AUSTRALIA’S energy crisis is having quite an impact on local business and is being seen as a significant issue that needs to be addressed, and with the Coalition Government recently releasing its onshore gas policy, Shadow Minister for Energy, David Southwick took some time out to visit the region last week, meeting with Gouge Linen & Garment Services to talk about how the new legislation could be of benefit.
The policy aims to help put the brakes on soaring gas prices that are currently hurting Victorian households and businesses, by providing cheaper gas and creating more jobs while protecting the environment and farmland.
The policy keeps Victoria’s fracking ban while securing the gas resources needed by creating a new royalty sharing scheme that will allow local landowners to benefit from gas produced from beneath their land. Landowners will receive a 10 percent share of the royalty paid to government of the net post-wellhead sales value of recovered gas.
The rights of landowners will be protected with a right of veto over conventional gas exploration and production on their land.
Gouge Linen & Garment Services processes 230,000kg a week, 25 million pieces a year, which comes to a cost of $57,000 to $58,000 a month on gas alone at the Mooroopna plant.
Gouge Linen & Garment Services director, Rob Priestly said, “This is a pretty significant issue.
“We have seen a very substantial increase in our energy costs and to some extent that’s going to have an impact on our customers as well. Our electricity prices have increased by about $100,000 a year and our gas is up by $200,000 a year.
“The greater and more concerning impact is on much larger users such as the food processors in our region. Their ability to be able to pass cost increases on to the export market is zero, so you’re really talking about industries that are already significantly suffering from compressed margins and having hundreds of thousands and sometimes millions of dollars increase in their energy bills.
“Anything that can be done that tries to provide secure, reliable and cost effective energy for an export business makes plenty of sense, so we would support a policy from anyone who can offer that. This new suggested policy by the minister is certainly a step in the right direction.”
Minister Southwick said, “Gouge’s story is the same story we are hearing from companies across Victoria.
“Ultimately it’s because they are experiencing tripling of energy prices, the sorts of energy increases that we haven’t seen before with no relief in sight.
“This policy that we’ve released this week will allow for more supply into the market and ultimately bring new entrants into the market that haven’t participated before to allow more gas, more supply and more competition.
“An onshore industry would be a game changer and bring competition to the big guys as well.
“We think it will be of big benefit to the Priestly’s business and other businesses going forward.”
Member for Northern Victoria, Wendy Lovell said, “Victoria’s history has been that our wealth has been built off the fact that we’ve had secure, affordable power in Victoria. That has lead for us to have manufacturing and food based businesses here in the Goulburn Valley.
“The current government’s policies of increasing the taxes on power companies by 300 percent of having a legislated moratorium on gas exploration has lead to a situation where this summer we are going to be facing severe energy shortages, and we’ve facing astronomical prices for our power and our gas. Something has to be done.”