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On the price of gas

Chief Executive Australian Pipelines and Gas Association Cheryl Cartwright writes: Re. “The gas cartel price-gouging us into ‘energy poverty’” (yesterday). International gas prices and the international market is far more complex than suggested in this article. There are price pressures in Australia mainly because a substantial amount of the gas that might normally have been directed to the domestic market is being redirected to meet export contracts. Coincidentally and unfortunately the low international price has reduced expenditure on exploration in Australia.

The ACCC report found that gas transmission prices have not risen by more than inflation. Suggesting that regulating gas transmission would reduce prices flies in the face of the dramatically increased regulated prices of energy infrastructure that is regulated by the Australian Energy Regulator — a division of the ACCC. The Gas Access Regime provides a mechanism for pipeline companies to be challenged on pricing. Rather than complaining to the regulator, it would be sensible to challenge the pricing. Being regulated is costly for business; they would prefer to negotiate.

Pipeline prices are NOT a major driver of gas prices in Australia. Data released in February this year by the Commonwealth Department of Industry in its 2016 Gas Price Trends Report shows that pipeline tariffs comprise 10-15 per cent of the costs of gas for industrial users everywhere except Tasmania. In its 2016 State of the Energy Market Report, the AER found that pipeline tariffs are 5-10 per cent of the costs of gas for residential customers.

For information, here is the data from the Commonwealth 2016 Gas Price Trend Report on the price of gas to industry.

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On Mediscare

Ben Marshall writes: Re. “Well done, ‘Mediscare’, onwards to the glorious future of ever-worse campaign lies” (Friday). It’s dismaying to see Crikey continue to promote Coalition/ Murdoch lies as unquestioned truth.  Toby Ralph’s piece adds to Crikey’s record of spreading the ‘mediscare’ meme while continuing to forget journalistic due diligence.

Was Labor’s claim that the Coalition want to privatise Medicare a lie? Well, no – it’s not a lie.  It’s an obvious and unremarkable comment, based on what the Coalition have done to what’s left of our public health system.  Of course the Coalition want to privatise Medicare.  That they can’t directly do so for fear of political backlash is equally obvious.  That they are making every effort to privatise every other aspect of public health is on public record. If the electorate are scared, it’s not because Labor are making political capital out of Coalition policy, it’s because they have good reason.

Peter Fray

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Peter Fray
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