COVID-19 Coordination Commission’s manufacturing taskforce wants to grow Australia’s gas industry to build post-pandemic economy

By Shannon Jenkins

Thursday May 21, 2020


State and territory governments should “remove barriers” to growing Australia’s gas market by cutting red tape and lifting fracking moratoriums, according to leaked advice provided to the National COVID-19 Coordination Commission.

The draft report revealed by Guardian Australia states the NCCC asked Andrew Liveris to lead a taskforce that would advise the commission on “growing manufacturing to become a cornerstone of the Australian economy”.

Liveris is the chair and former CEO of Dow Chemicals, and a director of global gas and oil giant Saudi Aramco. His role as special adviser exempts him from having to declare potential conflicts of interest, unlike the NCCC commissioners.

The NCCC’s Manufacturing Taskforce is comprised of union representatives Paul Bastian and Dan Walton, and Manufacturing Australia heads Ben Eade and James Fazzino. It also includes Dr Jens Goennemann from the Advanced Manufacturing Growth Centre Ltd, Innes Willox from Australian Industry Group, and Scott Wyatt from Viva Energy.

Read more: National COVID-19 Coordination Commission — who are the commissioners?

The taskforce has called for a “globally competitive gas market”. It argues Australia has a “clear opportunity to deploy [its] gas resources to reduce electricity costs, offer confidence to industrial gas users, and bring in new investors”.

The report recommends the federal government take a “non-operating equity position, minority share, or underwriting position” to help develop gas projects and pipelines between states. State governments, meanwhile, should introduce subsidy schemes for gas-fired power plants, the report says.

The taskforce presents two key measures to the NCCC: creating a globally competitive, sustainable new industry, and creating a globally competitive domestic gas market.

Three recommendations respond to the first measure.

1. Take a longer term view to create more value from our investments

The taskforce recommends the creation of a strong governance structure that is “anchored in legislation”, provides a 10-year development plan, and proposes tightly-drawn areas of competitive advantage.

The report also calls for a new Manufacturing Board, to report to the industry minister. The board would develop a 10-year policy plan for annual review, and would consolidate and prioritise “existing government interventions” based on agreed focus areas.

2. Drive rigorous implementation and measurement of impact

Industry Hubs should be developed, the report recommends, to be supported by the Manufacturing Board. The hub’s goals would be to “develop and commercialise products and technologies that allow Australian industry to compete globally”.

3. Support with structural reforms, starting with skills

The report suggests establishing strong involvement of industry in VET, including TAFEs.

“Fundamentally, industry must be engaged with the maintenance of competencies and their relevance to actual tasks and with the rigour of assessment. We also recommend the national alignment of qualifications, curricula and training with the needs of the workplace,” it says.

Another recommendation includes launching a national campaign to “change the image of manufacturing and showcase modern career opportunities”.

Read more: National COVID-19 Coordination Commission pay packets revealed

The taskforce’s second proposed measure, creating a globally competitive domestic gas market, contains six areas of recommendation across three phases.

Phase A: Remove barriers and build the bridge

1. Remove barriers: lift the moratorium in NSW, and the remaining moratoria in Victoria; initiate a rapid red and green tape reduction; establish a global best practice gas development regulatory framework in the Northern Territory.

2. Build the bridge in the near term: enforce “use it or lose it” provisions; provide support, such as low cost capital, to existing small and mid-cap market participants; establish a forward-looking gas reservation policy for NT and east coast developments; accelerated developments for highly prospective opportunities; coordinate with hydrogen development to ensure long-term demand potential (including avoiding demand destruction).

Phase B: Create the market, lower the cost, and complete the network

3. Create the market: Underwrite supply at priority supply-hubs, to “create the market”; compel price disclosure and reporting of differentials.

4. Lower the cost: revisit pipeline rates of return; reduce excessive duplication cost of infrastructure.

5. Complete the network: take active, participatory role in strategic pipeline developments; consider tax incentives for priority infrastructure.

Phase C: Scale and win

6. Proactively attract foreign-direct investment on demand side; provide policy stability that enables the market to thrive; establish an “evergreen” taskforce between AEMO and ACCC; work with financial service providers to create a liquid futures market; continue to coordinate with hydrogen.

Read more: ‘What climate policy?’: former top mandarins voice anger over Australia’s failure to tackle climate change


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