|
April 9, 2025
Transcript – ABC Afternoon Briefing
09 April 2025
E&OE
PATRICIA KARVELAS:
Let's bring in the Shadow Home Affairs Minister and Coalition Campaign spokesperson, James Paterson, to get a response to all of these issues. Welcome.
JAMES PATERSON:
Thanks for having me, Patricia.
PATRICIA KARVELAS:
Now, the leader, Peter Dutton, and the Shadow Minister, Ted O'Brien, are actually giving what looked like to me conflicting accounts of when households will see the full benefit of the gas price reduction. Peter Dutton said this calendar year, Ted O'Brien this morning made it sound like it was well into next year. Can you clarify when we will see a reduction?
JAMES PATERSON:
Patricia, we can't fix the damage that the Labor Party has done to our energy system over the last three years just overnight. Australians face up to 34% increases for household gas and 32% increases for electricity, and that will take time to unwind. But the benefits will start to flow initially as soon as the policy is introduced. We'll be sitting down with the gas companies early on after we're elected if we're successful at the election to make it very clear we expect them to supply the domestic market. We'll introduce the legislation as soon as it can be drafted to drive that gas back into the domestic market. Benefits will start to flow, but they won't all come straight away, because in the case of industrial users, for example, some of them sign onto contracts that go for a couple of years. As those contracts expire, they'll be able to negotiate lower prices as a result of our policy.
PATRICIA KARVELAS:
So when you say benefits will start flowing, can you clarify what benefits flowing actually looks like for a household? Does that mean by the end of this year, you think that you can reduce prices for households?
JAMES PATERSON:
Well, as we've set out in the document that's been released today by Danny Price from Frontier Economics who's one of the most preeminent energy economists in Australia who's been commissioned by Labor and Liberal Governments alike to do it, we believe that the impact on household electricity prices will be about 3%, but of course gas is used for many more things than just electricity. It's used by households to heat their homes and to deliver hot water and other things. It's also very heavily used by industry and household gas prices we think will fall by 7%, and of course, industry prices we think will fall by 15% based on this modelling.
PATRICIA KARVELAS:
But when will that happen? I still don't feel like I know when.
JAMES PATERSON:
Sure, Patricia, I can't give you the exact start date to the precise day, but as soon as we sit down with gas companies, we'll make it clear to them that we expect them to drive that gas into the domestic market. And what Danny Price and Frontier Economics have said is that that will reduce the wholesale gas price by about 23%. That's the $14 a gigajoule down to $10 a gigajoule figure, and that will have flow-on effects straight away into those contracts and over time households will benefit from that just as industry will benefit from that. We're not pretending we can flick a switch, we're not pretending we can fix this straight away. We don't have godlike powers, we can't fix it on day one. Labor has done a lot of damage to our energy system, but we'll start to work straight away and the benefits will flow throughout our first term.
PATRICIA KARVELAS:
So, people might not see any impact this year?
JAMES PATERSON:
No, no, I think they will see an impact. I think that we'll see the opposite of what they've seen on the Labor Party's watch. They won't see their gas prices rising by 34%. That won't happen. Gas prices will be down under us through this policy. Because what we're doing, Patricia, I think it's really important for your viewers to understand, is we're decoupling the Australian gas market on the east coast from the international market. The reason why that's important is the international market is hugely variable. We saw that with the outbreak of the war in Ukraine. It drove gas prices up spectacularly, and Australian gas prices, which were linked to that international gas price, also went up. And that hurt households and it hurt businesses. We're going to de-link the two. We're going to force that supply into the domestic market so we have a domestic price of about $10 a gigajoule, which is substantially better than what we have now.
PATRICIA KARVELAS:
So for households, it's like a 3% reduction. That sounds like about $50 a year. This is according to Tony Wood, who's looked at these numbers. So that's like, a reduction of like, $1 a week. That's not very much, is it?
JAMES PATERSON:
Well, let's cast our minds forward and imagine what would happen if the Albanese government is re-elected, especially if they're re-elected with their coalition partners in the Greens and the Teals. The 34% increase that we've seen over the last three years of gas prices on their watch, or the 32% rise in electricity prices, which for some families means up to $1,300 more than Labor promised that they would pay for electricity. Imagine how much more it will increase in their second term if they're successful? What we're saying is that we can bring down prices, and I think many Australians, frankly, would just be happy to know that prices aren't going to rise further, let alone that there could be any potential reduction in price.
PATRICIA KARVELAS:
You've mocked the idea of like, not very much money in the tax cuts, but you think a dollar a week in a gas price reduction for a household is enough?
JAMES PATERSON:
Well, Patricia, I'm not sure what else you're suggesting that we do here? We are doing far more than the government proposes to do.
PATRICIA KARVELAS:
I have no other suggestions, I am just trying to interrogate the idea of what is the benefit to households because the Coalition has suggested that the tax cuts that the government has legislated now are not very appealing or they won't do very much but you reckon a dollar a week for gas price reductions are appealing.
JAMES PATERSON:
Well, you don't have to take my word for it. That's what Australians are saying. I've seen a hundred vox pops screened on the news over the last couple of weeks of Australians saying 70 cents a day in 15 months' time is not going to help them and certainly not going to help as much as our petrol tax cut will help them, which could be $14 a week for someone who fills up their tank once a week. It could be up to $30 a week if you're a two-car household and you're filling up twice a week. So we've got immediate relief that'll be tangible. It'll be far bigger than Labor's tax cut in terms of petrol tax relief, and then over time we'll drive lower prices through reduced gas prices and also by transitioning our energy system into a nuclear powered emissions-free energy system which has been independently costed at 44% cheaper than Labor's policy. So we've got a short-term relief with petrol tax, we've got a medium-term relief for gas policies, and we've got a long-term plan for our energy system, which will make it emissions free, which will make it reliable and which will make it affordable.
