Alan Eggleston (WA, Liberal Party) Share this | Hansard source

Congratulations, Mr Deputy President, on your election. Gas seems to be the theme of what we are talking about in taking note of questions today, and I would like to speak about gas issues coming from the federal government and gas issues affecting the state Labor government in Western Australia. Senator Johnston talked about the impact of the decision to impose a tax generating $2.5 billion in revenue on condensate as it affected Woodside. It is absolute nonsense for Senator Crossin—who, I see, is fleeing from the chamber—to suggest that an impost of $2.5 billion on any company could not be passed back to the consumers and customers that that company serves. It is total nonsense to think that Woodside could do anything but plan to pass on that $2.5 billion impost, which has come out of the blue in the first budget of the Rudd government.

As Senator Johnston said, this is a breach of a financial agreement. There is no doubt at all that, when the North West Shelf project was set up, the agreement was that Woodside would be exempted from condensate tax as a means of helping the project get underway. In return, I understand, the joint venture partners said that they would provide gas at cost price, or a low price, to the domestic consumers of Western Australia. The federal government appears to have broken one side of the bargain, so in view of this decision of the federal government I do not see anything wrong at all with Woodside charging increased prices for the gas that they supply to domestic customers in Western Australia.

Senator Johnston talked about the fact that there was a sovereign risk matter in this decision. Australia has always had a great reputation as a very safe place to invest and a place where government agreements would be honoured. This decision undermines that reputation, and I think the Rudd government should hang their heads in shame for having been the government which broke the reputation of Australia as being a good country for sovereign risk.

We now have a situation where, contrary to all that the ALP said about their greenhouse credentials, they are going to tax condensate, which is a relatively greenhouse-friendly energy source compared to many others. It seems to me to be a little bit inconsistent that this government should be imposing this tax on condensate.

The other matter which I want to refer to is the Varanus gas explosion in the north-west of Western Australia and the total and utter incompetence of the Carpenter government in Western Australia in dealing with this terrible event, which the Chamber of Commerce and Industry in Western Australia estimates will have cost the Western Australian economy no less than $6.7 billion when all costs are assessed and when the gas is restored. The story of the Varanus Island gas explosion is very much a story of incompetence by the Carpenter government. This incompetence covers the failure of the government to heed warnings. The Carpenter government was given warnings by the Department of Industry and Resources in Western Australia according to Elizabeth Gosch, writing in the Australian on 13 August. There were repeated ‘warnings that Apache Energy was not complying with safety standards at its Varanus Island facility’, and the Department of Industry and Resources was asked to write to the operators of that facility asking them to carry out inspections on their facility.

That was not done. The Carpenter government failed to provide an alternative supply of energy in Western Australia, even though they knew that the gas pipeline could be compromised. They were incompetent in the way they dealt with the matter and have sought to delay the report on the explosion, which was due on 27 August, until after the state election. Politics comes into this because the Carpenter government have got a lot to hide. But they will not be able to escape the consequences of this. (Time expired)