Mass timber is becoming an increasingly popular construction material in apartment developments, but Adelaide developer <a href="https://www.apartments.com.au/developers/otello">Otello</a> is taking the approach a step further.

At its new <a href="https://www.apartments.com.au/new-apartments/flowe-bowden-18-gibson-street-bowden-sa-5007">Flowe Bowden</a> development, the exposed cross-laminated timber (CLT) structure isn't just about reducing the building's environmental footprint. It also forms the foundation of a broader wellness strategy, influencing everything from indoor air quality and natural materials to the way residents move through and experience the building.

The 115-apartment mixed-use development, designed by Melbourne-based architecture practice Fieldwork, will occupy a prominent island site opposite Bowden Village Reserve, combining one, two and three-bedroom apartments with retail and a dedicated wellness destination.

[smartcode_project:default project_id=152022 project_image_fid=375528]

Wellness isn't confined to a gym or shared resident facility at Flowe. Instead, Fieldwork embedded the concept into the building itself.

The development has been split into two residential wings connected by a naturally ventilated central breezeway, replacing traditional enclosed corridors with open-air walkways that improve natural light, encourage cross ventilation and create more opportunities for neighbourly interaction.

"Rather than treating wellness as something that only happens on the ground floor, our response integrates it throughout the building, which led us to ask what it really means to design a healthy building," Fieldwork Director Quino Holland said.

[smartcode_project:default project_id=152022 project_image_fid=375531]

The building's architecture also reflects Bowden's industrial heritage. The lower podium references the area's historic brick and sandstone buildings, while the upper levels transition to exposed CLT, allowing the timber structure to become a defining feature throughout the apartments and shared spaces.

The use of mass timber sits alongside a range of sustainability initiatives, including a fully electric, gas-free design, rooftop solar and a targeted 5 Star Green Star rating.

[smartcode_project:default project_id=152022 project_image_fid=375524]

Inside the residences, the focus remains on natural, durable materials. Blackbutt engineered timber flooring, exposed CLT ceilings, porcelain surfaces and warm timber joinery create a calming interior palette, while low-VOC finishes and responsibly sourced materials have been selected to improve indoor air quality.

Kitchens have been designed as the centrepiece of each apartment, featuring porcelain island benchtops, timber-look cabinetry and brushed steel tapware, with layouts that maximise natural light and ventilation.

[smartcode_project:default project_id=152022 project_image_fid=375530]

The more traditional interpretation of wellness comes in the form of Level Eleven, a two-storey wellness club spanning the ground floor, mezzanine and first floor.

The facility will include a gym, yoga and reformer Pilates studios, Finnish and infrared saunas, magnesium hot and cold plunge pools, and dedicated recovery spaces. Unlike many residential wellness facilities, Level Eleven will also operate commercially, allowing the broader Bowden community to access the venue while giving residents exclusive membership benefits.

The ground floor has also been designed around everyday living. A café overlooking Bowden Village Reserve will activate the street frontage, while a bike workshop with tool storage, co-working space and dog wash has been incorporated to support daily routines and encourage interaction between residents.

"Flowe brings together my two biggest passions, creating places and creating healthier lives," Otello founder Daniel Harris said.

"We wanted to create something Adelaide hasn't seen before, a genuinely healthy building, where the way you live is lifted without even trying."

Flowe is positioned directly opposite Bowden Village Reserve and within walking distance of Bowden Railway Station and the Adelaide Entertainment Centre, placing future residents just minutes from the Adelaide CBD while remaining connected to one of the city's most established urban renewal precincts.

[smartcode_project_cta:default project_id=152022]

Joel Robinson

Otello launches wellness-focused Flowe Bowden with Adelaide-first mass timber apartment design

Not all apartment amenities are immediately visible.

Swimming pools, gyms, rooftop terraces and residents' lounges have long featured on buyers' wishlists, but as the way Australians live has changed, so too have the features that make apartment living more convenient.

Increasingly, buyers are placing value on the practical aspects of day-to-day life. Fast internet, EV charging, secure bike storage, flexible workspaces and parcel management are becoming just as relevant as lifestyle amenities, reflecting changing habits and expectations.

Online shopping has been one of the biggest drivers of that shift.

