Interview with Dave Marchese, ABC Triple J Hack

DAVE MARCHESE, HOST: All right. Let's talk about a gas tax with the Government because you might remember, we had Labor MP Ed Husic on earlier this week and he was calling for a gas tax very publicly, so people from Labor's side of politics, their own MPs. There's been an inquiry in Parliament this week looking into it, and at that inquiry, we heard obviously from those who support the idea and have pushed their argument – but also from the gas industry, which is fighting back against the idea of a new tax or increasing the Petroleum Resource Rent Tax.

So, what is the Government going to do? What will be announced in the Budget? Well, let's see if we can get some kind of an idea from the minister in charge.

Energy Minister Chris Bowen joins me in studio. Chris Bowen, welcome to Hack. CHRIS BOWEN, MINISTER FOR CLIMATE CHANGE AND ENERGY: My pleasure, Dave.

I want to get into fuel security in a bit. I know you've had an update today. But before we get into that, the big question a lot of people listening now have for you is, can we expect a new tax on gas exports in the Budget?

So I understand... I get this question a lot, Dave, and I certainly understand it. And I certainly understand why people want to ensure that Australians get value for money from the gas under our soil and under our water.

And, yeah, one of the things I think I can tell you about is the reservation policy we're putting in place to ensure that 15 to 25 per cent of that gas is reserved for Australian use. On the tax, I'll just say a couple of things. Firstly, I think a lot of people forget or didn't sort of... it Isn’t front of mind that we have already increased the tax on gas in our first term in office by a substantial amount, by $2 billion.

And that wasn't easy, it was hard to do but we got it done. And then, secondly, look, I can't really comment on Budget matters. I know that's a sort of typical politician answer, but it happens to be true.

The Budget's on 12 May. It gets delivered by the Treasurer, not the energy minister and I don't talk about Cabinet considerations in the meantime. I mean, you are the energy minister, though.

Do you think gas companies and big multinationals are paying Australia enough for our gas? I think we can always look at what we're doing. As I said, we have increased the gas tax, the PRRT.

The Treasurer did a great job at that because it wasn't easy. It was controversial. The Liberal Party opposed it all the way.

He got that reform through. So, we have recognised that... that there's a need to get more out of those Australian resources. There is a lot of tax paid across the resources sector already.

I mean, we often hear about the other taxes that companies pay, whether it's company tax. But in terms of the PRRT, the Petroleum Resource Rent Tax, I mean, that was set up in the 80’s to make Australians would benefit from the oil and gas we own, but a lot of experts are saying it's not fit-for-purpose really when it comes to gas. Like, is it true that more than half the gas that we export is royalty-free?

And that's exactly why we put the tax reforms last term, because it has been in place for a long time. It wasn't working as well as we wanted. And again, against pretty fierce opposition in Parliament and, frankly, from the gas lobby, we did that.

But are we being taken a ride here? Like, are we missing out on billions, potentially trillions, of dollars? I think... look, I think that it's always very important to strike an important balance.

This is very important gas for the region. It's very important gas for ourselves. That's why Madeleine King and I are doing a reservation policy.

You've got to keep all your tax settings, you know, against all the various competing things the Government has to consider – our trading partners, our own interests, et cetera, et cetera. So, it's not a simple matter. I know some people say it's simple.

It's not that simple. It is something which is a legitimate conversation. But they're making a lot of money, Minister.

Generally, but I'm making the point that you cannot legitimately say, I think, post the bombing of Iran, that there's been a massive spike in gas prices, because that hasn't been the global experience. But they're still making a lot of money… Of course they are. Of course they are. …and there is a lot of concern that Australians are not getting enough.

Absolutely. Like, for instance, there was some figures out earlier this week that showed that Japan – which imports almost all of its gas, more than 95 per cent – it's making more from Australian gas than we are. Like, they've a tax on gas imports.

