TOM CONNELL: Let's go now live to Shadow Finance Minister, Jane Hume for more on this. Thank you very much for your time. Why don't we start on this very issue? So some sort of impulse levy, call it what you will, on coal and gas, which is making massive profit at the moment. It's all different, cheaper energy prices, what are your thoughts on this possible direction from the government?
JANE HUME: You'd think at a time, Tom, when we're facing a cost of living crisis, possibly the worst thing you could do would be to put another tax on to an industry, which will then potentially pass that tax on to consumers? I'm not entirely sure the government's thought this one through although we know that this is something that they've been dying to do for a long time is this not just a mining tax by another name, you know, the problem with the Labor government, let's put aside the fact that they promised no new taxes. And now six months later, there's every single tax seems to be on the table. The problem is there doesn't seem to be a problem out there that they can't solve with a new tax, we know that the real problem with energy is supply. And that, you know, while everything else seems to be on the table in inverted commas, except bringing on new supply. Surely that is the solution to the energy crisis that Australia is facing right now, those 40% plus increases in the price of gas, the 50% plus increases in the prices of electricity that were included in the budget. So that's not as if this is a surprise, they knew it was going to happen. Now, now they're trying to find a solution by increasing taxes.
TOM CONNELL: Supply largely on the side of the states, but you mentioned there companies passing on to consumers. I mean, that sounds like an excuse for them to do so when if the way these industries work, is they set, you know, they open minds, they open projects, knowing they need to earn a certain amount per kilo joule per tonne, whatever it is, the factory is right now, they're way above that the government would temporarily scoop off some of that extra profit, not all of it, some of it, isn't that a fair enough approach to take when they then give it back to consumers? And that would not be passed on by these companies, they wouldn't be able to justify that.
JANE HUME: Have we seen a mechanism by which these tax would get passed on to consumers? I don't think so. And how temporary is temporary, you know, high prices, high commodity prices only lasts certain period of time where the tax automatically fall away, the moment that those high commodity prices fall away too.
TOM CONNELL: And it's a simple way to do it. Right? If they fall away supply, consumers pay less.
JANE HUME: I got I just want to pull you up on something there. Because you said that supply was really an issue of the states. But that's not entirely true. In fact, we saw cuts to gas supply projects in this very budget. We saw, I think it was 31 million from the Cooper and Adavale Basin Plan the exploration plan gas exploration plan, we saw another 23 million that was cut from the Beetaloo Basin and Cooperative Drilling Programme. So the government is you know, taking on one hand and then trying to give with another but it's doing so by raising taxes. There are better ways to do this. Okay. And taxes, we do not largely states. Thanks. So because all you do is largely up to the state and diminished confidence.
TOM CONNELL: You said tax, not the answer. But your government began an investigation into tax the PRRT, which was never designed for gas. And as a result, we get very little out of gas. So your government was going to do the same thing, which a lot of people said was a smart idea get more money out of gas in terms of our tax revenue. So is looking at the PRRT what your government was doing fair enough for Labor to do as well?
JANE HUME: Well, actually what we did in 2017, when we saw a significant spike in gas prices, not dissimilar to the one that we're facing now, out what we did was go and speak to the gas producers and say, well, how can we ensure domestic supply without pulling any of these mechanisms? We certainly didn't demonise them. We didn't call them frauds. We didn't say that gas was BS. We didn't say that. They were, you know, profiteering and you know, money hungry, whatever else it is that Ed Husic has accused them of being. And we certainly went out with a very consistent message because what we've seen from Labor is an inconsistent message. You know, Madeleine King will say one thing and Ed Husic will say another. Chris Bowen will say one thing, Jim Chalmers will say another, they haven't got a plan to deal with this. And of course, they haven't got a plan. They only have one solution, and that's tax increases.
TOM CONNELL: So do you think we have an inherent issue though, with gas in this country and that we have a lot of it, we're paying a very high price, we pay the international price for it, despite it being our gas at the end of the day. We make very little revenue. Do you see that as an inherent issue that needs fixing?
JANE HUME: The issue that needs fixing is supply. You're right, we have lots of gas in this country, but it's all under the ground or are under the oceans, tapping into that it's going to be the most important thing and it doesn't matter whether it's Narrabri or Scarborough, or Bass Strait.
TOM CONNELL: But even if we increase supply, I'm gonna jump in there sorry, we’re a little bit short on time. Even if we increase all of that no matter how much we get going right now, there's a huge global demand. If we increase all that supply, but we tax it at the same rate, I would get very little, and we're paying international prices. Still, we've got a problem, we can't create enough supply to fix the global shortfall. So it doesn't matter how much we get, isn't there an inherent issue if we're paying the international price for gas?
JANE HUME: This is not a dissimilar problem to one that we've faced before. If you deal with the cast, the gas producers if you make sure that there is enough domestic supply, and in fact, we had a very different domestic price from the international price and international wholesale price under our government, if you deal with the gas producers respectfully and constructively, this can be done. But you have to make sure that you're bringing on additional supply and not blocking it for whatever ideological reasons that they are unreasonable thing not forget that Chris Bowen said that the transition to renewable energy via gas was BS the words that he used, we think that this is the appropriate way to go. The reliance on gas is clear, around 40% of the energy usage of our manufacturers is guests. So we need to do something quickly. But it has to be done through supply if it's going to be sustainable, rather than just simply taxing a problem away.
TOM CONNELL: Well, you can do both though. You can look at supply, you can get more revenue from tax and also delink from the international price. You said before we had a different price under the Coalition. We weren't paying international prices. What do you mean by that? Labor hasn't changed any way that we pay for our gas.
JANE HUME: We made sure that we had a domestic supply of gas that was at prices that weren't necessarily reflective of those higher prices internationally. And it can be done. There is no doubt by making sure that the gas producers reserve enough for the domestic supply. And you do that through respectful negotiations not through demonising an industry. And yes, bringing on gas supply is fundamentally important. And if you start taxing industry, you know, particularly with sort of theoretically temporary taxes, and we don't know what the mechanism is going to be where you're just going to discourage new players from entering the market we have to instil confidence in the market. So in order to make it sustainable into the future.
TOM CONNELL: So can I just clarify, you think we're getting a fair amount, a decent and fair amount of revenue, out of gas in this country at the moment as a government?
JANE HUME: I don't believe in excessive profit, I certainly don't believe in super profits. And I don't believe that taxing is the solution to every single problem that a government faces.
TOM CONNELL: That's not the question.
JANE HUME: I haven't seen the mechanism that they intended to use, but I certainly don't think that they are moving in the right direction. This is a knee jerk reaction to a problem that they knew was coming that they haven't been able to solve. But we think that you can solve it through respectful dealings with the gas suppliers with the gas producers and bringing on more supply which really is the only sustainable way.
TOM CONNELL: All right, perhaps we'll see if they've got a proposal you might have a strong view then Jane. Here we normally have you with Jenny McAllister, and that was a bit hard this week. So one day each. Will talk to you about next Friday. Thank you.