Australians spent a record $82.6 billion shopping online in 2025, with almost one in every four retail dollars now spent digitally, making parcel deliveries a routine part of everyday life rather than an occasional convenience.

For apartment residents, however, receiving those deliveries isn't always straightforward.

Without someone home to accept a parcel, deliveries can be redirected to a nearby Post Office, left in building foyers or common areas, or require building management to temporarily store packages. As apartment living continues to grow across Australia's cities, parcel management has become an increasingly important consideration for both residents and developers.

Australia Post's Parcel Locker network is one response to that shift.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/KPZ9j5FRdsQ?si=Qztc1dNP3ZvEIUhb" title="YouTube video player" width="560"></iframe>

Rather than relying on home delivery, eligible parcels can be directed to a nominated Parcel Locker, where they're securely stored until collected. Once a parcel arrives, residents receive a notification through the AusPost app or SMS and can retrieve it using a one-time code or QR code at a time that suits them.

The network has expanded to more than 1,500 locations nationwide, with Parcel Lockers positioned at Post Offices, shopping centres, supermarkets, transport hubs and, increasingly, within or alongside residential developments.

That growing presence reflects a broader change in how apartment buildings are being planned.

Developers are increasingly considering the operational side of apartment living alongside traditional lifestyle amenities. Just as secure mailrooms, bicycle storage and EV charging have become more common inclusions, parcel management is emerging as another feature that supports everyday convenience.

It also helps preserve the arrival experience within a building. Carefully designed lobbies and communal spaces can quickly become cluttered when deliveries accumulate, while secure parcel solutions reduce the likelihood of missed deliveries or parcels being left unattended.

For buyers comparing apartments, these everyday details are becoming part of the decision-making process.

Location, floorplans and finishes remain fundamental, but the features that simplify daily life are carrying greater weight than they once did. As online shopping continues to shape consumer behaviour, secure parcel delivery is increasingly becoming another amenity worth looking for.

Parcel delivery is joining the apartment amenity checklist

Inca Property Group has lodged a State Significant Development Application (SSDA) for Dawn, a 53-apartment oceanfront development overlooking Mona Vale Beach.

The proposal, at 35-39 Darley Street East, would replace an existing 18-apartment strata building with a new owner-occupier-focused development comprising 53 two and three-bedroom apartments, including nine affordable built-to-rent residences delivered under the State's infill affordable housing scheme.

Positioned on a 2,679 sqm elevated site around 280 metres from Mona Vale Beach, the development has been designed to maximise panoramic ocean views while responding to the site's sloping topography.

<a href="https://www.apartments.com.au/developers/inca-property-group">Inca Property Group</a> Managing Director Josh Thompson said the State Significant pathway provided greater certainty for projects of this scale.

"This State Significant pathway gives the team real certainty to progress <a href="https://www.apartments.com.au/new-apartments/dawn-35-39-darley-street-east-mona-vale-nsw-2103">Dawn</a> through to completion," Thompson said.

"It allows us to acquire a one-off site, design it carefully and deliver the right offering for the suburb, assessed by the NSW Government's planning department."

The project is one of the first developments in the area to be assessed under the NSW Government's Low and Mid-Rise Housing policy, with the site sitting on the edge of the policy's designated inner area.

The proposal includes three basement levels providing 124 car spaces, alongside a range of resident amenities including a swimming pool, gym, sauna, wellness facilities and private plunge pools for selected ground-floor and penthouse apartments.

<img alt="Dawn" data-entity-type="file" data-entity-uuid="fc1a1daf-0ce4-4f12-9076-b1fa553c7a91" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-21%20at%208.42.11%E2%80%AFAM.png?VersionId=4GZ9h.gpNkTljbxyAET8Jfhv51XUamDm" />

Thompson said Dawn had been designed specifically for owner-occupiers and downsizers, a buyer profile that has driven demand across Inca's recent Upper North Shore developments.

"The majority of buyers in our recent North Shore projects have been downsizers, and we are learning exactly what this market is looking for. Beyond the location itself, we have included resort-style amenities to deliver a genuine lifestyle offering," Thompson said.

