Calls for a price cap on gas are being taken seriously by the federal treasurer, ahead of a predicted rise in energy prices.
With gas prices expected to rise by 40 per cent during the next two years and retail electricity prices by 56 per cent, Jim Chalmers said all options were on the table to reduce power bills.
“We are contemplating the kinds of steps that governments wouldn’t have contemplated a year or two ago,” he said on Sunday.
“You can go down the path of tax, you can go down the path of direct support to households, we don’t want to rule out those kinds of options, but our immediate focus is on the regulatory side.”
Dr Chalmers said he took seriously calls by former consumer watchdog head Rod Sims for gas prices to be capped. He indicated talks had been taking place on other measures that could be introduced.
Among them was a mandatory code of conduct for gas companies, and while the code had been concerned with supply levels of gas, the treasurer said it could also extend to prices.
“We don’t really want to limit our options or narrow our options,” he said.
“There’s a lot of working going on behind the scenes, a lot of consultation and collaboration, and if there’s something sensible and responsible and meaningful we can do here, obviously, we will consider that.”
The government committed before the election to lower the average household power bill by $275 a year by 2025.
However, this is unlikely to be achieved, due to volatility in energy markets caused by Russia’s invasion of Ukraine.
“We are always recalibrating our expectations for electricity price rises,” Dr Chalmers said.
However, opposition employment spokeswoman Michaelia Cash said shoring up further supply of gas was just as critical along with a price cap.
“All a price cap will do is actually discourage players from bringing on supply,” she said.
Victorian Premier Daniel Andrews said the rising energy prices from the war in Ukraine reinforced the need for a domestic gas reserve.
“What gas companies are asking us to do now is pay European prices for our gas,” he told reporters in Melbourne.
“We need a national domestic reserve so that our gas is for our businesses and households first, and the bit that we don’t need sell to the world.”
© AAP 2022
