURNALIST: Shell says it's pausing its participation in the heads of agreement supply deal while it assesses the impact of your proposed market intervention. Has the intervention threatened east coast gas supply and was this an unintended consequence of the Bill? 

ED HUSIC, MINISTER FOR INDUSTRY AND SCIENCE: Let's be clear about this. The Australian Government has acted in the national economic interest. We need to get energy prices down but we need, in particular, to see gas provided to Australian manufacturing at competitive prices. Everyone out there in the general public understands completely we should have access to an Australian resource at Australian prices. It's why the Government has taken in extraordinary times, the common sense, practical step to moderate we've seen going on.  

A lot of these companies, like Shell, invested here over the years where gas prices were way lower than what they are now and they still made a very tidy profit. We're very supportive of gas companies making profits but it shouldn't be at the expense of others.  

So let me say this in terms of what Shell is saying. What Shell is saying, so we're ultimately clear. Shell is basically holding the rest of the country to ransom and saying that they will not supply an Australian resource because they have been prevented from making war-time profits. What's driven this has been the war in Ukraine and they have had - and it's obscene for me to say this, the best market conditions in years and they want to be able to make profits off the back of that. It's just wrong.  

As a government, we have a responsibility to inject balance into a market the ACCC has said has got a great deal of imbalance. You've got three big companies who call all the shots in that market. They shape the contracts in the way they want, it is not a fair bargaining environment and some of the behaviour that we have seen in the gas market has been called out by the ACCC. We would be irresponsible as a government not to respond to that. 

So we are doing what's in the national economic interest - creating moderation, the gas companies can still make profit while allowing other firms in the Australian economy to make a profit and create jobs and secure those jobs, that’s very important, and we need to see more of it occur where energy-intensive industry, like manufacturing, particularly in the outer suburbs and our regions, that are creating up to 900,000 Australian jobs, need to be able to continue and survive.  

JOURNALIST: I guess, following on from that, what's the Government doing to make sure the heads of agreement doesn't fall apart? 

ED HUSIC: Well, we're committed to the heads of agreement, we signed up to it. The issue is will the gas companies honour it or are they going to welsh? I mean, that's basically the proposition being put forward here and to explain to the Australian people why $12 a gigajoule in terms of the price cap is out of line when they were previously quite content with half of that. I mean, that's what they were doing previously. 

Now, I've said on a number of occasions, gas companies can absolutely make a profit but they're not going to profit at the expense of the rest of the economy. Now they have an opportunity with the mandatory gas code that is being developed, that - or the mandatory code of conduct, I should say, they've got an opportunity to put their views forward and they should also explain to the Australian public why they believe that the price, a reasonable price is unreasonable to them and why them charging as much as they possibly can, we should just cop that as a nation. We've got to get balance, we've got to observe the national economic interest. It's exactly what we're doing as a government.  

JOURNALIST: Just on that, how confident are you that the Bill will pass on Thursday? 

ED HUSIC: I think what we need to do - I am very careful about making predictions in terms of legislation. What I can tell you is this: We will work through, with people of good faith in the Australian Parliament, to ensure that we get lower prices, that we shield pensioners and the vulnerable from the worst of the price increases expected on energy over the coming 12 months, that we also ensure access to an Australian resource for manufacturers in the outer suburbs and regions to protect jobs, that we'll work through all of that, and, as I said, deliver an Australian resource at Australian prices. 

And I think when people think that through, we will work that through with others. We've had the discussions with, in particular, crossbenchers, but there is definite resolution in the Australian Government to ensure that we lower those prices, protect jobs, and importantly, make sure that pensioners and the vulnerable next winter do not make a choice where they say, "I cannot operate my heating and I will just go cold because I can't afford prices at where they're at." And if Shell can explain to pensioners why they should make that choice instead of Shell doing the right thing, I'd be all ears to hear that explanation.


JOURNALIST: Just one final one. Why won't the Government consider a temporary windfall tax to help fund the relief package in the Bill? 

ED HUSIC: We've looked as a Government at a range of options in dealing with an extremely difficult challenge with respect to reducing energy prices. So we've looked at what can actually move the needle on prices and we believe putting a cap in place at 12 months, improving the bargaining framework so that the sellers and the buyers of gas in big quantity can get that done without any government intervention whatsoever. So we have a better bargaining framework. We will make sure that happens and in due course lift the price cap. That is a sensible way forward and that's what we expect will be followed in due course. People will have a chance to have their say and to be able to do that. 

But if you look at the impact of a tax, yes, some people would love to see that tax go on but from our perspective at this point in time we don't see it moving the needle on price, we believe that the reforms that are being put forward right now strike the right balance, represent what's in the national economic interest and it's a lot more common sense and practical to go that way. 

But we do appreciate people have different views out there, but I've made the point, putting on a tax and going that way at this point in time doesn't represent as strong an avenue to get things done as what we're putting forward in the laws that we are submitting to the Parliament this week and that we hope we will get support to make sure that any prices come down and that we don't have people, as I said, making terrible choices in homes or manufacturing, making terrible choices to shut down operations and also to shut off the jobs that are in there.