Nationals leader David Littleproud demanded the Albanese government activate an east coast gas reservation mechanism within 30 days, arguing manufacturers face a double squeeze from the Reserve Bank’s 4.60 per cent cash rate and spot LNG prices linked to Middle East supply disruptions.
Speaking outside Parliament House on Wednesday, Littleproud said food processors and fertiliser plants in Queensland and NSW were receiving contract renewal offers above $18 a gigajoule, levels he said made export-parity pricing untenable for domestic industry. He urged Resources Minister Madeleine King to use existing heads-of-power under the Australian Domestic Gas Security Mechanism rather than wait for ACCC reviews.
Policy fight
The government responded that ADGSM already allows export curbs when shortfalls are forecast and that the ACCC’s September interim gas report showed sufficient supply for households. Littleproud countered that industrial users on interruptible contracts were being rationed while LNG trains on Curtis Island shipped spot cargoes to Asia. He proposed reserving 15 per cent of east coast production for contracted domestic users at a regulated benchmark tied to historical netback prices.
Energy analysts at EnergyQuest said any reservation would require compensation clauses for LNG proponents and could face World Trade Organization challenges if structured as an export tax. They noted Queensland’s 2023 code of conduct already caps certain contract offers but excludes legacy deals signed before 2021.
Link to monetary policy
Littleproud tied his demand to Tuesday’s rate rise, claiming the RBA would need fewer hikes if energy input costs stabilised. Economists dismissed that sequencing: the central bank targets consumer inflation aggregates, and gas pass-through is only one component, albeit a volatile one. Still, the Australian Industry Group survey this month showed manufacturing confidence at a two-year low, with respondents citing power bills and working capital costs as joint constraints.
Political stakes
The Nationals hold several regional seats where food manufacturing employs thousands. Littleproud’s push pressures the Coalition to differentiate from Labor on cost-of-living while avoiding outright rejection of emissions targets. The Greens called both major parties timid, renewing calls for permanent export levies funding household rebates.
King is scheduled to meet east coast gas CEOs next week. Littleproud said he would introduce a private member’s bill if no reservation timetable is announced before the October sitting fortnight ends.