The gas industry has warned a deal between the Coalition and Senate crossbenchers to intervene in the sector could dent business confidence and threaten funding for the government's $158 billion tax cut package.
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The Morrison government on Thursday negotiated crucial support from four key crossbenchers for its three-stage income tax cuts.
Centre Alliance senators Rex Patrick and Stirling Griff said in return for their support, they had struck a deal with the government on gas market reforms, designed to curb rising energy costs in their home state of South Australia and along the east coast.
Full details of the package have not been announced.
However, Centre Alliance says they include adjustments to the export trigger, known as the Australian Domestic Gas Security Mechanism, to restrain rising prices.
The changes would also purportedly address a lack of market transparency and gas pipeline monopolies, and secure surplus domestic supplies from future gas projects.
But the gas industry's peak body, the Australian Petroleum Production and Exploration Association (APPEA), cautioned against such a policy overhaul.
"Market interventions could adversely affect confidence in the oil and gas sector as well as discourage new market entrants and supply diversity," chief executive Andrew McConville said.
"Ongoing investment is crucial for economic growth and being able to fund the very tax cuts federal Parliament is debating," he said on Thursday.
Investment will only continue if businesses are confident they can manage the risk associated with the investment."
APPEA cited Australian Energy Market Operator statements that gas supplies were adequate this year and said the export trigger would be reviewed in 2020 so did not need amending now.
The government's leader in the Senate, Mathias Cormann, who negotiated with the crossbench over the tax package, on Thursday rejected media reports that Centre Alliance had received a written guarantee of the policy changes.
Energy Minister Angus Taylor declined to comment on whether the government had committed to a gas price of $7 a gigajoule.
Earlier in the day, Senator Patrick had said the east coast price should be lowered to that level.
The export trigger was introduced by the Turnbull government in 2017. If a domestic supply shortfall occurs, producers may be instructed to limit their exports or find new sources of gas.
Australian Industry Group chief executive Innes Willox said under the export trigger, prices "have remained at painfully high levels" and a substantial response was needed.
He backed a "more aggressive" price-based export trigger but said that more information on the potential changes would be necessary.
- SMH/The Age