Interview with Sally Sara, ABC Radio National

SALLY SARA: The Department of Prime Minister and Cabinet has asked Treasury to model new levy options as a means of taxing windfall profits of gas companies, as the government tries to shield Australians from the economic impacts of the conflict in the Middle East. Fuel prices have risen sharply around the world since Iran began its effective blockade of the Strait of Hormuz.

A key shipping route for around a 5th of the world's oil. The federal government, yesterday, launched a taskforce to manage fuel supply, while the ACC announced a probe into alleged price gouging. Chris Bowen is the Minister for Climate Change and Energy and joins me now.

Minister, welcome back to breakfast. CHRIS BOWEN: Thanks, Sally. Good morning and good morning to everyone listening.

Before we get to how the government is responding to this conflict in the Middle East, Iran's de facto closure of the Strait of Hormuz continues, and we've seen tit for tat attacks on energy infrastructure this week. Is this now a war on energy in some ways? Well, it's certainly a war which obviously is having its most immediate impact on the people, the Middle East, but is having an impact people around the world in terms of energy supply and energy security in many different forms.

I guess that's pretty inevitable with a conflict which is focussed on this part of the world, which is so important to world's oil supplies in particular. Is the government considering imposing a new windfall tax on gas companies? Let me say a couple of things Sally.

Firstly, of course, the Treasurer did an outstanding job in our first term increasing tax on the PRRT, you know, and $2 billion extra raised, I think, that gets lost sometimes in the debate about these things, more broadly, and the budget's in May, not in March, and is released by the treasurer, not the energy minister. And so we're, I'm not, I'm not outlining today, the state of the budget.

That'll be for the treasurer in May. Is it a good idea? The budget day is in May, Sally, and the treasurer will announce the budget, but we're always, you know, the Treasurer's made clear, the tax reform is on the government's agenda, and is considering the way to maximise the efficient collection of tax in Australia.

But that's not something that we've, I'm focussed on at the moment. The moment I'm focussed on fuel supply for Australians and energy prices coming down. Ahead of the budget, is the government considering changing the Petroleum Resources Rent Tax to collect more revenue?

I think I just answered that, Sally. The Treasurer did that in the first term, $2 billion extra raised. It was very good reform against the virulent opposition of our opposition.

And I think that's important sometimes people, you know, I hear people talk about gas taxes and forgetting that the Treasurer did that against the odds with a very difficult parliament in terms of that last term when the opposition was so opposed to it. So that's been done, of course, I know, the Treasurer and the treasury and the ERC are working diligently through the budget, which is in May, not in March.

What’s the latest update that you have on the number of fuel stations around the country which are currently without diesel and or petrol? Well, firstly, Sally, let me just give a broad update and then deal with that more specifically, but broadly, as I said, yesterday, and as I've said, all the way through, all the ships that we have expected to arrive have arrived, in terms of diesel and petrol and jet fuel, and that the two refineries are working full well to get as much supply out into the system as possible.

So in that sense, our fuel supply remains as it did before the bombing of Iran. The challenge we have is that demand remains very, very high, spiked by 100%, doubled in a couple of days, any supply chain, any supply chain, for any commodity is going to struggle with that, as we saw during COVID with many different supply chains and, you know, shortages and we're seeing that across the country, particularly rural and regional areas.

Now, the number of service stations or percentage of service stations that are fully out of fuel is very low as a percentage of the service stations across the country. What is it at the moment? Well, low single digits, but that doesn't mean it's not a real crisis, a real challenge for those people who are having trouble getting fuel in rural and regional areas.

That's why it's been such a focus for me and the government and the industry and the states since this crisis began. Last week, the government responded to the issues in fuel supply chain in regional areas by releasing a portion of Australia's emergency stock pile. Yesterday, you said some of that fuel is now being directed into regional Australia.

It will take a little bit more time to fly through the supply chain. When do you expect that supply of fuel to be available at regional bowsers? I'm pretty pleased with the progress here, so it was this time last week, last Friday, I announced we were releasing that 20% of the strategic reserve.

I said at the time, I think people understand you can't just press a button and release hundreds of millions of litres overnight but, you know, you just don't have the trucks sitting around to deliver it, et cetera. What I chose to do, what I decided to do is make that release conditional on the companies who have that obligation, undertaking to the government to see that supply flow to regional areas that are having shortages.

That means that, you know, we had to have some discussions with them, but those discussions had gone very well. We've now approved the release of more than 500 million litres, which is now authorised for release and beginning to flow. Obviously, you know, predominantly flows from Brisbane and from Geelong, which is a lot better than having it flow from Texas, where it used to be held, a lot easier, but it does take time to get to every single service station, but it is already flowing.

So will it be days or weeks before it hits all the spots that needs to hit, do you think? Well, again, let's say we're already, we are seeing across the board deliveries across the country. So, you know, terminals are being delivered to, service stations are being delivered to.

We are continuing to see very high demand, which is why I've made the point consistently. Panic buying isn't necessary. In fact, it worsens the situation, not helps everyone.

We've got to get through a very uncertain time. We've been very clear. I remember saying on day one, what the Albanese Government can't guarantee you is that things won't be uncertain internationally.

I can guarantee we’ll be as prepared as we can be, and we will respond to changing circumstances. But we encourage people to buy as much fill as they need, no more and no less because the doubling of demand are any, it doesn't matter, who is in government, it doesn't matter, you know, who's doing what, no matter what the states are doing, what the federal government's doing, what the refiners are doing, if demand is double, the supply chain will struggle.

The AFR is reporting that Malaysia has warned that shipments to Australia could be interrupted if the war in the Middle East continues. What information have you had about Malaysia's supply to Australia? It's a very broad statement by the Malaysian government, just a general sort of statement there.

It wasn't a particular announcement that they were taking any particular action. Malaysia produces, refines a lot more fuel in Malaysia or Malaysians would need at any given time. We continue to talk to all our partners across Asia at various levels.

You know, ministerial, prime ministerial, ambassadorial, about the flow of energy both ways, both ways in terms of this crisis. At the moment, as I said, the Malaysian government has taken no action to threaten the supply of fuel to Australia and all the ships that we've expected to arrive have arrived. But we continue to engage.

Chris Bowen, thank you very much for your time this morning. Always a pleasure, Sally. Have a great day.

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