Located within walking distance of Mona Vale Beach, the town centre, Mona Vale Golf Club and the Royal Motor Yacht Club, Dawn represents Inca's first Northern Beaches project following the sell-out of Tara on Park in Waitara and Ellis Residences, currently under construction in St Ives.

Construction will be undertaken by Inca's in-house construction arm, GOP Constructions.

Dawn is the latest major apartment proposal for Mona Vale, with the suburb emerging as one of the key beneficiaries of the NSW Government's new Low and Mid-Rise Housing policy.

New developer One Living, led by industry veteran Joseph Scuderi, recently secured a site on Mona Vale Road, on the border of Mona Vale and Pymble, where it is planning around 140 apartments.

IPM is also planning its third project in Mona Vale, significantly increasing the scale of its previous developments with an 82-apartment proposal at <a href="https://www.apartments.com.au/new-apartments/159-167-darley-street-west-mona-vale-nsw-2103">159-167 Darley Street West</a>, opposite Bayview Golf Course and less than 800 metres from Mona Vale town centre.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/one-living-enters-sydneys-new-apartment-market-with-northern-beaches-site-acquisition">One Living enters Sydney's new apartment market with Northern Beaches site acquisition</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-ipm-plans-third-mona-vale-project">First look: IPM plans third Mona Vale project</a>

First look: Inca eyes Mona Vale with State Significant DA for Dawn apartments

Seasoned Victorian apartment developer <a href="https://www.apartments.com.au/developers/central-equity">Central Equity</a> has logged more than $400 million in sales in its luxury apartment project Palmera Residences at Northcliffe on the Gold Coast.&nbsp;

Central Equity Director Karl Kutner said the sales result reflected a combination of location, product quality and delivery certainty with the project already under construction by building powerhouse Multiplex.&nbsp;

"Surpassing $400 million in sales since launch is a significant milestone and an outstanding endorsement of <a href="https://www.apartments.com.au/new-apartments/palmera-residences-gold-coast-18-garfield-terrace-surfers-paradise-qld-4217">Palmera Residences</a>,” he said.&nbsp;

"We believe one of the key reasons for this strong result is the confidence purchasers have in knowing the project is under construction with Multiplex. Buyers are increasingly looking for certainty. They want to know that the project they commit to today will be delivered by an experienced team with a proven track record."&nbsp;

[smartcode_project:default project_id=108274 project_image_fid=365782]

Kutner said it was clear there was still high demand for luxury projects that offered certainty of delivery.&nbsp;

“We are in a market where many residential developments have faced delays due to rising construction costs, labour shortages and financing challenges,” said Kutner.&nbsp;

"But having construction underway has provided our buyers with resounding confidence backed by more than 40 years of development delivery by Central Equity combined with construction by one of Australia's most respected construction companies."&nbsp;

[smartcode_project:default project_id=108274 project_image_fid=365785]

Central Equity is one of Australia's most experienced privately-owned property developers. Over more than four decades, the company has delivered in excess of 85 residential developments including 10,000 apartments and many thousands of stand alone homes.&nbsp;

Located on Garfield Terrace at Northcliffe, between Surfers Paradise and Broadbeach, Palmera Residences occupies one of the Gold Coast's most sought after beachside locations. The development has been designed to appeal to owner occupiers seeking premium residences that combine generous living spaces and resort style amenities.&nbsp;

Palmera Residences will feature an exceptional collection of resort style amenities, including two swimming pools: a generously sized family pool with safe shallow zones for relaxed recreation, and a 20 metre lap pool positioned to maximise all day sunlight.&nbsp;

Residents will also enjoy exclusive access to wellness and recreational facilities including a magnesium pool, sauna, yoga studio, expansive fitted gymnasium, resident lounge, outdoor BBQ’s&nbsp;and indoor and outdoor dining areas, together with a dedicated concierge and luxurious hotel inspired entrance foyer.&nbsp;

[smartcode_project:default project_id=108274 project_image_fid=365767]

A unique feature at Palmera Residences has been designed to enhance the Gold Coast lifestyle which includes both indoor and outdoor gymnasium facilities, together with thoughtfully designed indoor and outdoor dining and entertaining areas. A corner café has also been incorporated to provide residents with a destination for their everyday needs.&nbsp;

