Analysts warn that most Australians won’t feel the benefits from the increase in liquefied natural gas exports. As more than $200bn of LNG investments are primed to come on line, LNG is predicted to surpass coal and become Australia’s second biggest export by 2018. The Reserve Bank of Australia’s recent Quarterly Bulletin has estimated that LNG exports accounted for .25 per cent of annual GDP growth over the 2008-2013 period. The RBA is now forecasting that LNG exports will add .75 per cent to gross domestic product over the next year and a half. This will account for 20 per cent of predicted GDP growth in that year. Government revenues will likely increase and this benefit may be passed to Australian households, reports the RBA. However, this may be offset due to increased domestic gas prices as more LNG is produced for exportation.
Despite the benefits of increased LNG exports, the Reserve Bank is unconvinced that these sales will benefit the Australian populace. Although household incomes will be boosted for those working in either LNG investments or production, the RBA suggests that the LNG production phase will not require much labour. Moreover, much of the LNG profits will be going to foreign owned companies. “Australian production of LNG is expected to ramp up substantially over the next few years, providing a significant contribution to domestic output. The effect on Australian living standards will be less noticeable than this given the low employment intensity of LNG production, the high level of foreign ownership of the LNG industry and, in the near term, the use of deductions on taxation payments,” the RBA summarised in their Bulletin.