PETER STEFANOVIC: Joining me now is Energy Minister Angus Taylor. Minister, good morning to you. Thanks so much for joining us. So, a few things to point out on this ACCC report that I want to raise with you. So gas prices are falling but supply it says will tighten next year. Are you concerned about that?

ANGUS TAYLOR: The point they make is that gas prices are coming down. We need to see that flowing through to contracts, to longer term contracts. And as you rightly point out, there's more of a challenge with supply in the southern states than in Queensland. We've seen record supply of gas in Queensland, but in the southern states it's a challenge and that's why we need to see state governments approving new gas coming forward, like the Narrabri project in New South Wales. We've done a deal with the New South Wales government for 70 petajoules of gas to come through in the near future and that's extremely important as the ACCC rightly points out for gas prices in the southern states, and that's obviously important for households. Gas is playing an important role for the electricity market and for manufacturing of course, where gas is a crucial feedstock.

PETER STEFANOVIC: But if supply tightens next year, wouldn't that stand to reason that prices would go up?

ANGUS TAYLOR: Prices are now reflecting international prices more and more, and this is an important point. The international market for gas has changed dramatically in recent years. The US is now a major exporter. Even three years ago it wasn't. And that means domestic prices need to reflect those international prices. That's the point the ACCC makes. We strongly agree with that. We have a Heads of Agreement with the industry now. It's due to expire by the end of the year. We want to see international prices being reflected in domestic prices, not just in the short term, which is happening now, but in the longer term for contracts.

PETER STEFANOVIC: Well that's the other point that the ACCC is saying. It's concerned about this widening divergence between domestic and export markets, in that domestic prices have not followed LNG net back prices down. You must be worried about that too?

ANGUS TAYLOR: Well, they have been following. In the short term, we want to see them following for contracts, and this is crucial for manufacturing. Look, one of the reasons why we're seeing a reduction in electricity prices now is because we are seeing short term gas prices reflecting that international market. We need to see longer term gas prices reflecting that international market. This is absolutely crucial. As I say, we're working towards a revised Heads of Agreement towards the end of this year. That will be important for the gas producers to do the right thing. But at the same time, we need to make sure our gas producers are competitive, t coming for, supply is coming forward, that states do the right thing, the moratoria are lifted and that we're able to get that ready supply of gas, particularly in the southern states where we- where there are more challenges.

PETER STEFANOVIC: Will there be enough supply?

ANGUS TAYLOR: Certainly there'll be enough supply. The question is where it comes from, Pete. So it may have to come from the north. We'd like to see more gas in the south and that's why the Victorian Government raising its moratorium, which is good news - it's only partial, we'd like to see it fully raised. And the New South Wales Government working towards approval of new gas supply. We'd like to see the Narrabri project approved. These are important steps along the way to make sure there is enough supply over the long term in the southern states.

PETER STEFANOVIC: If prices at a commercial level, though, get too high, what's the longer term ramifications of this? I mean, for those commercial businesses that do rely on so much gas, would the expectation be that many of them might not be able to afford it and just fold?

ANGUS TAYLOR: I don't think the issue is gas prices going higher. I think it's making sure they come down to the level where we're seeing international prices. We're already seeing them coming down in the spot market and even softening in the contract market, but we need to see them go all the way. Now, if they don't, it means our manufacturers are uncompetitive internationally. And look, we have this extraordinary manufacturing sector that's energy intensive - our aluminium smelters, plastics, manufacturing, and range of other important sectors, foundries - that rely on affordable reliable energy and gas as a feedstock. We need to see this come down. But we need all sides of politics getting in behind this too. It's good to see Bill Shorten supporting the gas industry on the weekend. We need to see the whole Labor Party supporting gas because it's crucial for our manufacturing base and for our economy.

PETER STEFANOVIC: What do you make of those divisions because Anthony Albanese doesn't have the same view?

ANGUS TAYLOR: We strongly welcome Joel Fitzgibbon, Bill Shorten, Matt Keogh, a range of other, Kim Carr, range of other Labor members who are supporting the gas industry, who want to see lower gas prices, who want to see a strong manufacturing sector. But we need to see Anthony Albanese and Mark Butler joining them. I mean this is crucial for this country. We need a bipartisan approach to gas and to energy more generally - affordable reliable energy. It seems like an obvious thing coming out of COVID that all sides of politics should support that, and that means an ample supply of gas, raising state moratoria, appropriate infrastructure going into place. All of this needs to happen to make sure we have a strong manufacturing sector, and affordable energy for households and small businesses.

PETER STEFANOVIC: Well, I mean COVID is having such a huge impact that Australia is now no longer the world's top exporter of LNG. How much of a concern is that for you?

ANGUS TAYLOR: Well, we only became the top exporter a short while ago and I think we have every prospect of remaining a very major exporter for many years to come. But we have to have a competitive industry. We have to have approvals coming through from state governments. And we have to have government at all levels supporting the future of this industry. That means that Anthony Albanese and Mark Butler need to get in behind. There are very sensible other members of Caucus who are backing this. Look, you know, unions like the AWU fully understand the crucial role of the manufacturing sector and we need Labor getting in and supporting this critical industry.

PETER STEFANOVIC: Do you have any concerns about the Northern Territory possibly reinstating a ban on fracking? This has come from the Territory Alliance.

ANGUS TAYLOR: Well we do. I mean, we, of course, have worked very closely with the Territory Government to make sure that that there is more gas coming on, that there's strong support for the gas industry in the Beetaloo and McArthur Basins. This is one of the most prospective areas for oil and gas in Australia. It has extraordinary potential and it's been good to see the support we've had from the Northern Territory Government. We want to see that continue and we want to see this to continue, the strong support for gas and all sources of energy over the coming years, and that includes the Northern Territory where we have one of our best prospects in Australia.

PETER STEFANOVIC: Alright. Energy Minister Angus Taylor, appreciate your time this morning. Thanks for joining us.

ANGUS TAYLOR: Thanks for having me, Pete.