Kutner said buyer demand had been broad based with purchasers attracted from interstate as well as throughout South East Queensland.&nbsp;

"We're seeing strong interest from owner occupiers, lifestyle buyers and people relocating to the Gold Coast. Many purchasers have been searching for a premium beachside residence where quality, design and delivery are equally important."&nbsp;

[smartcode_project:default project_id=108274 project_image_fid=365771]

Kutner said the sales milestone was an important achievement, but the focus remained firmly on delivering an exceptional development.&nbsp;

"While reaching $400 million in sales is an important milestone, our priority remains delivering a project that exceeds purchaser expectations,” he said.&nbsp;

"Palmera Residences has been designed to become one of the Gold Coast's landmark residential addresses, and we look forward to welcoming our purchasers to their new homes."&nbsp;

There are a limited number of residences remaining in selected configurations with pricing from $2,950,000 to $8,950,000. Palmera Residences is also crowned by expansive penthouses with wrap around views.

[smartcode_project_cta:default project_id=108274]

Construction certainty and strong buyer demand drive major sales result for luxury Gold Coast development

Palmera Residences fly out the door as sales pass $400 million

National property developer <a href="https://www.apartments.com.au/developers/goldfields-group">Goldfields</a> has appointed BINAH as its construction partner for Quartet, its new Brisbane apartment development in the undersupplied suburb of <a href="https://www.apartments.com.au/developments/milton-qld-4064">Milton</a>.

Located just two kilometres from the Brisbane CBD and moments from key 2032 Olympic precincts, <a href="https://www.apartments.com.au/new-apartments/quartet-milton-33-manning-street-milton-qld-4064">Quartet</a> will deliver 131 one, two, three, and four-bedroom apartments priced from $1 million to $4.2 million, combining elevated design with a wellness-focused lifestyle offering.&nbsp;

[smartcode_project:default project_id=108736 project_image_fid=368000]

Goldfields’ Chief Executive Officer, Lachlan Thompson, said the appointment of <a href="https://www.apartments.com.au/builders/binah-constructions">BINAH</a> marked an important milestone for the project.&nbsp;

“Bringing BINAH on board as our construction partner will allow us to bring our vision for Quartet forward with a team that has a proven track record of delivering high-quality residential projects,” Thompson said.&nbsp;

“We’ve taken a considered approach to progressing the site because we wanted to deliver the whole package. Buyers ultimately back great developers, great projects and great builders, and with Quartet, we’ve made sure all three line up.

“People want certainty, they want to know the project will be built, that the homes will be delivered as promised, and that the developer stands behind the quality of what they create. That’s something Goldfields has built its reputation on over many years.”&nbsp;

[smartcode_project:default project_id=108736 project_image_fid=367993]

BINAH’s Managing Director, Khalil Hafza, said the company was proud to be partnering with Goldfields to deliver Quartet.&nbsp;

“Quartet is an exciting project to bring to life, particularly given the level of detail in the residences and the extensive rooftop amenity planned for the building,” Mr Hafza said.&nbsp;

“Our focus is on delivering a high-quality build that brings that design vision to life and creates homes residents will enjoy for many years.”&nbsp;

[smartcode_project:default project_id=108736 project_image_fid=367999]

The facilities at Quartet have been feared towards the roof, with a&nbsp;25 metre lap pool, spa, sauna and cold plunge, and a communal barbecue area and alfresco.

Town planning was designed by <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> and brought to life by Melbourne-based architecture firm Cera Stribley.

<a href="https://www.apartments.com.au/interior-designers/cera-stribley">Cera Stribley</a> Co-Founder and Managing Principal, Dom Cerantonio, said the project responds to both its riverside setting and Brisbane’s evolving urban character.&nbsp;

“Quartet has been designed to sit comfortably within its riverside context, offering a refined take on urban living through well-planned, generously proportioned residences that will stand the test of time,” Mr Cerantonio said.&nbsp;

“An emphasis on natural light, natural textures and carefully selected finishes from timber and marble to premium appliances, creates calm, considered interiors designed for comfort and long-term liveability.”&nbsp;

Construction of Quartet will commence in July 2026, with completion anticipated in Q4 2028.

