Sky News - Tax Cuts and Gas
SKY NEWS WITH ANNELISE NIELSEN AND KIERAN GILBERT
THURSDAY, 4 JULY 2019
SUBJECTS: Tax Cuts, Gas Reservation, Crossbench deals
ANNALISE NIELSEN, HOST: Matt Keogh the Shadow Minister for Defence Industry, thanks so much for your time.
MATT KEOGH MP: Great to be with you.
NIELSEN: There was an interesting point raised by Rex Patrick in his interview with Kieran just now that as part of his deal with the Government about gas prices is that this could be affecting existing contracts. Is that a concern?
KEOGH: I think it is a concern. We want to see the detail of that because we don’t want to see is the Government do anything that creates sovereign risk issues for further investment in Australia. Looking at a domestic gas reservation scheme nationally like what we have operating in Western Australia already would be a good thing to look at and I think that’s something we would support - Government looking at it prospectively for new developments, but, one of the things from discussions I’ve already been having with the resources sector, the oil and gas sector is they want certainty and clarity and they don’t want surprises sprung on them with contracts they’ve already issued.
KIERAN GILBERT, HOST: So the issue would be, a reservation in your mind that’s done, as you said, elsewhere at a state level. But this domestic supply mechanism that Rex Patrick spoke about there, he believes can impact supply contracts to export markets as he explained there and the companies would have to find a supply from elsewhere. Are you saying in that context that is a sovereign risk issue for companies like Shell, Origin and so on?
KEOGH: Yea and this was the risk with the “Big Stick” legislation the Government proposed previously as well that if they’re going to lock up existing gas that’s already been pre-sold that that may involve ripping up contracts. Now we need to make sure we’ve got a firm supply of gas here at a good price to support our manufacturing industry, to make sure we’ve got cheap electricity. That’s really important, but the way in which you get to that is also important, so you don’t create those sovereign risk issues. We would really want to see the detail of what the Government is proposing with the cross bench as part of their horse trading exercise on these tax cuts, to understand ok, what are the ramifications of what you guys are signing up for? I see Mathias Cormann is saying this will be announced in future weeks whilst he’s got the senate voting today.
NEILSEN: Yea, do you think that’s a concern? That potentially they’re promising things they can’t deliver?
KEOGH: Well we don’t know what he may, or may not be able to deliver? I think it’s interesting from the cross bench’s point of view and we saw Jacqui Lambi earlier today saying that she’s operating on good will with the Government. That there doesn’t seem to be any written agreements or firm detail about what might be delivered for Tasmania and they do have a solid homelessness problem there that needs to be addressed – not taking away from that. But these deals that have been done with the cross bench without any detail around them are troubling both from the cross bench’s point of view. They’re being asked to vote on these tax cuts today, but they’re also troubling because what are the ramifications for us as a nation if we’re creating potential sovereign risk issues going forward?
GILBERT: So you want clarity from the Government as to what this policy is going to include? Because Rex Patrick in that interview confirmed in his mind there will be an announcement in July or August so within weeks we’re talking about. A deal on changes to the gas market, if it’s a reservation Labor would instinctively, you would think, give that a tick given you’ve committed to that previously in the election but this other domestic supply mechanism, you would have concerns about instinctively?
KEOGH: Well it’s important to recognise what happened in Western Australia with gas reservation was for new projects, so looking at it through that prism it’s fine. There’s certainty for investment, the gas companies, they can work with that. But if this mechanism that Rex Patrick and the Government are talking about now for existing contracts, that are all ready for export. We would want to see the detail of that.
GILBERT: Understandably. Wouldn’t you, as an observer of this debate, certainly the logic would suggest to reduce prices, you increase supply. (yep) but we have moratoria on this development of gas in Victoria and elsewhere, in New South Wales there’s basically a moratorium in place – there’s very little gas being extracted. Should Governments be looking at changing that situation?
KEOGH: There’s a number of factors that come into the gas pricing and availability here and you’ll get different information depending on the different stakeholders you speak to on the availability of gas but there’s a number of factors on price, transport charges going through the monopoly pipelines and I know that’s something the cross bench have also been speaking to Government about. There’s a number of mechanisms that can be looked at. I’m not saying this is a bad deal necessarily but we just don’t know, and that is the concern. What are the ramifications of a deal like this? We want the cheap gas, we want gas to be available. Manufacturers need it, we need it for our energy companies, but, what’s the detail you propose? As you said this might not get announced until late August – that’s nearly two months away. But they’re voting on the legislation today.
NIELSEN: Looking at the legislation we heard Jim Chalmers say this morning, that if it does get sent back to the house that the amendments are approved, Labor is still trying to decide what it would do. What do you think Labor should do in that instance?
KEOGH: Well I think if amendments are approved it goes through the Senate, it doesn’t go back to the house. But if the amendments are not approved in the Senate, Labor will look at what we ultimately do with this legislation. That’s the way in which we’ve gone through the decision making process, because we think it’s important those amendments are put. When you look at what the exports are saying - The Governor of the Reserve Bank and the economists of this country are clearly worried about the state of the economy, and what we need to see is the Government start to do some of the heavy lifting. Not just reducing interest rates from the reserve bank.
GILBERT: Finally are you encouraged by Senator Patricks suggestion that this situation – this compromise, done between him and Senator Lambie on different issues, it may cause the catalyst to unite to make another push to increase the Newstart Allowance? Surely that’s overdue?
KEOGH: Well we’ve said the Newstart Allowance should be reviewed so yes, absolutely, if there is pressure on the Government to review it, that is something that should happen. Just as the deeming rates issue, which the Government has now decided to talk about, after 6 years of Government is now, only just now, deciding to deal with that issue for pensioners and it’s such an important issue.
NIELSEN: Well it’s the first time the interest rates have come down, to be fair to the Government.
KEOGH: But those interest rates have been so low for so long, and they’ve done nothing about it. So yes it’s the first time those interest rates have reduced but the gap between the deeming rate and the interest rates now have been a problem for the six years they have been in Government – all on their watch.
NIELSEN: Matt Keogh, Thank you so much for your time.
KEOGH: Great to be with you.
GILBERT: Appreciate it