TOM CONNELL: Labor has come under increased pressure recently to get more tax from Australian gas exports. Last week the PM ruled out that happening, at least in this budget, and that was language today again from the Minister. Today though the announcement was a gas reservation policy, not so much all the details, but the parameters set out and confirmation it is going ahead after a lot of speculation. So what do we know so far? Existing contracts, this is what Labor was emphasising today, they'll be honoured for these exporters. In other words, us going around the world saying, well, look, we'll export gas to you, keep giving us petrol, that will still happen. Well, also this scheme will begin on July 1, 2027. There will have to be more consultation on exactly how it works, including with the existing WA reservation policy that's already in place at a state level. We know the amount of gas reserved as well will be the equivalent of 20 per cent of the gas we export, so not that actual export gas but the equivalent of it. I spoke a short time ago with the Resources Minister, Madeleine King, and began by asking her where this 20 per cent comes from. 

MINISTER MADELEINE KING: What is really important, is we know that the LNG producers right around the country have their existing contracts which they meet and meet well, and we respect them, and they're very important to energy security. What there also is, is uncontracted gas, what sometimes is referred to as gas on the spot market, and that's where we sometimes see prices fluctuate quite highly, especially in times of global shortages or conflict or disruption in supply. So this percentage is found in that uncontracted gas market, so to speak. 

TOM CONNELL: Okay. 

MINISTER MADELEINE KING: But what's really important is what this gas reservation policy does ‑ if I may continue for a moment ‑ is make it a buyer's market. So it shifts the balance of power from the producers being able to simply offer, and they offer and in good faith, and it's not always taken up, but it makes them compete to get an export approval by having them actually supply. And that competition amongst LNG exporters for what they do with their domestic gas supply will drive prices downward. 

TOM CONNELL: Okay. Uncontracted gas, okay. That's clarified. So in terms of the price impact then, is the calibration here to have a slight over supply in the Australian market, and that will be the price driver. Is that the deliberate strategy within this policy in terms of why you landed on this figure, this per cent? 

MINISTER MADELEINE KING: Well, we expect there will be a modest over supply, but really it is about ‑ the real change comes in the obligation, and it's a really significant obligation on our LNG exporters to actually supply the market. Right now, what we have is a system, and it's been made up of various responses to various conflicts, and since our reforms in 2022 it has stabilised the market, but it's not a sustainable patchwork to continue into the future. But taking the opportunity through the Gas Market Review, and introducing this reservation scheme, it ensures that rather than just offer in good faith, which they are doing, this gas to the market, which is sometimes taken up but rarely not, making it an obligation to actually provide, as they do in the domestic gas reservation policy in Western Australia, will be the real thing that drives those prices down. There's competition between those exporters for the domestic market as well. 

TOM CONNELL: Have you modelled what impact this will have on domestic wholesale gas prices? 

MINISTER MADELEINE KING: We've done a lot of work, a lot of investigations. This policy was announced a year ago, and we've been working since that doing the domestic ‑ the Gas Market Review. There has been much consultation so far, and we're going to go into more detailed consultation afterward, but as you would expect the government has done a lot of study and a lot of investigation as to the effects of this, as has everybody else, I might add, and they've given it to us. We get a lot of free advice from industry, from manufacturing industry, from other stakeholders, including the gas industry itself, our departments doing their own work, and this is the figure we have landed on, which we believe will work best. But I want to be really clear, starting today we will start the more detailed consultation to how we implement the reservation based on the 20 per cent LNG export figure, but also around the export approval principle of this. 

TOM CONNELL: Okay. But to arrive at that 20 per cent, was there some modelling done to model what impact this would have on domestic wholesale gas prices? 

MINISTER MADELEINE KING: I think I've addressed that. There is a whole body of work that has been done on the effects of the mechanism, so I'm going to leave it at that, 'cause there is more work to do, and that will be really important ‑‑ 

TOM CONNELL: Does that mean you're not sure yet ‑‑ 

MINISTER MADELEINE KING: ‑‑ and putting the cart before the horse.  It would be dangerous ‑‑ 

TOM CONNELL: ‑‑ once you've got the details you'd be able to say it will be $1 to $3 less or whatever it might be, is that going to come out down the track? 

MINISTER MADELEINE KING: No, no, no, no, no. I want to be really clear. The significance of what I've explained around making this a buyer's market, is what will drive down gas prices. The issue sometimes with setting some kind of cap which we see is that that no longer becomes ‑ it becomes the floor, and it gets rid of the opportunity for prices to go down even further. So, we don't want to be going into that space. We are using the market itself and changing it to be a buyer's market to drive down the price of gas for Australian consumers, for Australian businesses, for Australian industry. 

TOM CONNELL: On the tax treatment of gas and exporting gas, is this essentially ‑ would you agree this is your aim, that on the one hand you want to avoid people not investing, companies not investing, scaring people off, that's what you want to avoid, on the other hand you want to maximise returns for Australian taxpayers; would you agree with that sentiment? 

