Australia Debating A Gas Price Cap But Ruled Out Introducing A Mining Tax

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The Australian government will consider all measures, including a price cap on gas, to rein in high energy prices. During a press conference Friday morning, Prime Minister Anthony Albanese ruled out a tax on mining companies.

Last month, Albanese’s government stated in its budget that power and gas prices for households would rise by 20%-30% over the next two years. It is at least partially due to Russia’s current war against Ukraine.

Look, (a price cap on gas) is one of the options under consideration,” Albanese said on Friday in an interview.

Albanese’s remarks follow Brookfield Asset Management and EIG-backed MidOcean Energy’s A$18.4 billion buyout bid for Origin Energy (ORG.AX), which goes against industry predictions that market intervention would hinder investment in the latest supply.

Despite the recent increase in energy prices that have generated high profits for coal miners and gas producers, Albanese said the government does not currently have any intentions of implementing a new tax on these “extraordinary profits.”

“I’m not quite sure what a mining tax is besides a slogan,” said Albanese.

Albanese stated that his government would not take any steps to influence supply. 

He added, “We have contracts with other nations for supply. We don’t intend, of course, to interfere with any of that. So that limits what options are on the table.”

To help families struggling to pay their high energy bills, the European Union and Britain have placed a windfall tax on oil and gas companies’ gains.

If U.S. President Joe Biden doesn’t receive the support he needs from Congress, he has threatened to take matters into his own hands and impose one himself.

In 2012, Australia’s Labor government passed a law implementing a 30% tax on iron ore and coal mining profits. However, two years later, the conservative coalition government repealed the law.

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