JANE NORMAN: Well, to get the latest on the government’s deliberations I spoke to one of the ministers sitting around the cabinet table, Resources Minister, Madeleine King. Madeleine King, welcome to the program.

MADELEINE KING: Great to be back, Jane. Good to be here and good to see you again.

JANE NORMAN: Likewise, thank you. Look, when the government first started formulating a market intervention could you anticipate just how complicated it was going to be?

MADELEINE KING: I think every minister involved in this and ministers that are sort of associated with it do understand the complexities. It’s been a market that’s, you know, clearly developed since European settlement and obviously gets complicated the more and more people that come into a market, the more manufacturing you do, the more demand there is for energy for housing, but equally as a power source for manufacturing. So, I don’t think anyone was unaware of how complicated it is, but because of its complexity, it does need a thoughtful response and not a knee-jerk reactionary response. And that’s what this government is focused on. And, you know, I know there’s been some commentary about it’s taking some time, but to be honest, in a system of government that Anthony Albanese oversees as Prime Minister and of which I’m in the cabinet, I’m really grateful we’re taking that time because you really need to work through it, to look through the unintended consequences, have all the departments working together. And that’s exactly what’s happening. So, it’s a good process. You know, we will get to a resolution for the benefit of Australian consumers and manufacturers, but we are going to make sure we do it very carefully.

JANE NORMAN: So, there’s speculation that cabinet will have another look at its plan this week before there’s national cabinet next week with the PM and state leaders. Is that how soon we might see a response here?

MADELEINE KING: I’m not going to foreshadow or go into cabinet discussions, but needless to say we’re working on it around the clock.

JANE NORMAN: All right. Well, let’s look at one of the options on the table – and that is a price cap on – well, a cap on gas prices and coal prices. The Australian Workers Union has come out today and again restated its call for that intervention. How would the commonwealth actually cap prices on gas and coal?

MADELEINE KING: Yeah, well, you’ve said it’s quite complicated, and it is. And it is an option on the table, but it’s one of many. So, I wouldn’t want anyone to get excited either way that that is what the government’s settling on. What we’ve seen is there an extraordinary – extraordinary – rise in the price of gas. And equally for coal. And coal and gas do different things in our economy as well. So, coal for the most part in Victoria, New South Wales and Queensland, you know, power the coal generators that power people’s houses and gas plays a top-up role, so to speak. And then its main role is in heat sources for manufacturing. So, there are two different things they’re trying to do. They’re also vastly different commodities. Gas is gas whereas coal has different calorific levels. So, some is good for export, some is not so good for export, some is good for some power generators and some is not so good for all power generators. So, all these things have to be considered. Price capping is but one option, and that’s why, as I said before, the government needs to be very considered on this and very precise in its response.

JANE NORMAN: What would your concerns be with a price cap? Steven Kennedy the Treasurer Secretary has said an unintended consequence could be that people stop investing in things like coal and gas at a time when we need more supply.

MADELEINE KING: Yeah, look, to be honest with you, none of these things are what we actually want to be doing at this stage. We want to be focusing more on investment in renewables and building a transformation of our energy grid. But, you know, we are where we are. There’s a war in Europe. There has been a decline in supply. There’s been failed energy policies – some 22 of the former government. So, we’re in a position we’re kind of forced into, but we’re not, you know, shirking the responsibility of dealing with it. You know, unintended consequences abound. And practically in every policy area, I might add, and that’s why thoughtfulness is important. But in this area, as has been pointed out by many commentators that there is a risk of investment. Also, there’s a risk that if you make gas too cheap you divert investment from renewables, and we really want investment in renewables in this country because this country is now committed to net zero emissions by 2050. So that’s just a couple of unintended consequences. I dare say there are more. And I think any response in a crisis – and this is a crisis that we’re in - in energy prices – you know, may need to adapt into the future as well so that we don’t – you know, we’re not blind and that if things do come up this government will deal with them.

JANE NORMAN: So, the AWU wants a price cap on domestic gas wholesale prices. At the five-year sort of average spot price of about 8 to $10 per gigajoule. Would you look at 8 to $10 per gigajoule? That’s apparently the price of production. Or would you look to that a bit higher so that you don’t, you know, I suppose investment away from renewables?

MADELEINE KING: We’ve got analysis being done on this right now. There is – the AWU makes a good point. Theses are the historical prices. Equally, prices for many inputs are going up right around the country. People know the fuel in their car is going up. In agriculture we know the cost of fertilisers are going up. So, things are going up, and that includes gas. It’s just gas and coal are going up way too fast for our economy to withstand if they remain unchecked. So, you know, there’s a lot of very smart people, very thoughtful people looking at the level of the price cap.

