The best way to help the Tomago smelter, and every other electricity consumer in Australia, is to restrict gas exports.
Australia faces three options:
- One, leave the fate of the smelter and other heavy industry in the hands of the electricity market, risking its loss.
- Two, pay subsidies to Rio Tinto that have been estimated into the billions, increasing taxes or cutting services for other Australians.
- Three, make the multinational gas exporters supply gas at reasonable prices.
"The reason the fate of the smelter and gas exports are linked is because gas-fired electricity generators tend to set the price in Australia's electricity market," said Rod Campbell, Research Director at The Australia Institute.
"As pointed out by Peter Dutton and Chris Bowen during the election campaign, Australia exports a lot of gas. If gas exports are limited, Australia's wholesale gas price will come down and electricity prices will come down too.
"Aluminium businesses live or die based on electricity costs. So it looks like the Australian Government needs to choose between the interests of the gas exporters and aluminium manufacturers."
