Received

Energy costs will be a key issue in the lead up to the federal budget as the government considers further measures to reduce pressure on household budgets.

But the peak body for the oil and gas industry says investment, not intervention, would help drive down power bills.

Late last year the government intervened in the energy market by introducing a temporary 12-month price cap on coal and gas.

The October budget forecasted a 56 per cent increase in electricity prices and 44 per cent in gas prices for households over the next two years without government intervention.

But in its submission for the 2023/24 budget due to be handed down in May, the Australian Petroleum Production and Exploration Association (APPEA), said government intervention was not the solution.

"(Price caps), along with ongoing legal hurdles and delays for new oil and gas projects, create significant uncertainty and make investors nervous to allocate new capital to the sector and the economy," chief executive Samantha McCulloch said.

"The government should take note of the lessons from the price cap implementation when considering permanent regulation of gas prices through a mandatory code of conduct.

"It would send a positive signal to investors to recommit to an open, market-based economy."

APPEA's submission also called on the government to establish a road map to provide clear policy direction and progress priority hubs for low emissions projects to promote Australia as a regional leader in carbon storage.

Ms McCulloch said investment in new gas supplies would meet demand and drive down prices and the road map would contribute to net zero emissions ambitions.

"The value of our energy resources and their contribution to the economy, jobs and net zero cannot be taken for granted," she said.

"Clear, stable policies are essential to provide industry with confidence to invest in the new energy supplies needed."

Yet in a submission to a parliamentary inquiry on the cost of living, the federal energy and climate change department said gas spot and wholesale electricity prices had already decreased after the October budget.

In September, the east coast average gas spot price was around $20 per gigajoule and had since fallen to around $12.

Similarly, wholesale electricity prices in NSW were at $230 per megawatt-hour before the budget and government intervention, but at the start of February had dropped to $129.

The department said this reduction was consistent with estimates about the impact of the government's energy price relief plan.

© AAP 2023

Slashing fuel tax credits could help cut the federal budget deficit and carbon emissions, without stinging household budgets.

The $8 billion a year in fuel tax credits given to businesses should be cut in half, according to a Grattan Institute report.

Supporting leading sectors such as agriculture and mining, the tax office applies the credits to fuel used in machinery, equipment, processing and heavy vehicles.

"Cutting fuel tax credits in the way we recommend would have next-to-no impact on household budgets," report lead author Marion Terrill said.

"We calculate that prices at the supermarket would increase by an average of just 35 cents on a $100 grocery shop."

The public policy think tank says removing the tax break for on-road users, and roughly halving it for off-road users would save about $4 billion a year, and could instead be spent on the health system, aged care and disability services.

"It would shrink the budget deficit and help Australia hit net-zero carbon emissions by 2050," Ms Terrill said.

Burning diesel, still the go-to fuel for many, contributes almost a fifth of national carbon emissions.

Energy costs will be a key issue in the lead up to the federal budget as the government considers further measures to reduce pressure on household budgets.

But the peak body for the oil and gas industry says investment, not intervention, would help drive down power bills.

Late last year the government intervened in the energy market by introducing a temporary 12-month price cap on coal and gas.

The previous budget forecast a 56 per cent increase in electricity prices and 44 per cent in gas prices for households over the next two years without government intervention.

But in its submission for the May budget, the Australian Petroleum Production and Exploration Association said government intervention was not the solution.

Price caps, legal hurdles and delays for new projects, create significant uncertainty and make investors nervous about allocating new capital, chief executive Samantha McCulloch said.

"The government should take note of the lessons from the price cap implementation when considering permanent regulation of gas prices through a mandatory code of conduct," she said.

"It would send a positive signal to investors to recommit to an open, market-based economy."

APPEA's submission also called on the government to provide clear policy direction and priority hubs for low emissions projects to promote Australia as a regional leader in carbon storage.

Ms McCulloch said investment in new gas supplies would meet demand and drive down prices and the road map would contribute to net zero emissions ambitions.

"The value of our energy resources and their contribution to the economy, jobs and net zero cannot be taken for granted," she said.

"Clear, stable policies are essential to provide industry with confidence to invest in the new energy supplies needed."

Market data shows wholesale electricity prices and spot gas prices are falling in the wake of government intervention.

The federal energy department told last week's parliamentary cost of living inquiry that the reduction was consistent with estimates about the impact of the government's energy price relief plan.

© AAP 2023

Cost of living and the Indigenous voice referendum will dominate the federal parliamentary agenda as politicians return to the nation's capital.

Federal parliament will meet for the first time this year after a summer dominated by commentary on the plebiscite to enshrine an Indigenous voice in the constitution.

Prime Minister Anthony Albanese issued a passionate call on Sunday for Australians to support the referendum as a vehicle to closing the gap and improving lives as well as a national achievement for all to share.

Mr Albanese said the government was committed to addressing cost of living challenges and national security issues at the same time as progressing the campaign.

"My government has a very broad agenda of economic, social and environmental reform and that will be our focus," he told the Chifley Research Centre conference.

"But at the same time, how about we get this (referendum) done as well?"

As inflation bites budgets across the country, Treasurer Jim Chalmers said the economy would be a parliamentary priority in 2023.

"The economy is going to be front and centre, dominated by global volatility and by these pressures which are coming at us from around the world, that are being felt around the kitchen tables of this country," he said.

"That's why inflation is the government's main focus."

Parliament will start the year on a reflective note with a church service and day of condolence speeches for late Liberal senator Jim Molan.

The retired major general died in January aged 72 after a battle with cancer.

Mr Albanese and Opposition Leader Peter Dutton are expected to attend the traditional opening service on Monday, ahead of the first House of Representatives sitting for the year.

The lower house will start the week with private members' business, including a Greens bill to lower the voting age and a call from the Nationals for parliament to overturn the ban on nuclear power.

The chamber will also deal with private health insurance changes, the National Reconstruction Fund and a bill to ensure ministerial appointments are more transparent, following former prime minister Scott Morrison's secret portfolio scandal.

On Wednesday, progress towards stamping out bullying, sexual harassment and assault in parliamentary workplaces will be discussed.

Later in the week, the Senate will consider a coalition motion to set up an inquiry into the role and accountability of existing Aboriginal and Torres Strait Islander bodies, including land councils and native title groups.

The government has also flagged a bill to modernise the operation of referenda and proposed changes to the carbon emissions safeguards mechanism to be passed by the end of March.

However neither are on the program for this week as the government negotiates their passage.

Mr Albanese urged all sides of politics to make a "constructive contribution" to the legislative process and the shape of the referendum campaign.

MPs are expected to be lobbied to support the voice with a delegation of Aboriginal and Torres Strait Islander leaders in Canberra for the week.

© AAP 2023