Anthony Albanese returns fire at ‘Soviet-style’ energy sledge

Labor blasts gas companies, saying they avoided a windfall gains tax and have been allowed to continue banking huge profits.

Prime Minister Anthony Albanese and Energy Minister Chris Bowen have responded to criticism of Labor’s energy market intervention. Picture: Liam Kidston

Anthony Albanese has hit back at gas companies over criticism of a “Soviet-style” energy market intervention, warning the government avoided imposing a windfall gains tax to allow them to continue banking massive profits on the international market.

The Prime Minister, Energy Minister Chris Bowen and Industry Minister Ed Husic accused industry leaders of chasing profits, “jumping at shadows” and being “lippy” after Santos chief executive Kevin Gallagher slammed the government for pursuing energy market nationalisation.

As the government considers an overhaul of the Petroleum Resource Rent Tax ahead of the May budget, Mr Albanese said a $12-a-gigajoule gas price cap will ensure companies “continue to be profitable”.

“They will also gain the windfall gains that are on the international market. I do think that there is some irony in the fact that you have references to Russia when it is the Russian invasion of Ukraine that … has also led to record profits and returns for these businesses,” Mr Albanese said.

“If those companies had a look at what is happening internationally, by the UK conservative government that has put a windfall tax on those companies, we have chosen to not go down that road.”

Santos chief executive Kevin Gallagher. Picture Simon Cross

Mr Albanese said if Australia “was a good place to invest in 2021, when the average price was $9.70, it’s a pretty good place to invest in 2023 when there is a 12-month limit of $12”.

A Woodside Energy spokeswoman struck a more conciliatory tone on Friday, saying Woodside would “engage with the regulator on the mandatory code of conduct with a view to minimising market distortions and helping design fair mechanisms to implement the legislation”.

“We will also work with our customers, many of whom are also struggling to understand the implications of the new law, both in the immediate and longer-term future,” the spokeswoman said.

Woodside, which supplies 20 per cent of east coast domestic demand from Bass Strait, said the intervention failed to “address falling domestic gas supply and the increasingly critical role of gas in providing dispatchable power to facilitate the energy transition”.

Mr Bowen, who on Saturday will announce a $176m investment in eight grid-scale batteries delivering 2GW of dispatchable power, said Mr Gallagher’s “shrill response is just laughable”.

“I understand chief executives’ desire to maximise their profits. That’s their job. We have a different job. Our job is to act in the national interest, not in Santos’s or anybody else’s,” Mr Bowen said.

Mr Husic said there were a “lot of lippy executives … making all sorts of claims”, with some wishing to “hold on to every single dollar of their Putin profits”.

APPEA chief executive Samantha McCulloch said “we share the objective of ensuring that energy prices remain affordable and support targeted relief to households and business”.

“But business should be alarmed the government can now take command and control of the market while failing to address the underlying causes of higher gas prices – declining supply and increasing demand for gas for power generation,” she said.

Viva Energy remained “positive” about its Geelong gas import terminal project. Andrew Forrest’s Squadron Energy said the intervention would support its proposed Port Kembla LNG import plant and potentially help ship supplies from Queensland to NSW and Victorian consumers.

EnergyQuest warned the government’s heavy-handed intervention into energy markets would kill investment and force Labor to pull the gas trigger to boost supplies.

“Any attempt to apply price control to domestic gas contracts is almost certain to kill investment, which is already at record lows,” chief executive Graeme Bethune said.