Labor vows to unveil plan to combat energy emergency before Christmas

Measures that were considered unacceptable before Australia’s energy crisis became so acute are now back on the table, as the government seeks solutions before Christmas.

Direct subsidies to households and a domestic reserve to guarantee cheaper gas are among the suite of options the federal government is considering to combat high and rising power prices.

Labor has vowed to unveil its response to the “energy emergency” before Christmas, with cabinet expected to finalise a package next week.

The potential interventions to increase supply and drive down costs for households and businesses have been described by Treasurer Jim Chalmers as measures that “may not have been acceptable” before the crisis became so acute.

Mr Chalmers said the government recognised Australians were “hurting right now” and warned the high energy costs could not be “fixed overnight”.

States and territories are being brought into deliberations, with regulatory changes remaining the federal government’s preferred level compared to taxation or inflationary spending.

Treasurer Jim Chalmers with Prime Minister Anthony Albanese during Question Time. Picture: NCA NewsWire / Gary Ramage

Prime Minister Anthony Albanese will meet with premiers and chief ministers on Wednesday, while an energy ministers meeting is slated for Thursday.

The government has confirmed its goal is to prevent a 44 per cent rise in gas prices and 56 per cent increase in electricity over two years as forecast in the October federal budget.

The Australian Workers Union has joined with social welfare organisation ACOSS to urge the government to address power prices with urgency to prevent job losses and business closures.

“Many people on low incomes are already being forced to make the choice between paying rent, putting food on the table and paying their energy bills,” the group said.

The AWU has suggested a price cap on domestic gas wholesale prices based on the five-year average of about $8 to $10 per gigajoule.

Asked about this figure on Tuesday, Resources Minister Madeleine King said there was “analysis being done on this right now”.

Resources Minister Madeleine King. Picture: NCA NewsWire / Gary Ramage

Ms King confirmed reserving some of the uncontracted gas currently sold onto the international spot market for domestic use instead was “an option on the table”.

“But it’s one of many,” she said.

“I wouldn’t want anyone to get excited either way that that is what the government’s settling on.”

Ms King said the government was conscious of potential “unintended consequences”, such as negatively impacting investment in the energy sector, if it pulls the wrong lever to try and drive down prices.

Ms King said combating the “extraordinary” rise in gas and coal prices, fuelled by the war in Ukraine, was complex and may need to involve states and territories.

“We want to work with the states on this,” she said.

Queensland Premier Annastacia Palaszczuk on Tuesday warned the federal government against introducing a coal price cap and blasted Victoria and NSW for failing to ensure sufficient gas supply.

“Queensland is doing the heavy lifting when it comes to gas,” she said.

“If the issue is supply, NSW and Victoria can open up some of their gas fields.”

Treasury Secretary Steven Kennedy has called for an intervention in the market, but has warned retail price caps could “lead to quite a lot of dysfunction in the market itself”.

Originally published as Labor vows to unveil plan to combat energy emergency before Christmas