Mark McGowan says federal colleagues should look to Western Australia as budget forecasts surge in energy prices – ABC News

Mark McGowan says federal colleagues should look to Western Australia as budget forecasts surge in energy prices
Follow the latest developments on Russian missile strikes in Ukraine and Poland in our live blog
Catch up with The Loop, your quick wrap of this morning's news
For the latest flood and weather warnings, search on ABC Emergency
West Australian Premier Mark McGowan says the federal government should look to his state and overseas to find a solution to surging electricity prices, which are forecast to rise 56 per cent in the next 18 months.
In Labor's first budget, which was released on Tuesday night, prices were predicted to rise an average of 20 per cent by Christmas, and a further 30 per cent in the next financial year, with gas prices also tipped to increase 44 per cent over the same period of time.
For West Australians it's a different story, with Mr McGowan telling 7.30 they're estimating an increase of between 2.5 to 3 per cent.
"There's two main factors involved here," he told 7.30's Sarah Ferguson.
"One is the reservation policy on gas, which West Australia's had for 16 years. And secondly [is] the fact we haven't privatised our electricity assets."
Prime Minister Anthony Albanese told the ABC on Wednesday that his government will give "strong consideration" to intervening in energy markets. 
The state of WA is the only one that forces gas producers to reserve gas for domestic use.
The mechanism was introduced in 2006 by former premier Alan Carpenter and requires gas exports to keep at least 15 per cent of what they produce for local use.
Mr McGowan says it is because of this gas reservation policy that Western Australians have "reliable electricity, affordable gas, [and a] reliable supply," and "none of the sort of chaos you're seeing in the eastern states".
"I think there's a pretty good model here in Western Australia," Mr McGowan said.
"Obviously, producers of gas in the east wouldn't like it, but Australian national interest and the people of Australia must come first.
"Industry didn't like it at the time but now, it's seen as a wonderful initiative and, across the board, it's accepted by industry — both the oil and gas industry itself, but also other industries that are downstream users of it, particularly down here in Perth.
"So we have sort of a much more steadier, more reliable system than they have in the eastern states."
Mr McGowan, who was a state minister at the time, said the 2006 gas reserve policy was "quite controversial" when it was first introduced.
He said the Howard Government objected to the idea, as well as big oil and gas companies.
"But to his credit, Alan Carpenter stuck to his guns, [and] a policy was put in place," he said.
"There was much gnashing of teeth, threats to sovereign risks, or threats [that] there won't be any further investment."
With WA's policy of quarantining 15 per cent of gas for its local market bearing fruit, former rivals and premiers Alan Carpenter and Colin Barnett say the east coast gas crisis was avoidable.
Getting the big gas producers on board was done with a "great deal of difficulty".
Critics claimed that if this policy was introduced, gas exploration and projects would no longer happen. But the Premier tells 7.30 that since 2006, the WA Government has seen "more than $100 billion dollars of investment in gas projects".
"So obviously, the sort of the bleating and the threats, and all of that turns out to be inaccurate," he said.
Mr McGowan said in WA gas is "plentiful, and it's affordable", and they don't have the same problems that the eastern states face.
"Now it's seen as a prescient and very wise decision, and I think you'll find that people who were critics will probably deny they're critics now," he said.
Mr McGowan also believes federally they "always assumed there would be enough available for a local supplier", considering the population and exports.
"The assumption that we all operated on was incorrect," he said.
Watch 7.30, Mondays to Thursdays 7.30pm on ABC iview and ABC TV
We acknowledge Aboriginal and Torres Strait Islander peoples as the First Australians and Traditional Custodians of the lands where we live, learn, and work.
This service may include material from Agence France-Presse (AFP), APTN, Reuters, AAP, CNN and the BBC World Service which is copyright and cannot be reproduced.
AEST = Australian Eastern Standard Time which is 10 hours ahead of GMT (Greenwich Mean Time)


Leave a Reply

Your email address will not be published. Required fields are marked *