Julian Hill (Bruce, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak about the ongoing crisis of gas prices. The hurt to households is bad enough—and, if we're honest, we all can recount stories, which continue, of pensioners not being able to heat their houses through winter—but this crisis is smashing Australian manufacturing and is continuing to threaten thousands of jobs. The tragedy of this is Australia is about to overtake the nation of Qatar as the world's biggest gas producing exporting nation, and yet we do not have enough gas for our domestic market. We're producing more gas than at any time in our history, but it's at the highest prices. This is a nonsense, it's a failure of policy and it's insane.

This is enormously important in my electorate of Bruce. I said in my first speech to this place that manufacturing continues to be the largest single employment sector in my electorate, employing thousands of people. Two weeks ago in parliament I met with a delegation of workers brought here by the Australian Workers' Union from east coast states—New South Wales, Victoria and Queensland. There was the same message from workers from Gladstone to Dandenong. They had the same plea. The crisis continues, jobs are being lost, there are jobs at risk, and we had case study after case study of doom. Once these jobs are gone, they do not come back. They're offshore. They're gone. They don't just restart if the gas price goes down.

Last September the Leader of the Opposition and I visited the Ace Metal Treatment Services factory in Clayton in my electorate. We heard firsthand that their gas bill had risen from $500,000 a year to $1.2 million a year. They can't cut any more costs. They've invested in new plants, they've become more efficient, they're using less gas, they've changed their labour arrangements, but they cannot sustain those kinds of prices. The same story is heard in numerous businesses across the east coast. When there, last September, the Leader of the Opposition formally called on the government to pull the trigger and act on gas export controls.

So, why didn't the government act? Well, there's a lot of speculation. Some of the speculation was that the then Deputy Prime Minister was a New Zealand citizen, they knew they were heading for a by-election and they did not want the decisions he made—a big decision like that—to be vulnerable to challenge in the court. Other speculation was that the Prime Minister has a philosophical objection to upsetting his mates in big business. So, what did the government do? Well, the Prime Minister got the gas companies into a room, and he waved his finger at them. He gave them a good talking to, then he shook their hands and told us, 'The problem is fixed.' Well, it's not fixed. The crisis continues.

The government's newspaper of choice, The Australianusually we get that quoted back at us—said yesterday that the Prime Minister's threats haven't worked, that the average Sydney and Melbourne wholesale spot prices went up 40 per cent last year and that the January prices in both cities, Melbourne and Sydney, are the highest on record for a January. This was reported yesterday, mind you. The gas chiefs were quoted as saying, 'That's bad luck. High prices are here to stay. Business will just have to suck it up and adapt.' Businesses in my electorate cannot sustain the current prices. They've squeezed every last drop out of their cost structure. They're close to hitting the wall.

Let's just presume that some of Prime Minister's claim was true—that we saw some reduction for some businesses in some areas, if they were lucky enough to get a deal. I rang Ace Metal Treatment Services last week to see how they're going. The handshake agreement has done nothing for businesses like Ace Metal Treatment Services that, last year, were forced to sign utterly unsustainable contracts with a gun at their head. You can't stay connected to the gas, if you're that kind of user, without a big multiyear contract in place. You have to have a contract. They were forced to sign a contract. They heard of one supplier and thought, 'Maybe the price has come down,' after the Prime Minister's handshake and finger waving. So they rang their gas company and said, 'Can we renegotiate? This is a force majeure clause, an unexpected event, a change in the market.' The gas company said, 'You can get nicked. You can you pay or we'll sue you, cut you off and put you out of business.' It's not good enough. The Prime Minister's handshake agreement puts no legal obligation on companies to increase supply. It's unenforceable. It's weak.

If the government were serious, they would have pulled the trigger on 1 November. But now they're stuck. They don't have the statutory right to do that until 1 November this year. The clock is ticking. If you don't believe Labor, if you don't believe workers losing jobs, if you don't believe businesses, if you don't believe The Australia, then I point out that the Prime Minister and Cabinet's own regulatory impact statement on the Prime Minister's handshake agreement warned 'it's likely that this option'—the handshake agreement—'would result in some users exiting the market, resulting in a loss of jobs and economic output.' This is exactly what we're seeing.

The government's one-point economic plan—cut multinational taxes for big companies and hope that something trickles down—is clearly not working. Every job lost between now and November, when they have the opportunity to act again, will be on the head the Prime Minister, and Labor will not let Australians forget it.