How is that fair for Australians? Well, I don't... as I said, our gas exports are very important. At the moment, you know, we are dealing with a fuel crisis where it's very important that countries in the region work together – whether it's fuel, liquid fuels, oil, diesel, petrol, or gas, we are all in this together.

So, all countries can say, well, this is where we're going to put ourselves, we're not going to consider the impacts in our region. We have a different approach. We have the approach that we will work with countries across the board.

We get a lot of diesel and fuel imports from the region. We do export a lot of fuel to the region, a lot of gas to the region – that's all true, I accept all that. It is Australian gas, that's why there should be a reservation – there should have been a reservation policy 20 years ago.

Second best time is today, and that's why we're doing it now. And I think we do have to recognise this Government, the Albanese Government, has substantially increased the gas tax already. I don't think, Dave, you can have this conversation without accepting that fundamental premise.

Okay. So we accept that, that there has been an increase, but it's nowhere near enough according to so many experts. Well, according to some people's views, and I respect that and understand that.

Well, let's hear from some of those, because we're talking about former Treasury secretary Ken Henry who said this week at an inquiry, just do it, in terms of putting on this tax for gas exports. He said, it's in the national interest. Stop the crap that the Australian public have put up with for decades now.

We've got the former head of the ACCC, Rod Sims, who says, it's perverse how little tax gas companies are paying. And we even have people who worked in the gas or the petroleum industry for decades, people like Idris Jala, who says Australia should use this global energy crisis to tax the windfall profits of gas giants, and that gas companies are not going to go anywhere, they're not going to leave.

Well, again, you can get many, many views on this topic. I accept all those views that those people hold. You will hear different views from different people.

As I said, I do not accept that there has been a massive spike in gas prices in recent weeks and months, because there hasn't been. So, if we’re going to have this debate, great – I'm all up for it, but let's have it based on facts. Yeah, but regardless of whether gas prices have gone up...

No, but sorry, Dave, you've suggested there's windfall profits as a result of the Iran crisis. There is no evidence of that. I'm saying that, across the board and over the last few years, decades even, it's very clear that a lot of Australians believe that gas companies have not paid their fair share.

The PRRT collected less than $1.5 billion in the 2023, ‘24 financial year when LNG exports were exceeding $70 billion. A lot of Australians across the political spectrum – whether they're Labor supporters, Liberal, the Nationals, Greens, One Nation, they vote independent – they're all saying, how is this fair? How are we letting this happen?

And they've also said, why is it the case that we have forecast gas shortages in Australia when we're a large gas exporter? Fair point, legitimate – we've taken that on board. And we're introducing a gas reservation policy – not universally popular, it's controversial, it's the right thing to do.

Wasn't universally popular when we increased the gas tax last term. Again, some people just want to ignore that. It's not the case.

We did it. It's been done. So, let's have this debate based on facts.

Yes, you've quoted some people's views - I respect and understand those views. There are other views on the other side of the equation. Government has to weigh all those things up in terms of substance and timing.

Is the Government worried about a backlash from the sector, from the industry? Like what happened with Julia Gillard when she was prime minister and was proposing the mining tax. Well, we wouldn't have increased the gas tax in our first term if we were timid on these things, but you got to make sure you get it right.

What about a backlash from voters? Is the Government ready for that if there's no new gas tax announced in this Budget? I think Dave, you know, you’re really asking me to pre-empt a Budget decision, which I'm just not going to do.

All right. Let’s hear from some of the audience now. We’ve got so many messages coming through on the text line.

Someone’s saying, now is the time, there’s no reason not to be brave and strong while there’s no valid opposition. What you have done is not enough, that person’s saying. Another person saying, this is an absolute cop out – he hasn’t answered a single question.

We should be one of the richest countries in the world, that person’s saying. Another person, Sarah, saying, we never get this tax back, it’s not renewable. We should have 25 per cent gas tax minimum.

And another person’s saying, it all depends on existing contracts. We made dumb deals a long time ago, changing prices is far more difficult than people think. All right.

