Opposition Leader Peter Dutton is doubling down on his promise to cut household and industrial energy bills through a controversial east coast gas reservation policy. But while newly released modelling suggests modest benefits for consumers, the plan is already drawing sharp criticism from the energy sector and raising questions about economic certainty and implementation.
The policy, unveiled during Dutton’s budget reply speech and backed by analysis from Frontier Economics, proposes the introduction of a “gas security charge” — effectively a financial disincentive for exporters to send gas overseas, diverting up to 100 petajoules annually into the domestic market.
What the modelling shows
According to the economic modelling released just ahead of Dutton’s first televised election debate with Prime Minister Anthony Albanese, the gas reservation plan would:
- Cut industrial gas prices by 15%
- Lower household gas bills by 7%
- Reduce residential electricity prices by 3% by the year 2026
- Bring down wholesale gas prices from $14 to $10 per gigajoule
“Gas is critical to our nation’s energy future,” Dutton said during the debate.
“Our plan will deliver relief by putting more of our own gas back into Australian homes and businesses — where it belongs.”
However, the plan has sparked widespread concern across Australia’s energy sector. Critics argue the policy amounts to a reverse tariff that risks distorting market signals and punishing companies that have made multi-decade investment decisions based on export opportunities.
“Changing the rules on existing projects midstream sends a troubling message to investors,” one industry insider told ABC.
“It’s a form of sovereign risk, and that has serious implications.”
Energy giants like Senex — in which billionaire Gina Rinehart holds a stake — are reportedly furious about the policy’s potential impact. The lack of consultation and post-announcement modelling has further fuelled concerns about credibility and transparency.
The proposal’s modelling — prepared by Frontier Economics — acknowledges the plan would only start delivering household savings from 2026. That means voters would not feel the effects before the next election cycle, despite the Coalition branding it a “game-changer.”
Even some energy policy experts who are critical of Labor’s record have raised red flags.
“If we drive producers away or reduce their margins to unsustainable levels, we may end up with less domestic gas — not more,”
said one expert.
There’s also the question of what impact this plan would have on broader inflation. Dutton has argued the policy could help lower the cost of construction, manufacturing, and food production — but no modelling has yet quantified those secondary effects.
Labor strikes back
The Albanese government has labelled the proposal “economically irresponsible” and pointed out that any savings will be modest and slow to materialise. Labor’s energy spokesperson said the Coalition is engaging in “energy populism” that could backfire, especially with global energy markets still volatile and long-term supply deals at risk.
Prime Minister Albanese has so far avoided a direct policy clash, focusing instead on existing Labor commitments to renewable energy investment and grid stability — themes that resonate more strongly with climate-conscious voters.
With the federal election looming, Dutton’s gas reservation pitch will likely remain central to the Coalition’s cost-of-living campaign. But with industry unrest growing and questions swirling around the economic modelling, the coming weeks will test whether this bold policy shift can survive the heat of scrutiny — or whether it will backfire at the ballot box.
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