Inside the Labor gas rebellion splitting the party

It came as no surprise that Josh Burns, the Labor backbencher most vocal in expressing concerns about his government’s Future Gas Strategy last week, is a Victorian.

The voters of Victoria are the most progressive in the nation, outside the ACT. John Howard once excused the Liberal Party’s poor performance in the state with a reference to America’s most leftish jurisdiction, calling Victoria “the Massachusetts of Australia”.

No other state is so determined to reduce the role of gas in its energy mix. In March 2021, the state Labor government inserted a ban on gas fracking into its Constitution. Since January this year, gas connections for new dwellings, apartment buildings and residential subdivisions have been prohibited.

Josh Burns’s Melbourne bayside seat, Macnamara, is one of the most progressive electorates in the most progressive state. Arguably no member of the Labor federal government is more aware that their electoral survival depends on the continued support of climate-concerned voters.

In the 2022 election, Burns won with 62 per cent of the vote, after preferences. The real story of his win lay in the primary vote, however. He got less than 32 per cent of first preferences, barely ahead of the Greens candidate, with 29.7 per cent.

Had just another 2000 of Macnamara’s 96,000-odd voters put a No. 1 against the Greens candidate on their ballot papers, Steph Hodgins-May would probably be the member for Macnamara today. (Hodgins-May made it into federal parliament anyway. She was sworn in this week, to fill a casual Senate vacancy.)

So Burns owes his handsome majority to Greens preferences – to the fact progressive, climate-concerned voters in Macnamara thought him the second-best candidate.

It was not hard to convince them of that in the 2022 “climate” election. Even though the Morrison government, after much internal wrangling, eventually agreed to a target of net zero greenhouse emissions by 2050, it also remained committed to major expansion of the mining industry and the use of fossil fuels. Then energy minister Angus Taylor spruiked a “gas-led recovery” from the pandemic recession.

The new government has done much more than its predecessor to move Australia towards a low-carbon future. This week’s budget included a $23 billion package over the next 10 years to spur clean domestic manufacturing and speed the nation towards net zero.

The Greens are still breathing down Labor’s neck, however – not just in Burns’s seat, but particularly in his seat. Their appeal is based in substantial measure on the concerns of many voters that Labor is not moving fast enough to exit fossil fuels.

Then last Thursday, Resources Minister Madeleine King released her Future Gas Strategy, a 110-page document strongly redolent of Angus Taylor’s gas-led recovery.

In her accompanying statement, King indicated no urgency at all about getting out of gas. Instead she endorsed more exploration, production and use of the fossil fuel “through to 2050 and beyond”.

The next morning Burns took his dissatisfaction public, to the ABC’s agenda-setting RN Breakfast program. “I didn’t get into politics to be a support mechanism for the fossil fuel industry,” he began.

To quell any doubts among listeners as to the strength of his opposition to King’s suggestion that gas could be a major part of Australia’s energy mix beyond the government’s 2050 deadline for net-zero emissions – and into the indefinite future – he made it plain: “I think the open-endedness is the biggest issue. I think everyone in government knows that both myself and my electorate want stronger action on climate change. And that’s something that I’m not going to be shy about prosecuting, including publicly if I need to.”

Burns also suggested he was going even harder in private.

“I think the most important conversations are often done behind closed doors,” he said.

It was strong stuff, and while Burns was the boldest in publicly challenging King’s gas-fired vision of the energy future, he was not the only one.

Michelle Ananda-Rajah, the first-term member of parliament for the seat of Higgins, which adjoins Macnamara and was formerly blue-ribbon Liberal turf also went public, complaining about the lack of consultation, saying she had been “blindsided” by the announcement.

As was the case for Josh Burns, Greens preferences also pushed Ananda-Rajah across the line in the 2022 election. She received only 28.5 per cent of first preference votes, compared with 40.7 per cent for the Liberal incumbent, Katie Allen.

