Since the middle of 2020, the Australian economy has recovered strongly. By many measures, the recovery to pre-COVID levels looks to be almost complete.
But have the gas and gas processing sectors had much to do with it?
An analysis of the data suggests the gas industry effectively made no contribution to the economic recovery, so far. In fact, if the rest of the Australian economy had performed as poorly as the gas sector, the recovery would be yet to begin.
Claims made by the Prime Minister and others that the Australian economy would emerge from the COVID pandemic on the back of a gas-led recovery appear to have paid little attention to the recent economic data and doubled down in the recent Budget with an additional $271 million in payments to the gas industry. Together with the $600 million post-Budget commitment to the Kurri Kurri gas and diesel fired electricity generator, and the $2 billion in refinery support, new gas (and refinery) industry assistance has increased a staggering $2.9 billion over one and a bit weeks.
This paper presents analysis of the economic data over the period from pre-COVID in late 2019 to early 2021 to show there was no gas-led recovery.
The paper goes on to show there was also no recovery in the gas processing sector.
Then an analysis is undertaken to show how subsidies to encourage possible future, post-recovery growth in the gas and/or gas processing industries would contribute little to future economic growth, and even less to future employment growth.
Then an analysis of what did drive the recovery from mid-2020 is undertaken, followed by a discussion of the additional gas industry support measures in the 2020-21 Budget, and finally, a look at gas and energy sector policies that are more beneficial to Australians compared to gas sector subsidies.