How Morrison’s recession recovery plan ‘misses the mark’

The Morrison Government’s plan to use gas to fuel Australia’s economic recovery would have only a marginal impact on jobs, according to the Grattan Institute.

Sep 22, 2020, updated Sep 22, 2020
Prime Minister Scott Morrison says it is in the national interest to support Sydney through its lockdown. (Photo: ABC News: Ian Cutmore)

Prime Minister Scott Morrison says it is in the national interest to support Sydney through its lockdown. (Photo: ABC News: Ian Cutmore)

The institute’s Guy Dundas said that there were fewer than 1 per cent of Australian manufacturing jobs were in gas-intensive industries on the east coast and slightly more when WA’s isolated market was included.

Part of the Government’s plan was to unlock the Galilee Basin and the North Bowen Basin, which has limited infrastructure. The plan includes underwriting infrastructure and streamlining approvals as well as further developing a hub at Wallumbilla.

Prime Minister Scott Morrison is also threatening to build a gas-fired power station in the Hunter Valley if the private sector failed to replace generation capacity that was closing.

He said gas supported the manufacturing sector, which employed more than 850,000 Australians and was an essential input in the production of plastics for PPE and fertiliser for food production. In 2019, Australia was the largest exporter of LNG, with an export value of $49 billion.

“Low gas prices also drive down electricity prices, benefiting all Australian households and businesses. Gas complements our world-leading renewables sector by keeping the lights on when the sun isn’t shining and the wind isn’t blowing,” Morrison said.

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However, the Grattan report, which is yet to be published said about two-thirds of the gas used in manufacturing was consumed at just 15 facilities that together employ just over 10,000 people.

The think tank’s report said gas accounted for about 10 per cent of input costs at the 15 facilities and less than 0.5 per cent across the manufacturing sector.

According to Dundas, about 60 per cent of the gas-reliant manufacturing jobs were in Western Australia where the price was about $4 a gigajoule – roughly half that being offered in contracts on the east coast.

He said there were only between 4000 and 5000 jobs in heavily gas-reliant manufacturing in the east, which was a focus of the Prime Minister’s announcement.

The gas plan has been welcomed by the industry which said it was a good first step to reinvigorate Australia’s oil and gas sector.

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