MINISTER MADELEINE KING: We always want to encourage investment. I mention this often in public statements, there's hundreds of billions of dollars of investment in the gas industry. Without the international investment that has built gas export facilities right around the country, we wouldn't have enough domestic gas to supply Australian households and businesses, so we do encourage investment. This is a very ‑ a major and significant policy, but it does seek to introduce a more long‑term gas market for the good of the country, and we'll streamline the existing policy mechanisms as well. So I think your question goes to investment, and of course we encourage it, and this is what we see as a model of providing certainty for that investment, investment in further gas production. But equally, investment in industrial manufacturing facilities as well, because they will get the certainty of supply as well as that downward pressure, as I mentioned before. 

TOM CONNELL: So is wanting to get the investment tick, do you also want to maximise return for Australian taxpayers? 

MINISTER MADELEINE KING: Well, what I am concentrating on in the return to Australian consumers is the availability of affordable gas, whether it be in southern parts of the country where they use gas predominantly to heat their homes, or whether it be in industrial feedstock right around the country, for all manner of things, whether it be the production of fertilizer, or the refining of critical minerals or other processed goods. So that's the return I want for every single Australian consumer, and that's been this government's priorities, to make sure Australians have affordable gas for their households and for their businesses. But I would reiterate, it's important to note that gas use is declining in this country as well, nonetheless it remains important. 

TOM CONNELL: So, you don't see any part of your role as trying to maximise return for Australian taxpayers? 

MINISTER MADELEINE KING: Well, the return to Australians is more gas for Australians. As I said, I feel like I'm repeating myself ‑‑ 

TOM CONNELL: I understood that's today's policy, but there's also ‑‑ 

MINISTER MADELEINE KING: ‑‑ [indistinct] I don't know how I ‑‑ 

TOM CONNELL: Well, there's tax treatment on exports, that's what the question's about, so the PRRT, that's a thing, we get money for it, I'm asking about ‑‑ 

MINISTER MADELEINE KING: Oh, you're going to another discussion ‑‑ 

TOM CONNELL: ‑‑ whether you also see ‑‑ 

MINISTER MADELEINE KING: Well, if you're asking about the PRRT ‑‑ 

TOM CONNELL: This is what I'm saying, taxing of gas ‑‑ 

MINISTER MADELEINE KING: [Indistinct] I didn't realise ‑‑ 

TOM CONNELL: Yeah. Okay, I apologise, I did say on taxing of gas. 

MINISTER MADELEINE KING: No. 

TOM CONNELL: I apologise I wasn't clear. 

MINISTER MADELEINE KING: Right. I want to ‑ yeah, but this policy is not about taxing of gas, it's about providing gas for Australian businesses ‑‑ 

TOM CONNELL: No, I understand that. 

MINISTER MADELEINE KING: It's quite a different topic. 

TOM CONNELL: Perhaps I wasn't clear. 

MINISTER MADELEINE KING: Yeah, okay. 

TOM CONNELL: Well, yeah, I did say taxing. I'll be crystal‑clear. So the PRRT, it's supposed to raise 2.5 billion a year, when the government announced that change they said this is a sustainable amount. It's raising about 1.5 billion, therefore, would you look to change it, so it does actually raise 2.5 billion? 

MINISTER MADELEINE KING: No. Tax settings haven't changed, and we're very clear about that. But I would add around the PRRT is it is a profit‑based tax and it is designed to get greater benefit for the taxpayer over the longer term, and a lot of it. And I will also add – but also there's a bit of confusion around who this applies to, and of course it doesn't apply to the gas from Queensland that gets exported, but also gets piped down to Victoria and New South Wales, which is from onshore coal seam gas. So that is not subject to the PRRT, rather it is mostly, in fact nearly all is gas on the Western Australian coast, and some off Northern Territory. So I think there's a bit of confusion as to where it applies. But really importantly, we have to respect in this country the literally hundreds of billions of dollars that have been invested from investors around the globe to build this gas industry, which over the four decades of its existence has provided, you know, thousands upon thousands of jobs and great prosperity to the nation. So, I think that is a very valid and a very valuable contribution to Australia's prosperity. The PRRT is a profit‑based tax. I cannot help it if some lobby groups don't understand it or wish to understand it or indeed proactively spread misinformation around the taxation treatment, or indeed the validity or value of the gas industry to all Australians. 

TOM CONNELL: So the question again, do you see part of your role as Minister, and I understand wanting to encourage investment and so on, but also wanting to maximise return for the taxpayer on Australian gas? 

MINISTER MADELEINE KING: Sorry, Tom, you've asked this question to me like five times now, and I've provided the same answer, so I don't know what I can add to it. My focus is about making sure Australians get affordable gas and enough of it for their businesses and their households and for industry. And I just spoke to you about the PRRT and explained that as well, so I'm sorry if I'm missing something here. 

TOM CONNELL: We'll see, make no mistake. There are some within Labor that want the PRRT to raise more money on gas. We'll see who wins out in the longer term.