Labor rejects Greens' push for windfall tax on gas companies, as Madeleine King threatens sector with tough controls

Labor has been accused of a "dereliction of the national interest" by ruling out the "most effective means" of reducing skyrocketing gas prices.

A damning interim report from the Australian Competition and Consumer Commission warned a 10 per cent gas shortage on the east coast next year could threaten businesses and slap households with higher prices.

In response to the largest projected shortfall since 2017, when the ACCC began its inquiry into the sector, the government on Monday revealed it will impose tough new controls on gas companies operating in Australia unless they guarantee adequate domestic supply.

But Treasurer Jim Chalmers again rejected calls for a windfall tax on the sector, which the Greens argued could be used to fund drive a towards clean energy.

"Gas companies are making super profits right now while Australians struggle to pay their power bills and make ends meet. These corporate giants like to pretend the problem is a gas shortage, but they're just shipping it all overseas and banking billions," Greens environment spokeswoman Sarah Hanson-Young said.

"Instead of ruling out a super profits tax, Labor should be looking at it as a way to help businesses and deliver cost of living relief to households."

Mark Ogge, Australia Institute principal advisor, accused Labor of ignoring "the most effective means of lowering gas prices", with exorbitant costs paid by Australians underpinning corporate profits overseas.

"Every dollar that we don't raise in windfall tax is costing us a dollar to make a windfall profit for the gas industry," he said.

"Every day we delay it means millions and millions more dollars leaving the pockets of Australian households and businesses and going to the gas industry.

"To not act on this is just a dereliction of the national interest."

With roughly two-thirds of Australia's gas production exported, the Australian Workers Union has also called on Labor to threaten a windfall tax to pressure gas exporters into supplying the domestic market.

Dr Chalmers reiterated the government was "not working up" the measure, but stressed Labor's desire to ensure multinational corporations pay their "fair share".

Labor has ruled out large-scale taxes on the energy sector since a backlash over the mining tax under former prime ministers Kevin Rudd and Julia Gillard.

Mr Ogge said its reluctance was driven by "fear but ... also an unhealthy cosiness with the gas industry" on both sides of the aisle.

Hours earlier, Resources Minister Madeleine King threatened Australia's largest gas companies with tough new controls from next year, unless they pledged to avert supply a projected shortfall of 56 petajoules.

Minister King confirmed Labor will issue a notice of intent to determine whether to use the "gas trigger" - the Australian Domestic Gas Security Mechanism - which she described as a "blunt instrument ... [of] last resort".

But she warned the process would take months, given consultation with the sector would likely to last until at least October.

"This is [gas companies'] opportunity to demonstrate that there won't be a domestic shortfall next year," she said.

The trigger was set to expire next year, but has been extended until 2030. The mechanism will be reviewed in 2023 and 2025.

The ACCC report was particularly damning of Australia's major gas suppliers, three of which it said influence 90 per cent of projected fossil fuel assets on the east coast, which it found exerted "effective control" over the market.

Minister King said the report had exposed issues in the industry which "need to be fixed", but stopped short of accepting Australian suppliers had ripped consumers off.

"It sets out patterns of behaviour ... that are clearly not acceptable," she said.

Minister King outlined the principles guiding Labor's response, including supply to the domestic market, and maintaining Australia's reputation as a reliable supplier to international trading partners.

"We have to respect the investment [international partners] have made to our country [and] for the jobs they have created," she said.

The Australian Petroleum Production & Exploration Association acting chief executive Damian Dwyer insisted the principles were "already areas of focus" for the sector.

"The gas industry is working to get the gas to where it needs to be, and customers can be assured supply will be adequate next year so they can continue uninterrupted," he said.

Minister King argued Labor was hamstrung by a "decade of inaction" on energy, saying the Coalition's failure to renew the ADGSM meant the notice cannot be issued for "a couple of weeks".

The trigger only requires a redraft of regulations and will not need to go before parliament, avoiding potentially fraught negotiations with the crossbench.

Mr Ogge accused the Coalition of allowing exporters to send gas overseas after offering it to domestic customers for "absurd" prices.

But he argued the ADGSM's consultation process had serious flaws, with companies able to offer the bare minimum supply needed to avert a shortfall.

"It would mean that the gas industry can still force Australian customers to compete with export customers for our own gas," he said.

"There's no incentive for them to provide more than that amount. If supply is tight, price will be higher."