June 28, 2022

Plastics boss dreams of cheap gas

“We need to keep a pulse in the business and get past the ‘death valley’ that is immediately in front of us. We will need direct support to do this,” he said.

The firm is the only polyethylene manufacturer in Australia and has about 1000 employees and contractors working at its factories in Victoria and New South Wales. It produces plastics for food packaging, such as milk bottles, and for the automotive, water, mining and waste-management industries.

The manufacturing sectors the government wants firmly established within a decade include resources and critical minerals, food and beverages, medical products, recycling and clean energy, defence and space.

The Prime Minister placed a particular emphasis last week on sovereign security after the coronavirus pandemic exposed shortcomings in the supply of critical goods.

‘Home ground disadvantage’

“We are pleased to see the obvious choice of food, chemicals and plastics as priorities … and the government’s intention to address offshore supply chain vulnerabilities in these areas,” Mr Bell said.

But top of Mr Bell’s wish list was for the government to turn back the clock on east coast gas prices, which jumped and stayed high after gas exporters redirected supply to lucrative international markets a few years ago.

“If we want to retain and grow jobs and economic activity here, why do we impose a ‘home ground disadvantage’, and help other countries by making gas available for export when domestic manufacturing needs and objectives aren’t being met,” he said.

As part of the broader post-pandemic road map, the Morrison government has controversially pushed for a gas-led recovery, proposing measures that include opening up new gas production basins in the Northern Territory and Queensland, a forward-looking gas reservation scheme, state targets for gas and tougher “use it or lose it” rules around undeveloped gas resources.

If those measures go ahead, it is expected they would not wash through the system for several years.

That is too long for Mr Bell and many other manufacturers that rely on the fossil fuel as a feedstock.

“We constantly take on import competition that can access gas at prices at a fraction of what we pay for it here,” he said.

“This is commercially unsustainable and hard business decisions will need to be made if this can’t be resolved in the near term.”

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