This Hack, I’m Dave Marchese speaking with Energy Minister Chris Bowen. Minister. I want to move on to fuel supply now, because I know you’ve been giving an update on that today.

How much fuel have we got in Australia right now? 46 days’ worth of petrol, and we have around 30 days' worth of diesel, and very similar on jet fuel which is... on the petrol, that's 10 days’ more than we had when this crisis began, when the Iran bombing commenced. We also have 61 ships on their way to Australia, and we have locked in orders of 4.1 billion litres over the next four weeks to be delivered to Australia under contract.

So look, Dave, it's a very volatile and uncertain international environment. But this has been going on for quite a while now and we've been working pretty hard to get as much fuel into Australia as possible, and I'm pretty confident and pleased with how that's gone. Are we sure that we were ready for this supply crisis?

Because, you know, we're part of the International Energy Agency treaty, we’re supposed to have 90 days’ worth stockpiled but we haven't complied with that since 2012. We're the only country who's part of that treaty that's not complied. Why didn't we have 90 days’ worth?

Very different things, Dave, with respect – very, very different things. That 90 days’ is not held in the country, it's not about domestic supply. That's about having fuel to sell on the international market if prices get too high – we've done that, we've been part of that process.

But our domestic supplies were quite low. Well, they’re the highest they've been in a long time. And when we came to office, what we did... they used to be held in Texas, I changed that, we changed that.

We said, no, that's... there's not much point doing that. We'll hold them in Australia. Now, you could always look and say, well, what's worked here?

What could be done better? And we'll obviously... we'll do that. But, you know, we are pretty well placed.

We would have been... I accept, we would have been better placed if we had more refineries in Australia. Four of them closed over the last 10 years, that's regrettable – I wish that hadn't happened or at least some of them were saved.

But we still have two and we also have a strong supply chain. Minister, we're hearing from listeners who are really struggling. We've got one here saying, I live in rural Australia, drive 120km to work each way – I'm going to have to quit my job.

Another person saying they have quit already because they're spending more on fuel than they're paid each day. Someone is camping at work. Is there any real relief for these young Australians in sight?

So, I think it's important that – I understand exactly the point they're making and you're making – it's important to keep supply and price separate. So, you know, we've talked about supply and how much fuel we have coming to Australia, and that's my job to keep that supply up, coming to Australia. Price is a separate question.

The price of petrol will always predominantly be built around the price of oil internationally, and the price of oil is high. So, is there any real relief to help those Australians… Well, what we have done is… …in other ways? Whether it's not the price of petrol but any cost of living relief that they can turn to in the next few months and know that the Government's got their back and it's going to help them.

Well, we do have the backs of Australians. That's why we've cut the petrol tax and diesel tax by half – that's no small thing. We asked the states to reduce the GST, they agreed to do that.

We also have tax cuts coming in on 1 July, which builds on the other tax cuts we've delivered in the last few years, you know. And then you add to- all the other cost of living policies, we do recognise the cost living pressures that Australians are under, that everyone in the world is under so, yes, we have done all of that. And again, of course, we'll always look at what more can be done.

And just finally, do you have any message for young Australians who really are pretty annoyed with how the Government and you, as the Minister, have handled this fuel supply issue? Well, is that your suggestion, Dave – that you're annoyed or? No, that's the suggestion of listeners...

And what we're doing is ensuring that we have got maximum supply into Australia. We're also supporting Australians in the choices they want to make to move away from fossil fuels. In the meantime, what we're doing is providing that shorter term relief through things like the excise tax cut, the petrol tax cut, to help Australians in this difficult time.

All right. Energy Minister Chris Bowen, really appreciate you coming and speaking with the Hack audience. Thank you very much for your time.

Cheers, Dave. Thank you. We acknowledge the Traditional Owners of country throughout Australia and recognise their continuing connection to land, waters and culture.

We pay our respects to their Elders past, present and emerging.