A couple of seats to the north, the Labor member for Jagajaga, Kate Thwaites, enjoyed a decisive win over her Liberal opponent – 62.3 per cent to 37.7 – after Green preferences helped lift her tally from just 40 per cent of the primary vote.

The story was slightly different in the nearby seats of Cooper and Wills, won respectively by Ged Kearney and Peter Khalil, in that the Greens finished second.

Thwaites, Kearney and Khalil also issued statements expressing concerns about King’s plan.

Thwaites conveyed to the ABC her “frustration … about the fact that the way it’s been handled and presented does not reflect the work the government is doing”.

“The focus has to be on the transition to renewable energy not prolonging fossil fuels,” she said.

Khalil said on social media: “The role of gas should be limited to what is absolutely necessary for our transition to a low-emissions economy. Not one bit more.”

Kearney’s comments were especially significant because she is no mere backbencher. She is a former president of the Australian Council of Trade Unions and now assistant minister for Health and Aged Care. By speaking out she defied notions of ministerial solidarity.

“As the member for Cooper my position is clear: there should be no public money spent on new gas or coal projects,” she said in a statement to The Saturday Paper.

 “The voice of my community is strong. Our future lies in renewable energy. We cannot draw out our reliance on fossil fuels any longer than is necessary.”

In her interview with Josh Burns on RN Breakfast, host Patricia Karvelas called the expressions of opposition to King’s strategy “the biggest revolt I’ve seen since covering your government”.

Other observers saw not so much a revolt as sanctioned dissent, an acknowledgement by the party leadership that those who expressed displeasure with King’s plan had to do it for the sake of their electoral futures and that of the government.

Certainly most of those who spoke out came from electorates where the Greens’ vote could be decisive – the seats held by Burns, Kearney, Khalil and Thwaites have all been nominated by the Greens as targets for the next election, but not all the Labor members in target seats expressed objections. Justine Elliot, for example, maintained her silence even though she barely pipped the Greens candidate on primaries in her northern New South Wales electorate, Richmond, in 2022. Graham Perrett, whose seat of Moreton in Brisbane is on the hit list, did not pipe up.

Equally, several who voiced concerns are not on the Greens target list: Josh Wilson in Fremantle, Western Australia; Sally Sitou and Jerome Laxale in the Sydney seats of Reid and Bennelong, respectively; and Carina Garland in the Melbourne seat of Chisholm.

On Monday the Greens leader, Adam Bandt, held a media conference in which he challenged “all those Labor grandstanders” who had spoken out to “put their money where their mouth is”. Bandt alluded to the fact that since the election Labor had approved five new coalmines and eight gas mines.

“Labor are climate frauds. I say this to all of those MPs: quit your party. Come and vote for a party that opposes opening new coal and gas and opposes keeping coal and gas in the system…”

He called some of the dissenters out by name: “Josh Burns, Ged Kearney, Peter Khalil, Justine Elliot, now’s your chance, now the parliament has resumed, to vote against opening new coal and gas mines.”

Bandt also fed the narrative that they had engaged in a bit of expedient, authorised dissent.

“Wasn’t it a coincidence that they all coordinated their lines…?”

It would be unduly cynical to dismiss their expressions of unease as merely performative, however. As one Labor source put it, a lot of people in the party are genuinely “pissed off” at King for needlessly undermining the party’s narrative on energy policy.

Only a few months ago she precipitated another fight, when she brought legislation that would have changed the approval process for offshore gas projects to override environmental laws. The change, buried in an otherwise innocuous bill relating to worker safety, was first spotted by the Greens. It was subsequently removed. Kearney, Burns and Josh Wilson were among those who fought against it.

King’s Future Gas Strategy doesn’t even involve legislation or a change of policy, which means she started a fight for no real reason.

The most charitable interpretation of King’s most recent provocative foray is that she was simply trying to make the point that Labor’s target of deriving 82 per cent of Australia’s energy needs from renewables left 18 per cent to come from other sources, that gas was the best way to provide that, and it was still uncertain when exactly something else will replace gas.

