Proposed new tax on coal, gas slammed by industry leaders

A government proposal to add a new tax to the energy sector has sent the coal and gas industry into a spin as representatives warn the move could cost jobs and won’t help to lower power prices.

Panicked gas and coal industry representatives are pushing for urgent clarification from the federal government around a potential new tax on the sector, which they say could cost jobs while not solving the problem of soaring energy bills.

The NSW Minerals Council is working with its federal and Queensland counterparts and is pressing for details on the government’s position, following bombshell reports that federal Labor will consider a temporary tax on coal and gas producers in a bid to reel in soaring electricity bills later this month.

The proposal has been met with fierce opposition by the industry, particularly in NSW, with doubts cast over the effectiveness of a new tax in driving down energy prices.

“Since news of a possible new mining tax broke late last week, I’ve been inundated with calls from people across the NSW mining sector extremely concerned at this poor policy proposal and the threat it could pose to investment and jobs in regional mining communities,” NSW Minerals Council CEO Stephen Galilee told The Telegraph.

Coal used in NSW is currently discounted with the industry fearing an additional tax won’t address the problem of soaring costs, which they say is driven by a lack of base-load power from traditional energy sources.

Coal and gas operators are concerned about a porposed new tax which could cost the industry jobs.

Minerals Council of Australia CEO Tania Constable said Prime Minister Anthony Albanese and Treasurer Jim Chalmers “need to urgently rule out this dangerous tax proposal that will do nothing but hurt Australian households and businesses”.

Jeff Dimery, CEO of energy company Atlinta, said he expected a face-to-face meeting with the government if their company would be impacted by the new tax.

Jeff Dimery, Managing Director and CEO of Alinta Energy. Picture: Arsineh Houspian

“I can’t recall the last time or a single time a tax has lowered the cost of something,” he said.

“We’ll wait and see what the detail is – I absolutely understand households are doing it tough with rising cost of living and it’s incumbent on governments to find ways to reduce that.”

“(But) we have not been consulted in anyway shape or form.”

It is understood the government overwhelmingly favours using regulation to drive down energy prices rather than increased taxes on the sector or spending on rebates for households.

Energy prices continue to be a key issue for household budgets. Picture: Gaye Gerard

Resources Minister Madeleine King is travelling to Japan this week to reassure the major trading partner of Australia’s role as a “stable and trusted” supplier of energy and resources.

Debate about changing regulations to secure domestic gas supply in Australia has caused some concern among major buyers like Japan and South Korea, but the federal government has insisted all international contracts would be honoured.

A spokesman for Ms King said Australia was “feeling the impact of the global energy crunch and ten years of delay by the Liberal government”, while her government wanted to introduce new policies to “put downward pressure on prices, and encourage increased investment in future energy needs to keep the lights on”.

Madeleine King Minister for Resources. Picture: Gary Ramage

“The Government is working through options as it considers possible reforms in the energy market. The Minister speaks regularly to industry bodies and industry leaders,” he said.

Nationals Senator Matt Canavan said: “Higher taxes on energy companies will just mean higher prices that we pay more for energy”.

“Perhaps the Labor Party thinks that if we have South American resources policies, we’ll play like a Brazilian football team at the world cup,” he said.