It finds domestic diesel, petrol, gas and electricity prices will all rise, which will push up the prices of a broad range of products and services almost immediately.
From a diplomatic point of view – as Canadian Prime Minister Mark Carney reminded us last week – Australia could use its influence as a 'middle power', with global influence and a close relationship to the US.
Key findings:
- Global energy prices will increase.
- Gas, electricity and petrol prices paid by Australian households will rise.
- Multinational gas companies exporting Australian gas will profit.
- Australian governments will raise very little extra revenue.
While Australia is not a major oil producer, it is the second biggest liquefied natural gas exporter in the world. Unlike other energy superpowers, Australia does not receive a significant tax or royalty benefit when prices rise. The situation is worse for Australian consumers, who will pay surging world prices for Australia's own resources.
Key recommendations:
- Divert 'uncontracted' gas away from the export market and towards Australian domestic use.
- Ensure none of Australia's gas is given away for free by imposing a 25% export tax on all gas exported from Commonwealth waters, as proposed by the ACTU.
"Like all wars, what's unfolding in the Middle East is a humanitarian disaster," said Richard Dennis, co-CEO of The Australia Institute.
"It is also an economic disaster, which will impact Australian households.
"Australians could and should be shielded from the worst economic consequences of this war.
"While the largely foreign-owned gas companies exporting Australian gas will make billions, Australian families will suffer.
"Australian nurses pay more tax than gas exporters. Australian beer drinkers pay more than gas exporters. Australian students pay more in HECS repayments than the gas industry super profits tax raises. If ever there was a time to stop Australia's enormous gas giveaway, it is now.
"Australia has significant diplomatic and economic power and a close relationship to the US. For decades, Australia has played a role in creating and upholding the international rules-based order.
"Rather than meekly supporting the US and Israel's military action in the Middle East, Australia could use its influence to help bring peace."