[smartcode_project_cta:default project_id=108736]

Construction to commence on 131-residence tower designed around wellness-focused living

Goldfields appoints BINAH for Quartet apartments in Milton

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Australia’s east coast gas users are paying prices significantly above export parity prices, the ACCC’s latest gas report reveals.
The ACCC’s Gas Inquiry 2017-2025 Interim Report, released today, shows that prices offered to domestic gas users in late 2019 and early 2020 ranged from $8 to $11/GJ.
While this was down slightly from the $9 to $12/GJ range observed earlier in 2019, this price decline was not in line with the significant and sustained drop in LNG netback prices, which were for 2021 delivery below $6/GJ by early 2020 and have been below $5.50 since May.
“The ACCC is very concerned with the widening gap between domestic and export parity prices, which will have an inevitable impact on Australia’s industrial sector during what is already a difficult economic period,” ACCC Chair Rod Sims said.
“Queensland LNG producers sold 18 LNG spot cargoes into international markets in late 2019 and early 2020, equivalent to more than 10 per cent of annual domestic east coast demand. This gas was sold at prices substantially below domestic gas price offers, showing the importance of our continuing work to understand the drivers behind the price levels we are seeing across the domestic market.”
“It is also clear that recent Australian contract gas prices do not reflect overseas forward prices.”
“I am yet to hear a compelling reason from LNG producers as to why domestic users are paying substantially higher prices than buyers in international markets.”
“When we have lower gas prices around the world, and the Australian market linked to world gas markets, it is vital that Australian gas users get the benefit.”
Recommendations to address price concerns
The ACCC recommends the extension of the existing Commonwealth Government’s Heads of Agreement with LNG producers, due to expire at the end of 2020, because of the demonstrated capacity of LNG producers to supply additional gas into the domestic market when needed.
“As well as extending this Heads of Agreement, we think the government should consider strengthening the agreement’s price commitments,” Mr Sims said.
“For example, reference could be made to LNG netback price expectations and the prices LNG exporters could expect to receive for uncontracted gas in overseas markets over the relevant period.”
“Extending the Heads of Agreement is one measure that can be adopted now. Further measures are also needed to ensure adequate supply of appropriately priced gas over the longer term,” Mr Sims said.
With the southern states facing the greatest risk of shortfall in the future, the ability of market participants to transport gas from Queensland into southern markets remains critical.
The ACCC therefore recommends governments consider whether further measures are needed to see timely investment in north-south transportation infrastructure particularly, or import terminals on the east coast.
The ACCC also recommends that governments seek to increase the diversity of suppliers when granting new tenements, as greater competition between suppliers would be more likely to bring down domestic prices. Measures such as active tenement management should also be used to ensure producers bring gas to market in a timely manner.
Gas supply for 2021 and COVID-19 impacts
Australia’s east coast gas market is expected to have sufficient supply in 2021, with the LNG producers in particular having surplus gas, but the risk of a shortfall in the southern states in the medium term has increased, the ACCC’s report finds.
More than 20 per cent of southern states’ production in 2021 is expected to come from undeveloped ‘2P’, or proven and probable, reserves. At the same time last year, only eight per cent of southern supply had been forecast to come from undeveloped 2P reserves in 2020.
“The impacts of COVID-19 and the collapse in oil prices are being felt at all levels of the gas supply chain, and they have highlighted key areas of dysfunction in the market,” Mr Sims said.
“The cumulative effect on gas users is significant and exacerbates the difficulties being experienced by many commercial and industrial users.”
The report is available at <a href="https://www.accc.gov.au/regulated-infrastructure/energy/gas-inquiry-2017-2025/july-2020-interim-report" target="_blank">Gas Inquiry</a>
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j.ballantyne1990-6AQqhLzZaK

