Invest
Gas-led recovery will fail to fire
The government’s proposed gas-led recovery from the COVID-19 pandemic is based on unfounded claims, new research has revealed.
Gas-led recovery will fail to fire
The government’s proposed gas-led recovery from the COVID-19 pandemic is based on unfounded claims, new research has revealed.
The Morrison government has previously pushed for a gas-fired recovery, with gas providing a cheap and reliable source of power for consumers and businesses.
Nev Power, chairman of the government’s National COVID-19 Coordination Commission, has previously explained that cheap gas would benefit households and energy-intensive manufacturers who have been struggling under high gas prices for years and would also lower the electricity price and fast-track the transition to baseload renewable energy.
However, a report issued by the Grattan Institute has found that reports of cheaper gas are unfounded and that the government should move away from gas towards renewable electricity.
“The evidence is clear: over time, gas will decline, economically and environmentally,” lead author and Grattan Institute energy program director Tony Wood explained.
“Rather than indulging in wishful thinking or living in denial, the federal government and the gas industry – and its customers – should start planning now for a future without natural gas, or at least with a dramatically reduced role for natural gas.”
Mr Morrison has talked up a gas-fired recovery for manufacturing, but the report shows that eastern Australia faces inexorably more expensive gas.
Instead, the government might end up swimming against the tide by directly interviewing in the market, meaning taxpayers effectively pay for the gas through big subsidies.
“Even if the government could significantly reduce gas prices, the benefits to manufacturing are overstated,” the Grattan report states.
“The companies that would benefit most contribute only about 0.1 per cent of gross domestic product, and employ only a little more than 10,000 people. And much of this gas-intensive industry is in Western Australia, which has low gas prices already.”
Instead, Grattan points to the government replacing natural gas with hydrogen and other renewable-based electricity.
“Gas will play an important backstop role in power generation when the sun isn’t shining and the wind isn’t blowing, but this does not require large volumes of gas.”
“In the home, too, Australia must either replace natural gas with low-emissions substitutes such as biomethane or hydrogen, or switch to electricity, for heating and cooking,” Mr Wood concluded.
About the author
About the author
Economy
Australia’s competitiveness falls to 2-decade low
Despite a strong economic recovery from the COVID-19 pandemic, Australia’s global ranking on competitiveness has fallen to a 25-year low, as an overreliance on the mining sector and a lack of climat...Read more
Economy
Unemployment rate at 5.1% after faster than expected recovery
Australia’s unemployment rate has fallen for the seventh consecutive month in a sign of economic recovery. ...Read more
Economy
Consumer confidence is quickly pushing Australia’s economy from recovery to expansion
Both Australian consumers and property investors came out of last month feeling pretty chuffed about the economy. ...Read more
Economy
4 Aussie cities among 10 most liveable in the world
This year’s global liveability score has been strongly influenced by measures taken to stem the spread of COVID-19, with cities ranked according to how successfully they dealt with the pandemic. Per...Read more
Economy
Australia attended the G7 as a ‘green laggard’, new report shows
Following a weekend at the G7, Australia has been labelled a “green laggard” as a consequence of letting its green competitiveness significantly slide over the past two decades. ...Read more
Economy
Melbourne’s lockdown ends tomorrow
As announced, Melbourne will begin its path out of lockdown as of 11.59pm Thursday evening, but some restrictions will remain. ...Read more
Economy
GDP slows to 60-year low
Australia’s gross domestic product per capita growth has fallen to its slowest pace in at least 60 years, with the massive government spending looking to come at a ‘great cost to future generation...Read more
Economy
Recovery falters just a month after JobKeeper ends
The end of JobKeeper has seen a rise in defaults and administrations, which could hamper Australia’s recovery from the COVID-19 downturn, new research has revealed. ...Read more
Are you being priced out of the market? Have you got the Tuesday blues? And are you ready for the upcoming super changes?
Listen now
Are property prices set to crash? Should you jump on board the fintok craze? And how to prepare for this tax time
Listen now
Dissecting the budget and what it means for your equities, property and super
Listen now
Has the property market reached its peak; Biden’s climate summit and our sharemarket, and the upcoming budget
Listen now
Economy
Australia’s competitiveness falls to 2-decade low
Despite a strong economic recovery from the COVID-19 pandemic, Australia’s global ranking on competitiveness has fallen to a 25-year low, as an overreliance on the mining sector and a lack of climat...Read more
Economy
Unemployment rate at 5.1% after faster than expected recovery
Australia’s unemployment rate has fallen for the seventh consecutive month in a sign of economic recovery. ...Read more
Economy
Consumer confidence is quickly pushing Australia’s economy from recovery to expansion
Both Australian consumers and property investors came out of last month feeling pretty chuffed about the economy. ...Read more
Economy
4 Aussie cities among 10 most liveable in the world
This year’s global liveability score has been strongly influenced by measures taken to stem the spread of COVID-19, with cities ranked according to how successfully they dealt with the pandemic. Per...Read more
Economy
Australia attended the G7 as a ‘green laggard’, new report shows
Following a weekend at the G7, Australia has been labelled a “green laggard” as a consequence of letting its green competitiveness significantly slide over the past two decades. ...Read more
Economy
Melbourne’s lockdown ends tomorrow
As announced, Melbourne will begin its path out of lockdown as of 11.59pm Thursday evening, but some restrictions will remain. ...Read more
Economy
GDP slows to 60-year low
Australia’s gross domestic product per capita growth has fallen to its slowest pace in at least 60 years, with the massive government spending looking to come at a ‘great cost to future generation...Read more
Economy
Recovery falters just a month after JobKeeper ends
The end of JobKeeper has seen a rise in defaults and administrations, which could hamper Australia’s recovery from the COVID-19 downturn, new research has revealed. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
