Slade Brockman (WA, Liberal Party) Share this | Hansard source

I too rise to speak on this matter of urgency, and I'm very happy to follow my colleagues Senators Scarr and Canavan on the matter of gas policy in the this country. I think it's very important, following on from Senator Canavan in particular, to pick up on his point that we have two very different gas markets in Australia. We have an eastern states gas market, which is currently facing extraordinary cost pressures. But we also have the Western Australian gas market that has been described recently in a major newspaper as 'providing Western Australia a low energy price paradise'. Western Australians are the largest gas consumers of any Australians.

Do these things happen as a result of accident? No, and as you would know very well, Mr Acting Deputy President Dean Smith, they happened as a result of government policy led by Sir Charles Court of the Liberal Party. In fact, rather than the current gas reservations policy, it was the 'take or pay agreement' that Sir Charles Court put in place with the North West Shelf Project that enabled Western Australia to develop the situation it currently has where it has internationally recognised low gas prices and sufficient supply to meet industry demands. I would like to see that industry demand increase—in fact, I would like to see more growth in Western Australia as a result of our very cost-effective gas prices.

Not only did that gas policy provide Western Australia with a very solid foundation of its own energy supply system, but it also meant that we could supply our major trading partners and allies with a very important export commodity. Japan, a nation recognised widely as a positive environmental advocate internationally, is the largest importer of LNG from Western Australia. Some 48 per cent of LNG from Western Australia actually goes to Japan, which is widely seen as having very strong environmental credentials. We don't only export to Japan; we also export to other very important trading partners: South Korea, Taiwan, Singapore, China, India. Western Australian LNG quite literally powers the world, and that is a very positive thing.

These projects don't come at no cost. These projects require significant investment upfront for returns that may come decades down the line. The Scarborough project in Western Australia has a cost of some $12 billion. Investors need to decide to invest that money a long, long time before any return from that investment is forthcoming. On the west coast we've seen those investments flow over a consistent period of time thanks to good government policy, starting with Sir Charles Court. On the east coast, sadly, we can't say that has been the case. As Senators Scarr and Canavan pointed out, an underinvestment, particularly in a state like Victoria—in fact, you can't even call it an underinvestment because it's been a regulatory block, governments refusing to allow business to unlock the resources that do exist—has resulted in this current situation where we have a massive spike in gas prices.

The greatest irony then is when we see this government flailing around. What solutions has it actually managed to come up with? Well, it's come up with no solutions. It's come up with a few thought bubbles that really puzzle me: price caps. As Senator Scarr said, when have price caps ever solved a supply problem?