Interview with Sally Sara, ABC Radio National

Website search Interviewer Interview discusses Gas Reservation Scheme, and Private health insurance reform. SALLY SARA: Sally Sara with you for Breakfast. Well, the Federal Government has introduced legislation to Parliament that will force gas producers to set aside up to 20 per cent of supply, slated for export, instead for the domestic market.

The Coalition has signalled it wants to work with the Government on the scheme but has concerns about future gas supply and investment, while the Greens cite loopholes in the proposed structure. Madeleine King is the Federal Minister for Resources and Minister for Northern Australia and joins me now. Minister, welcome back to Breakfast.

MINISTER MADELEINE KING: Good morning, Sally, it's great to be back on. SALLY SARA: Before we get to gas reservation, the Greens, the Coalition and the crossbench have thrown out the Government's proposed changes to private health insurance rebates for over 65s yesterday. The Health Minister, Mark Butler, has flagged the Government will reintroduce the same legislation today.

Why not exclude pensioners from this change given that that seems to be the main concern? MINISTER MADELEINE KING: Well, it's really important for listeners to understand that Australians over 65 will continue to receive the rebate relevant to their income. Now this change means that all Australians are going to get the same private health insurance support based on their income, not their age, and that's an important part of this.

So, what we have seen last night is the Coalition and the Greens teaming up again to really be quite destructive of budget and budget savings, important principles that they ‑ well, certainly the Coalition say they want to follow around responsible fiscal management, yet they want to blow the place up. In one moment, they want to save money and the next moment they just want to keep spending money.

So, we will be reintroducing this bill; it's an important part of our budgetary process, as well as making sure that every dollar saved will be reinvested to deliver more aged care beds. And that's really important for aging Australians right around the country. SALLY SARA: The Shadow Health Minister, Anne Ruston, said that Mark Butler should take the hint and drop the proposal for good.

Is the Government confident, and why is the Government confident it will be able to negotiate with the Greens for their support? MINISTER MADELEINE KING: Well, I'm going to leave the negotiations, as you'd expect, to the Health Minister and the Minister for Aged Care, and they'll go through those processes. But it is an important reform, and I'll say it again, because this is a vital part of the whole plan, is that the dollars that will be saved from this are reinvested into more packages and better care for older Australians, and that's a priority of our Government.

SALLY SARA: You're listening to Radio National Breakfast. My guest is the Resources Minister, Madeleine King. Minister, turning to the proposed Gas Reservation Scheme, the Government has designed the scheme to ensure to a "modest domestic oversupply of gas".

What impact does the Government believe that will have on prices and on investment? MINISTER MADELEINE KING: Yeah. Well, the modest oversupply and the Gas Reservation Scheme, I mean, this is a landmark reform; it's an important structural reform, but it also aims to make sure we have an enduring regulation around the gas market across the country but principally focused on the issues we've seen in pricing and supply on the East Coast.

So, the modest oversupply is what it says; it's about getting more gas into the system to put downward pressure on prices. But I have to be clear, this oversupply will be demand-calibrated. So, this is a lot for early in the morning; I do get it, the Australian Energy Market, the AEMO, will do their normal studies through the Gas Statement of Opportunities, which do very well‑thought out, well‑researched forecasts industry participates in, and that will then inform the demand calibration that the Australian Energy Regulator will set about in adjusting domestic supply obligations to each of the exporters.

SALLY SARA: You haven't outlined by how much the Government expects gas prices will fall under the proposed Reservation Scheme. Can you guarantee that the prices will fall if the scheme is implemented? MINISTER MADELEINE KING: What I will guarantee is this will be an enduring regulatory framework, and we expect fully that it will put downward pressure on prices, and that's what happens when you get more gas into the market, and that's what we expect will happen.

We haven't produced ‑‑ SALLY SARA: But you can't guarantee that? MINISTER MADELEINE KING: What we have done in the past in response to the energy crisis in 2022 was to introduce a price cap, and that was a really important, really important thing to do at that moment when the gas industry itself really didn't understand the Australian people, and what it needed, when it offered gas into the domestic market at over $60 a gigajoule.

We brought that down to $12. And right now, and indeed for the last six months, gas has stayed around between about $10 to $12 a gigajoule on the East Coast. We expect with this oversupply we'll keep that downward pressure on that pricing into the future.

SALLY SARA: What about the situation for Santos, which already buys some gas from the domestic market to meet its export contracts; how does the system accommodate that? MINISTER MADELEINE KING: Well, Santos is one of the operators - one of the exporters that runs out of the Gladstone LNG, that's the name of that facility. And to be honest, in our negotiations with them under the regime we're replacing through the Heads of Agreement, they've been quite helpful in shaping their supply contracts to make sure domestic gas did feed into the domestic market.

Into the future, as with all LNG exporters, we will be respecting existing export contracts, because it's a really important principle. So, the ministerial discretion ‑ and I know there's a lot of discussion about that discretion ‑ we'll be able to moderate how those exporters are able to account for domestic gas. But everyone ‑ every exporter will have to contribute to domestic supply in some fashion.

SALLY SARA: The Coalition is also worried about how the proposed scheme will affect investment. How willing is the Government to amend the proposal to secure the support needed to get it through Parliament? MINISTER MADELEINE KING: Look, we'll work with everyone, and we've had good discussions with the Coalition.

I think everyone accepts that the market system we have at the moment, which has been built up over many years over successive governments basically in response to various crises, is not something that is durable or we should keep pursuing endlessly. So, we are agreed on that. We are also agreed on the fact that we need to make sure there is a good domestic supply of gas into the eastern market in particular, which is the one that's under the most stress around shortages.

So, we'll keep talking about the Coalition on this. SALLY SARA: Minister, just ‑‑ MINISTER MADELEINE KING: And the Greens, for that matter. SALLY SARA: Just finally, Labor is midway through a second term of Government.

Things are pretty tough for the Government at the moment as it tries to push through its economic program. Are you feeling the pressure, and is there frustration among your Caucus colleagues with what they're hearing from members of their electorates? MINISTER MADELEINE KING: I mean it is always difficult through the middle of a term, it's always challenging being in Government, it's never particularly easy, but we don't get into these positions or ask for these responsibilities to have a simple life, and it's a challenging ‑ countries are challenging to run, but I think my Caucus colleagues, my colleagues in the Cabinet and the Ministry are all of one purpose, is that we want to build a better future for Australia, and that's what we're committed to doing every single day of our time here.

SALLY SARA: Minister, thank you for joining me this morning. MINISTER MADELEINE KING: Pleasure, Sally, thank you. SALLY SARA: Madeleine King is the Federal Minister for Resources and Northern Australia.

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