Coalition Plan to Cut Australian Energy Bills
Synopsis
The Opposition has proposed a plan to significantly cut down the cost of Australian energy for businesses and homes. The initiative would create a 3 per cent decrease in the cost of electricity, driving…
The Opposition has proposed a plan to significantly cut down the cost of Australian energy for businesses and homes. The initiative would create a 3 per cent decrease in the cost of electricity, driving down household bills by 7% and industrial bills by 15%.
The Coalition has proposed a $1 billion fund that would go towards infrastructure for gas projects.
According to Frontier Economics, Australian companies make more profit by selling gas internationally. As a result, the Australians pay more for their gas.
How it Works
The new policy would create what the Coalition calls the “East Coast Gas Reservation Scheme.”
Peter Dutton claimed the policy would be a “gamechanger” in the current Australian energy market
“By making the gas companies put more of our Aussie gas into our market instead of exporting it, we will get the price of gas down by 15% [for industrial consumers],” he said.
Dutton claims prices of food other goods would start to come down soon after.
The new proposal would essentially create a gas reservation to Australia’s east coast market. By forcing east coast gas producers to provide this reservation, prices could drop from $14 a gigajoule to $10 a gigajoule by the end of the year. Currently, most of this gas is exported internationally, with just enough remaining supply to Queensland, New South Wales and Victoria. Additional gas can be provided to the east coast if there is a seasonal increase in demand for Australian energy.
Australian Energy Producers have been critical of Dutton’s plan, calling it a “damaging market intervention” that could cause more problems in the long-term.
Sources:
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