JAMES GLENDAY, HOST: Well, the Australian Government has made a huge intervention in the country's gas market, forcing energy companies to set aside gas exclusively for domestic use for the East Coast of the country from July next year. The Industry Minister, Tim Ayres joins us now. Minister, welcome back to News Breakfast.

SENATOR TIM AYRES, MINISTER FOR INDUSTRY AND INNOVATION AND MINISTER FOR SCIENCE: G', day, James. Good to be on the show.

HOST: Western Australia has a gas reserve. It's had one for a long time and their gas sells for about $8 a gigajoule – it bounces around that figure. The East Coast of Australia does not at the moment have a gas reserve. It's selling for about $13 to $15 a gigajoule. How much is this reservation on the East Coast going to drive down prices?

AYRES: Well, as you've seen in yesterday's interviews, we are not making predictions about specific price levels, but, but this will provide the lowest possible price for Australian households and Australian industry. I was working in manufacturing, representing manufacturing workers for 25 years before I was elected to the Parliament. I watched the impact of Australian businesses who were suddenly exposed to global prices for gas. 

We have plentiful gas resources here in Australia. The pressure that that puts on businesses, forcing many foundational Australian manufacturing businesses offshore. This is a decisive intervention to require 20% of Australian exports from gas producers to come back here into Australia to supply much more gas. So, there'll be more gas, and it will be at the lowest possible price. It will apply from the middle of next year on and the price impacts of that will continue to improve as gas contracts come off. This is a decisive intervention.

HOST: It is a, it is a big intervention. Unions have wanted this for a long time. I mean, you were part of that union push initially. A lot of manufacturing businesses have wanted this. I know the industry group has as well. I sort of let you explain the policy there. But I do want to take you back to this trigger of price because of course it only helps businesses if the price is lower. Have you modelled how much of a difference this is likely to make, if you won't tell me what the price the difference is going to be?

AYRES: Well, as a cabinet, we work very carefully through all of these issues, and the focus here is on making sure – remember that as every reporting interval comes through – there are predictions about potential shortfalls of gas on the East Coast. That will no longer be the case. So, on supply, this is very significant, but it has also been designed to produce the lowest possible price. 

Now I'm not making predictions about price levels and there are differences between, you know, the different price levels. It relies upon transport prices, all of these things. But what we are doing is delivering the lowest possible price for Australian households, but particularly in my area of activity, for Australian manufacturers in the outer suburbs and industrial regions. This is a very welcome intervention indeed. We'll work closely with manufacturers and gas producers to make sure that the final design, over the next couple of months, means that we deliver the best possible outcome. But this is all about price, James.

HOST: It's all about price. But you won't say what the price is. Do you expect it to be closer to what people in WA pay?

AYRES: Well, the Western Australian reservation has been unambiguously good for Western Australia's economy. It has led to very significant investments. I just point out to one – Australia will have a urea production facility. That's the fertiliser that's mostly used by Australian agriculture. We lost our previous urea production facilities because gas was too high. The Perdaman facility will open next year, will produce a very significant part of Australia's fertiliser requirement. 

It's there because Western Australia's gas reservation scheme gives that company the confidence to invest. And you'll have the same dynamic now applying right across Australia that for East Coast manufacturing will work with Western Australia too to make sure that, that the schemes integrate successfully. Applying right across Australia for iron and steel production for future critical metals.

It'll sustain with confidence the manufacturing businesses who are here who rely upon gas particularly as a feedstock. But it provides a really clear investment signal for the future, for that Future Made in Australia agenda which now has buttressing it cheaper gas for Australian industry. Australian gas being reserved for Australian industry and Australian households.

HOST: This is something businesses, manufacturers have wanted for some time. I just – I think there'll be some people watching going well this doesn't affect me. I want to get off gas anyway. But the real kicker for this of course is that when the wind doesn't blow and the sun doesn't shine, gas is going to be filling the gaps for many decades to come under your energy plan. Will this put downward pressure on power prices as well?

AYRES: Well, well, it certainly will mean that the gas prices for those gas generators that essentially provide peaking capacity in our electricity system will be lower. That's true. So, that will form part of the mosaic of downward price pressures that the Government is applying for the electricity system. The fundamental driver of lower prices, of course will be more generation and more transmission. That is the Government's plan here. And so on the electricity side – absolute effort here rebuilding a modern electricity system that drives down prices for households and business. And on the gas side, where, where gas is required – particularly where it's required as a feedstock. It's a chemical process, then –

HOST: Sorry to interrupt. I just, I just, how do we judge the success of this? If you can't tell us roughly where price is going to sit. What should we be looking at in your view? Should it be how many extra businesses set up and start making things in Australia as opposed to, you know, importing them from China?

AYRES: Well, that is exactly what this is directed to achieve. Everybody knows that providing 20% additional gas into the system will cause prices in Australia to fall and does disconnect the Australian gas prices from global prices. 

Your viewers will have seen what happened after the Ukraine conflict, for example, when gas prices spiked and Australian prices followed that. We have plentiful gas here. This means that we're honouring our existing contracts with our energy partners overseas. That's important for Australia's reputation and confidence in Australian investment. But we are, we are making this decision – a decisive intervention that makes Australia stronger from the Albanese Government here that will put very significant downward pressure on prices. It will apply from the middle of next year and we're going to work hard to make sure that.

HOST: Just before I let you go, Minister, I do want to take you – there is obviously, there's a lot of focus on the so-called ‘ISIS brides’ who've come back to Australia. They've been charged, taken into custody, a couple of them. Do they pose any risk to Australia? And what do you make of the extensive wall-to-wall coverage of this issue?

AYRES: Oh well, we did say as a Government that some of these returnees would face the full force of the law when they return. That's certainly what's happened here. The Australian Government's position has been not to provide assistance to these people. That is what has happened. It was inevitable that at some point some of them would return. The AFP has done its work here. The AFP and security agencies will continue to do their work and that's I think what Australians would expect.

HOST: Minister, thank you very much for joining us this morning.

AYRES: Thank you, James.