JANE NORMAN: And in terms of price caps, would it be just a commonwealth issue or is it something that you might need the state premiers to buy in on in terms of state legislation?

MADELEINE KING: Yeah, it is possible. And the thing is, you know, we want to work with the states on this. And it’s, you know, limited to a number of states. It’s the east coast states. So, you know, regardless of whether it’s a commonwealth legislation, we would still want to keep the states informed of our plans. And, you know, they quite rightly point out what they think is a difficulty with it. And that’s totally, you know, reasonable. So, we will keep in contact with them. If we think the solution lies within the states’ jurisdictions, then undoubtedly we’ll talk to them.

JANE NORMAN: In terms of another intervention, The Australian reports today the government is looking at direct subsidies to help households and manufacturers pay their power bills. Is this on the table? Because it was my understanding that the government had ruled out things like direct subsidies fearing it could only add to inflationary pressure.

MADELEINE KING: It’s a good point that too much cash into the system does add to inflationary pressure. I know Philip Lowe said what might help is more supply in the market, that would help reduce that inflationary pressure because it would bring down gas prices.

JANE NORMAN: Is that your view as well?

MADELEINE KING: Yes, it is my view. And, you know, we see where there is adequate supply, I mean, sort of more competition among gas providers and producers into the market. And that’s why the heads of agreement managed to have an oversupply so that would be a competitive bid for a lot of gas and would help to bring down prices. We need to do better on that, and that’s what the government’s working to. But to come back to your point about the subsidies, the truth is we’re looking at everything. And at the moment – and I know there’s lots of commentary on what we may have ruled in or out, but the truth is because it is so complex, we do have to consider everything. And to be fair, some things that at one stage we might have thought not possible, you know, maybe we need to rethink these.

JANE NORMAN: And could that be the case, direct subsidies? Is this something –

MADELEINE KING: I’m not going into the details of the discussion. But, needless to say, we’ll consider whatever might work.

JANE NORMAN: And in terms of supply, we know that Dan Andrews, the Victorian Premier, he’s won his election now.

MADELEINE KING: Yes.

JANE NORMAN: Is it time to start putting pressure on states like Victoria to actually increase exploration, increase gas, noting that offshore gas reserves in Victoria are starting to effectively dry up?

MADELEINE KING: Yeah, and congratulations to Premier Andrews and his whole team. It’s a great effort in Victoria for Victorian Labor. Each state has to make their own decisions. They’ve got their own constituencies and they have their own expectations around what their full mix will be. And I understand that. Clearly the situation in – well, the views in Victoria are vastly different to my home state of Western Australia. And I think everyone can accept that that’s okay. So, Victoria is investing in offshore wind power and onshore wind for that matter, also hydrogen projects in the Latrobe Valley –

JANE NORMAN: So, at a time when there’s a gas shortage, we have states like Victoria that have effectively got a moratorium on gas exploration. Is it time for premiers like Mr Andrews to actually reconsider that?

MADELEINE KING: Well, they recently did lift their moratorium on conventional gas. So, I’ve no doubt that the government is thinking about that. The new resources minister hasn’t been appointed, and we’ll have a chat about what they want to do into the future when the happens. But, equally, it’s Victoria’s choice, and Victoria – and I know the Premier would understand this – they of course have an obligation to secure energy supplies for their constituents and the whole population. So, whether that’s coal as it is now, which provides most of the power to Victoria, or gas or wind – and they’ve got a huge investment in renewables, which is to be respected and admired – that will be a matter for the state government.

JANE NORMAN: And just to finish off, in your home state of Western Australia, a gas leak has stopped production from a platform off the WA coast. WA Today is reporting that it’s the main platform supplying the Varanus Island processing facility which supplies about a quarter of WA’s gas at any sort of given time. What is the latest on this? We know that the platform itself has been evacuated.

MADELEINE KING: Yes, it was evacuated quite quickly and turned off and everything was depressurised, and all safety measures taken and the supply stopped, which is very good. Santos acted very quickly. They’re the owner and operator of that platform. So, it will affect supply to some extent, but it appears like it’s a very small leak, which is not to diminish the significance – the seriousness of it and the environmental concerns which NOPSEMA and my office will be looking at very closely and very seriously. And NOPSEMA are on site as well, I might add, checking this all out to make sure there is government oversight. I’ve been in touch with Minister Bill Johnston’s office as well as NOPSEMA as well as Santos, the operator. We’re assured it shouldn’t affect supply into Western Australia, but I’ve no doubt that Minister Johnston will be keeping a very, very close eye on that. We’re going to a hot summer in WA.

JANE NORMAN: All right, Madeleine King, thank you for your time.