PERTH (miningweekly.com) – Australian Prime Minister Anthony Albanese said on Friday that while a price cap on gas was still on the table to help rein in electricity prices on the east coast, the government was not considering a mining tax.

Responding to questions from the 2GB programme, Albanese said a price cap on gas was "one of the options that is under consideration".

“We know Western Australia, for example, isn't dealing with the same pressures that are here on the east coast. But I've been working constructively, and we will work with the New South Wales government as well as with the Queensland and Victorian governments, on these issues. We know there are medium-term solutions, including an increase in supply in gas. But we know that there are these pressures due to the global price increases that are occurring. But we're looking at measures that put downward pressure and relieve cost of living pressures that are on people,” the Prime Minister said.

Reacting to reports by The Australian that the federal government was considering a new tax on gas and thermal coal companies, to offer power bill relief to Australian households, Albanese said that a mining tax was not on the table.

“No, we're not looking at a mineral resources rent tax (MRRT). And that was just speculation by The Australian. The Secretary of Treasury, Steven Kennedy, has made it clear in Senate Estimates this week that we will look at sensible options. There are some limits on what we can do,” Albanese said.

The Minerals Council of Australia (MCA) on Friday warned that a tax on mining would put Australia’s economic recovery at risk, and hurt the very people the government is trying to help; households and small business owners.

“Such a tax will have dangerous consequences that will only exacerbate the cost of living crisis that is hitting Australians hard. More job losses at a time when families are doing it tough. Less investment at a time when the Australian economy needs bolstering. More risk to the viability of power plants. Less tax revenue for schools, hospitals and infrastructure,” said MCA CEO Tania Constable.

“We acknowledge that families and low income earners are doing it tough at the moment due to the rising cost of electricity. But you don’t tax your way out of a problem. Such a lazy approach to policy and politics will always have perverse outcomes.

“The Prime Minister has said he would only be looking at sensible proposals to address rising electricity prices. It is not sensible to slug the very sector that has propped up the economy and the Federal budget through recent uncertain times.

“It is not sensible to risk the ongoing economic recovery by threatening confidence and jobs. It is not sensible to place a handbrake on the economy and investment when we need the accelerator pushed,” Constable said.

She noted that in seeking to find an answer to rising electricity prices, the government wrongly assumed the price of coal sets electricity prices.

“It is conflating two issues,” Constable said on Friday.

“More than 85% of Australian coal is exported into the international market, where prices remain elevated. Those prices have nothing to do with setting the price of electricity in Australia.

“The remainder is supplied to the domestic market at a significantly lower contract or spot price to generate electricity.

“What is exacerbating the rising wholesale price of electricity is not the price of coal, nor the lack of supply, but the reduction in availability of baseload generation.”