Domestic gas users paying too much: ACCC

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EXPERT OBSERVATION
So worried is the government about the meagre income it is getting from gas during the middle of Australia’s biggest gas export boom that it asked an independent advisor to chair a review and is getting the treasury to run the ruler over his recommendations.
Australia gets paid for gas mined from under its waters by the “<a href="https://www.ato.gov.au/Business/Petroleum-resource-rent-tax/PRRT-concepts/" target="_blank">petroleum resource rent tax</a>” set up by the Hawke government in 1988.
But payments peaked at around <a href="https://treasury.gov.au/review/review-of-the-petroleum-resource-rent-tax/final-report" target="_blank">A$2.5 billion</a> in 2000-01. They are now less than half that, and much lower still as a share of the economy and as a share of gas exported.
The government’s December budget update predicts petroleum resource rent tax revenue of just <a href="https://budget.gov.au/2019-20/content/myefo/index.htm" target="_blank">$1.15 billion</a> this financial year, revised down from the $1.4 billion expected in the May budget.
It has pencilled in only $1.15 billion for each of the next three years.
Qatar, which exports the <a href="https://www.smh.com.au/business/the-economy/australia-tops-qatar-as-world-s-biggest-lng-exporter-20200106-p53p5h" target="_blank">about the same amount</a> of gas as Australia, is said to have got <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2019-04-01/tax-credits-for-oil-and-gas-giants-rise-to-324-billion/10959236" target="_blank">more than A$20 billion</a> in 2018.
Our tax is good in theory
The weak performance of the petroleum resource rent tax is all the odder because it has been held up as the gold standard for resource taxation.
The 2009 Henry Tax Review wanted to apply the model to iron ore and other minerals, which the Rudd government attempted to, announcing a <a href="https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/BudgetReview201011/TaxationRSPTax" target="_blank">resource super profit tax</a> in 2010.
The Gillard government cleaved it to what became the milder <a href="/news">minerals resource rent tax</a>, before it was abolished by the Abbott government in <a href="https://www.allens.com.au/insights-news/insights/2014/09/repeal-of-the-minerals-resource-rent-tax/" target="_blank">2014</a>.
The petroleum resource rent tax collects a share of the profit made from mining gas instead of charging a fixed royalty of the kind imposed by state governments for other minerals.
But the “profit” depends on the choice of the price at which the gas is “sold” from one part of the entity that mines it to another before it is processed and turned into liquid for export.
<h2>It’s not as good in practice</h2>
There is a regulated method to calculate the true “transfer price” for the purpose of determining the tax payable. If it produces too low a result (as it seems to have) too little profit will be recorded and too little tax will be charged.
The Turnbull government was concerned enough about what was being charged to set up a petroleum resource rent tax review headed by former treasury official <a href="https://treasury.gov.au/review/review-of-the-petroleum-resource-rent-tax" target="_blank">Mike Callighan</a> in 2016.
<img src="https://images.theconversation.com/files/315167/original/file-20200213-41656-19iriq0.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=237&amp;fit=clip" alt="">
<a class="source" href="https://www.theaustralian.com.au/nation/politics/tax-hike-on-gas-and-oil-on-cards-to-save-surplus/news-story/80728e8d4e4ee0c0b425cd543b770d84" target="_blank">The Australian , Saturday February 8, 2020</a>
Callahan identified <a href="https://treasury.gov.au/review/review-of-the-petroleum-resource-rent-tax" target="_blank">four reasons</a> for dwindling reported profits at a time of record production: declining oil and gas prices, declining production from older projects, the massive expenses involved in setting up new mega projects, and transfers of spending between projects for accounting purposes.
He also recommended an examination of the transfer pricing formula.
In 2018 Treasurer Josh Frydenberg <a href="https://treasury.gov.au/sites/default/files/2019-03/p2018-t339508-govt-response-PRRT.pdf" target="_blank">tightened</a> some of the provisions and asked the treasury to lead a <a href="https://treasury.gov.au/publication/p2015-t339508" target="_blank">review</a> of the formula that is due to report mid-year.
So large are the potential revenue gains that <a href="https://www.theaustralian.com.au/nation/politics/tax-hike-on-gas-and-oil-on-cards-to-save-surplus/news-story/80728e8d4e4ee0c0b425cd543b770d84" target="_blank">The Australian</a> newspaper has reported that they could keep the budget in surplus.
We calculate the price of gas strangely
To determine the transfer price at which gas from Commonwealth waters is transferred from the part of the entity that extracts it to the rest of the entity, the Australian government uses a method used nowhere else in the world, and certainly not by Australian states in the calculation of their royalties on minerals.
It adopted the method on the recommendation of accounting firm <a href="https://treasury.gov.au/sites/default/files/2019-04/c2019-t364690-attachment.doc" target="_blank">Arthur Anderson</a> in 1998, a few years before it was disgraced in the <a href="https://en.wikipedia.org/wiki/Arthur_Andersen" target="_blank">Enron scandal</a> in the United States and stopped using that name.
The method averages two prices – the “net-back” price, which is used elsewhere, and a bespoke “cost-plus price” which is used nowhere else and purports to be a measure of the cost of mining the gas, but which oddly excludes both the cost of exploring for the gas and the cost of the gas itself.
The more commonly-used (and usually larger) net-back price is calculated by working backwards from the price at which the product is sold to the end-user, subtracting the costs involved in getting it to that point.
Modelling I have conducted for a article co-authored with Machiel Mulder and Peter Perey in the <a href="http://www.unswlawjournal.unsw.edu.au/wp-content/uploads/2020/02/Kraal-et-al-Taxation-and-Pricing-of-Natural-Gas.pdf" target="_blank">UNSW Law Journal</a> finds that if the net-back price alone was used (as it is elsewhere) the big gas exporters would pay the government A$15.5 billion over the years between now and 2030, instead of the presently-expected $5.5 billion.
We shouldn’t value gas at zero
There is no obvious reason for the Australian government to value the gas itself at zero. The idea that its only value comes from the equipment, labour and technical know-how used to extract it wouldn’t be accepted in the United States or in any other place that charges for resources extracted and demands payment promptly upon extraction.
Fortunately, the government of Queensland continues with royalties for onshore gas and the government of Western Australia continues with royalties for North West Shelf gas.
If the treasury’s review of gas transfer pricing results in only fine-tuning the existing regulations it will miss the chance to get us a proper return on our resources. We own them and they are worth something.
Australians have a right to be paid what their resources are worth and to use that money to build government services or a budget surplus.
Listen to Dr Kraal discuss petroleum resource rent tax at Monash ‘<a href="https://www2.monash.edu/impact/podcasts/thought-capital/why-we-need-to-pay-attention-to-energy-justice/" target="_blank">Thought Capital</a>’
<a href="https://theconversation.com/profiles/diane-kraal-14610" target="_blank">Diane Kraal</a>, Senior Lecturer, Business Law and Taxation Dept, Monash Business School, <a href="https://theconversation.com/institutions/monash-university-1065" target="_blank">Monash University</a>
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/in-the-midst-of-an-lng-export-boom-why-are-we-getting-so-little-for-our-gas-131461" target="_blank">original article</a>.
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In the midst of an LNG export boom, why are we getting so little for our gas?