In short, she simply communicated clumsily, perhaps because she represents Western Australia, where people are gung-ho in favour of fossil fuels, and she did not fully appreciate the sensitivities of the issue elsewhere in the country.

More likely, though, she was playing to the views of her home state.

If Victoria is the Massachusetts of Australia, Western Australia and Queensland are the equivalent of Texas – big resource states where conservatives tend to dominate.

Perhaps the biggest surprise of the 2022 election, then, was that Labor did so well in the west, increasing its numbers from five MPs to nine. Several factors have been cited as reasons for this: Labor had a particularly popular premier in Mark McGowan, the state was collectively offended by Scott Morrison’s attacks over its shutting itself off from the rest of the country during the pandemic, and the state economy was going gangbusters thanks to sky-high prices for its resources, including gas.

It was a different story in Queensland, where Labor lost a seat, taking it to just five out of 30. The Coalition lost two seats. The Greens picked up three.

If Labor is to retain government in the coming election, it will be important to hold its gains in the west and pick some up in the north. The Future Gas Strategy may be toxic in inner-urban seats in the eastern states, but in the provinces, people are far more likely to support King’s argument that the fossil fuel resources they mine are vitally important for domestic industry and households.

“Ensuring Australia continues to have adequate access to reasonably priced gas will be key to delivering an 82 per cent renewable energy grid by 2030, and to achieve our commitment to net zero emissions by 2050,” she said.

The truth, however, is 80 per cent of Australian gas is exported and exports are making domestic gas more expensive, says Richard Denniss, economist and executive director of The Australia Institute.

“Gas exports drove up the cost of industrial gas, they drove up the price of running peaking plants for electricity,” he says.

“And now, here we are trying to solve the problem the gas industry caused with more subsidies and more gas expansion? It makes no sense.”

King lauded the fact that last financial year, liquefied natural gas was Australia’s second-largest export by value, with earnings of $92 billion, and employed some 20,000 people.

Woolworths employs 10 times as many people, however, and export earnings do not mean much, says Denniss, “if we also export the profits”.

In 2020-21, according to tax office data collated by The Australia Institute, the big gas miners Chevron, Woodside, ExxonMobil, Shell, Santos, INPEX and APLNG had a combined income of almost $59 billion. Only Chevron paid any income tax: $30.

While $670 million was paid in royalties to the WA government in 2023-24, it amounted to just 1.5 per cent of the state’s revenue. As economic journalist Alan Kohler tartly put it this week: “Motor vehicle registration contributes almost twice as much; iron ore royalties nine times as much.”

The federal government also applies the Petroleum Resources Rent Tax (PRRT) to offshore gas production. As Kohler further noted, in 2021-22 ExxonMobil, Woodside, Shell and Chevron paid significantly less in PRRT than the $2.5 billion the Commonwealth gets from beer excise.

Meanwhile China, Japan and South Korea use far more Australian gas than Australia does. And the global climate continues to heat up.

If Madeleine King is troubled by any of this, it certainly was not apparent in her glowing portrayal of Australia’s gas-driven future. If her party critics are, it didn’t show when they had the chance to vote on it this week.

On Tuesday, Adam Bandt moved a motion noting the world was on track for 2.5 degrees of warming and that coal and gas were fuelling the climate crisis. In it he called for the House to condemn the Future Gas Strategy, “which intends to expand gas production to 2050 and beyond”, and for the government to stop more fossil fuel developments.

Just parliamentary theatre, of course, but nonetheless an embarrassing reminder that this Labor government is little different from its conservative predecessor in its willingness to open up more gas production.

No Labor members voted for it.

For them, the bigger question was not environmental or economic but political: would they lose more votes to the Greens at the next election?

This article was first published in the print edition of The Saturday Paper on
May 18, 2024 as „Inside Labor’s gas rebellion“.

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