After the federal government’s announcement late last year of price caps and interventions into the gas sector, the Mayor of the Western Downs Regional Council led a delegation to Canberra to discuss the impact this policy was already having on locals and to share his concerns of what the long-term unintended consequences could be for the region, including potential job losses.
The delegation included Daniel Fletcher, Acting CEO of the Western Downs Regional Council and Ali Davenport, CEO of economic development group Toowoomba and Surat Basin Enterprise (TSBE).
In the Western Downs, there is concern that this policy will cause the gas companies to view Australia as high-risk and reduce investment or pull out of regional operations entirely. Jobs in regional areas are difficult to generate, and the gas sector employs almost 1,000 people in the Western Downs directly and up to 3,000 indirectly, making it one of the most important pillars of the economy. “With almost one in four local people directly or indirectly employed in gas, we are very concerned about what these government policies could mean to the future of jobs in our region, which is why we took our message to Canberra,” said Mayor Paul McVeigh.
Queensland Resources Minister Scott Stewart has also previously publicly expressed concerns about the impacts gas interventions could have on the Queensland gas industry.
“In Queensland we have taken the sensible approach, ensuring there is gas supply for the eastern seaboard by actually developing our gas industry while securing supply for the domestic market and creating good jobs in regional Queensland,” he told the Australian Financial Review.
The delegation met with the Office of the Prime Minster as well as the Hon Kristy McBain, Minister for Regional Development, Local Government and Territories who explained that the federal government’s interventions into gas were primarily introduced to protect the manufacturing sector.
When the group voiced concern that the government intervention was likely to lead to a decrease in investment which would cause significant local job losses they were told “we don't believe this will happen”. Mr Fletcher said, “we told the government that the impacts were already happening. I’m getting calls from local companies struggling to get finance due to uncertainty in the gas sector, and many local companies are pulling job advertisements because they are already seeing the impacts. For the government to tell us there would be no impacts in our community from this policy is plainly incorrect. It’s already here, and we fear this is just the start. Gas underpins a huge portion of our economy, and this intervention will significantly impact our community”.
Toowoomba and Surat Basin Enterprise CEO, Ali Davenport said, “for a company like Senex to put a $1 billion project in our region on hold, that speaks volumes of the impact of this intervention. We’ve also had local businesses tell us about their orders that are now on hold or cancelled - everyone is waiting to see what the government introduces next for gas which has created a lot of uncertainty for our region.”
The delegates asked the Canberra officials whether the thousands of jobs across regional Australia had been considered when the government made the decision to intervene in gas, only to be told that the Regional Development Minister had not been involved in the policy decision process. "We were quite shocked that the government had not consulted internally with the Department of Regional Development, considering this policy will significantly impact regional Australia more than anywhere else. We feel that this intervention was introduced too quickly and without genuine engagement with the communities which will potentially be most impacted.” said Ms Davenport.
The delegation was also concerned with the language used by the government officials to describe the gas sector, using phrases such as “price gouging” and “wartime profiteering” in reference to local operators.
Mayor McVeigh said, “We’ve had gas in our region for over 15 years since the Surat Basin was developed. We know the people who work in the gas sector and the CEO’s of the gas companies as they consult with us regularly and are part of our community. We know the highs and lows this sector has endured and the many times over the last 15 years when they have lost money due to the price of gas, including during COVID. To hear the whole sector demonised because they are currently making a profit doesn’t seem fair and doesn’t take in the whole picture of the cost and risk to produce gas or the fluctuation of prices”.
Ms Davenport added, “even at the height of COVID when the gas price plummeted and the gas companies were losing money, not once did the gas companies make any statement about reducing investment or shedding jobs. Now they are. We feel the government doesn’t fully understand this industry and could unwittingly be putting communities like ours at risk.”
The delegation also met with Federal Resources Minister Hon Madeleine King who strongly supported the gas sector and understood its value to the Western Downs and other regions across Australia.
"The meeting with Minister King was positive. She gets it. She knows what the gas sector means to the Western Downs, and she understands that jobs in regional areas are difficult to generate and must be protected," said Mr Fletcher.
"The gas sector underpins our regional economy and there is nothing the government could do to replace it – there is no other industry like it on the horizon and no amount of compensation or government programs could deliver the jobs and social support that the gas sector does. These are people's livelihoods we’re talking about. We urge the government to take our concerns seriously and to ensure regional Australia has a seat at the table with all decisions that can impact us.” said Mayor McVeigh.