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GUEST OBSERVATION
Cold weather has arrived in eastern Australia, to the glee of those who enjoy skiing. But you don’t have to venture onto the slopes for cold to be a danger. With gas prices rising, many in the community are shivering while contemplating how big their next gas bill will be.
Eastern Australia’s gas market is rapidly changing, driven by the first exports of liquefied natural gas (LNG) from Queensland. And this is affecting the whole supply chain, from gas producers, to the way we use gas in our homes.
Gas was cheap, for decades
In Victoria, South Australia, and through to New South Wales, Queensland and Tasmania, gas has long been viewed as the preferred fuel for many applications - from industrial uses right down to warming our lounge rooms. Since the discovery of the massive Bass Strait oil and gas deposits off Victoria in the late 1960s, gas consumption across eastern Australia grew, decade after decade.
But despite these discoveries and growing production, the resource companies involved were often frustrated. While global crude oil prices went up and up, eastern Australian gas prices were stuck in the 1970s. Gas consumers enjoyed access to some of the cheapest gas in the developed world.
On the other hand, gas producers dared not complain too loudly. They often considered this gas nearly a waste product – interfering as it did with the speed at which the far more valuable crude oil and LPG could be drawn from the ground. If eastern Australia had been another jurisdiction such as Nigeria or North Dakota, this nuisance gas could have been quickly disposed of by flaring or venting. However, with some foresight, Australian industry regulators have generally discouraged such wasteful and environmentally damaging practices.
Faced with this constraint, what were the resource companies to do? Unlike crude oil, gas is costly to ship to the more lucrative markets in Japan and Korea, first requiring liquefaction at temperatures as low as minus 160C. Creating new demand “sinks” for gas in-country was one strategy. Pipelines were built to connect up all of the eastern states. Still, this “domestic” gas languished at a sales price far below that of crude oil.
Coal seam gas arrives
Then in the first decade of this century came the realisation that coal seam gas (CSG), located mostly in Queensland but also in New South Wales, could be produced in quantities far exceeding the demands of the staid domestic market, by a factor of three or more.
Following the examples of Western Australia and the Northern Territory, the only option for gas companies was to invest billions of dollars in, at last, building the first liquefaction and export facilities on Australia’s east coast.
For legacy gas producers, even those not directly involved in the LNG-export decisions, this was the dream come true. After decades, a buyers’ market rapidly shifted to become a sellers’ market. Where previously buyers would remind producers they would be happy to take that “waste product” off their hands, producers could now inject into supply contract negotiations the spectres of “world-parity pricing” and “high CSG production costs”.
Nowhere in the world had it ever occurred where an established, reasonably large domestic market, serving customers ranging from large industry to millions of homeowners, was suddenly eclipsed by the mammoth export-focused LNG industry.
Eastern Australia gas demand peaked - three years ago
Even before the launch of the first LNG export cargo from Queensland late last year, major gas buyers raised concerns about future gas costs and contractual availability. The Australian Competition and Consumer Commission is examining transparency and barriers to competition in the gas industry.
When the New South Wales upper house held an inquiry into gas supplies earlier this year, it gave us, at the University of Melbourne Energy Institute, the opportunity to present our analysis of declining future gas demand in that state. Now Victoria’s upper house is likewise having an inquiry where we will present aspects of our extended research into gas supply and demand across all of eastern Australia.
The eastern Australian gas market has experienced significant upheaval and will continue to change over the next ten years. Data from the Australian Energy Market Operator indicates that the volume of gas used in eastern Australia peaked three years ago.
Gas demand will continue to decline across all sectors. In the electricity-generation sector, with rising gas prices, the abolition of the carbon price, and a surplus of coal-fired generation, gas will only be sparingly used. The Australian Energy Market Operator is also forecasting a steep drop in the amount of gas used by industry.
Do try this at home: fuel-switching from gas to electricity
The amount of gas used in buildings will also decline. As we shiver here in Melbourne, how would you like to reduce your heating costs by up to, say, 70%? If interested, you have to do two things: (1) turn your gas heater to “off” and (2) turn your reverse cycle air conditioner to “on” – on heating mode of course!
<a href="/images/2015/07/20/image-20150717-5067-1y3854o.jpeg" target="_blank">Click to enlarge</a>
<img src="/images/2015/07/20/image-20150717-5067-1y3854o.jpeg" alt=""> 
 
