The NSW Government is currently accepting submissions on how to establish a community benefits fund from the potential development of a coal seam gas (CSG) industry in the state. A Discussion Paper has been published by the Division of Resources and Energy. The Australia Institute has written extensively on the economics of gas in Australia.

Many of the central premises of the Discussion Paper are flawed. The introduction to the paper suggests that NSW gas supply may be at risk and that development of a CSG industry would “moderate upward pressure on prices for consumers”. Both of these claims have been debunked many times. NSW is part of the east coast gas market, which is experiencing unprecedented increases in supply. Prices will be set by international gas prices which NSW gas reserves have no ability to influence.

Despite these flaws, the idea of a community benefits fund is important and The Australia Institute welcomes the opportunity to make a brief submission.