PATRICIA KARVELAS:
The left-wing think tank, the Australia Institute, left-leaning, it's celebrating the news of what they have really called essentially an export tax. They say economics 101 says government should tax things we want less of. The energy producers' statement today says basically the same thing, that it will lead to less supply. So they're very different groups. They all think less supply will be the outcome here. Isn't that a risk?
JAMES PATERSON:
We don't expect to collect any revenue from the charge that we would put on this because we expect gas companies to comply with our policy intent, which is to drive 50 to 100 petajoules from that short-term spot market into the domestic Australian market so we can bring the price down of gas by 23 per cent according to the independent modelling that's been published. And at the same time, we'll facilitate further gas exploration and further gas exports by speeding up the approval time for gas projects, by investing in pipelines to make sure we can get the gas around the country to where it needs to be, and assist the industry to do more exploration for new gas that can be taken advantage of. So they're not in conflict at all, Patricia. We're both going to support the industry to find more gas, to utilise more gas, to export more gas, and we're also going to drive more gas into the domestic market because we want more supply, both to earn income for Australia and to reduce prices for Australians.
PATRICIA KARVELAS:
What does it feel like as somebody who's always been on the right of politics to have the left celebrating this policy like they are today?
JAMES PATERSON:
Well, good policy earns support across the spectrum sometimes, Patricia. I heard your previous guest say that it was a perfect policy. He wasn't sure about our motivations.
PATRICIA KARVELAS:
He said a few other things too.
JAMES PATERSON:
But he said it was the perfect policy and we'll take that endorsement from wherever it comes because we're not too concerned about the profitability of Australian gas companies. They're highly profitable. We don't mind getting criticisms from them.
PATRICIA KARVELAS:
Is your policy now more interventionist and more economically left-wing than Labor's?
JAMES PATERSON:
I think that's kind of crude terminology, to be honest. I think what our policy is, it's putting Australians first. It's putting Australian gas for Australians before it's exported overseas. And I think it's a reasonable principle because it's crazy, Patricia, that we're one of the most resource-rich countries in the world, that we have more gas reserves than many other countries in the world. But we export so much gas, and yet gas is unaffordable in our own country. It's driving people out of business; 29,000 businesses have closed over the last three years on this government's watch, partly due to higher energy prices. And it's hurting families who are struggling to heat their homes, who are struggling to power their homes. So we're very proud of this policy and very happy to defend it.
PATRICIA KARVELAS:
Let me put this to you then, Ed Husic and others I've heard today suggest that you will crumble when you get the heat from the gas companies, that you won't be able to stare them down. The suggestion, actually, from the other guest that you mentioned, who said it was a perfect policy, also said that you're funded by the fossil fuel companies, and ultimately, this is his claim, that you won't be able to stare them down if you were to become government. Would you stare them down even if they ran a campaign against you?
JAMES PATERSON:
It's very easy to question people's motivations baselessly like that, but I don't think Mr. Buckley's think tank donors were disclosed as part of your interview. I understand that his think tank is chaired by Graham Wood, who made one of the largest political donations in Australian history to the Greens a number of years ago. He donated $1.68 million to the Greens. So anyone can make arguments like that. I think we should take people at face value and take them to be sincere. We are absolutely sincere about this policy. We will implement this policy; we are utterly determined to implement this policy, whatever criticism might come from gas companies. The people I'm least worried about in this debate is gas companies, they're extraordinarily profitable companies. They will continue to be very profitable companies, but we need to make sure we have enough gas in the Australian market so that Australians don't suffer from some of the highest prices that they've faced ever before.
PATRICIA KARVELAS:
Just quickly on something that's huge and affects our country enormously, Donald Trump suggested earlier today that pharmaceutical imports to the US, including almost two billion dollars from Australia, are likely to be hit with tariffs. What's your response? How would you fight him on this?
JAMES PATERSON:
Well, that would be very concerning if it was true. It would be doubling down on the wrong policy that the President has adopted with his tariffs so far towards Australia, which are completely unjustified. The President described them as reciprocal tariffs, but we have no tariffs on the United States. We have a great free trade agreement from the United States, and the President's policies are not consistent with that. I would hope that the president would recognise the damage that has been done by these policies so far to stock markets around the world and the troubling predictions of a recession in the United States or even globally, and here in Australia, and recognise that this has not worked as intended and change course. He can set the trade policy for the United States, but I would say at least in respect to Australia, it's completely unjustified and should be abandoned, and I would not welcome in any way any sort of tariff on pharmaceutical exports either.
PATRICIA KARVELAS:
One more comment that was made. I'm sure you've seen the footage. It's extraordinary. Donald Trump's comments come after his trade representative, Jameson Greer, said the US should be, and I'm quoting, "running up the score with Australia and using money generated by tariffs to address their broader deficit". I mean, they want to run up the score with us. What does that say about how they regard us more broadly?
JAMES PATERSON:
Well, it will be very hard to run up the score if you want to measure trade in this way, that a trade surplus is a good thing and a trade deficit is a bad thing. That's not how we approach trade. We think trade is mutually beneficial and that we have comparative areas of advantage, and some countries we have surpluses with, and others we have deficits with, and it all works out in the wash. But even if you want to look at it that way, as he did in that Senate hearing, it's hard to see how much more you could run up the surplus with Australia because they've had a very significant trade surplus with Australia for the best part of 70 years. We're a very reliable partner. We are not just a good economic partner through the free trade agreement, but we're also a very important security partner to the United States, and I think the President's approach is not justified with respect to Australia.
PATRICIA KARVELAS:
Thank you so much for joining us.
ENDS