In my home we did that for the first time this winter. Our savings are remarkable, though not surprising nor different to what others in the community are reporting. As an example, during two particularly blustery days I found I could comfortably heat my house one day with gas at an energy-only cost of A$4.80 and then do it the next day with my air conditioner at a cost of just A$1.50. Our savings across the full heating season will add up to hundreds of dollars.
Results in other homes will depend on factors including what you pay for electricity and gas, the efficiencies of your gas heater and air conditioner, where your heat sources are located within your home, and individual comfort and convenience preferences. But it should not be long before word gets out to the 4.4 million Australian homes that already have at least one reverse-cycle air conditioner.
Previously I reported on the similarly large savings possible by using an efficient heat pump to heat water, especially if you have excess self-generated solar electricity. Add an induction cooktop and there is no economic need to connect gas to most Australian homes<a href="https://www.ata.org.au/news/are-we-still-cooking-with-gas">.</a> Businesses are springing up that offer “all-electric” home conversions” to people interested in making the switch.
Collectively, homes are large consumers of eastern Australian gas. This coming “second-era of Australian home electrification” will have a big impact on gas and electricity supply-demand dynamics over the next decade.
Tim Forcey is energy advisor for the Melbourne Energy Institute and also an author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/tim-forcey-104740" target="_blank">here</a>.
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