Kelvin Thomson (Wills, Australian Labor Party, Shadow Minister for Public Accountability and Human Services) Share this | Hansard source

Thank you for your guidance, Mr Deputy Speaker. They should use those dollars to get us off our dependency on imported petrol and onto environmentally responsible, less greenhouse-emitting sustainable fuels such as natural gas and, ultimately, hydrogen. Back in 2001 the government claimed that the GST would not lead to higher petrol taxes. That claim is rubbish. Freezing excise has not worked. The government gets more in additional GST through rising petrol prices than it would have got from the indexation of excise. That promise has turned out to be absolute codswallop—a noncore promise.

Information which I have collected on the period 2000-01 through to 2004-05—for which relevant information is available—shows that the amount of excise forgone has moved from $90 million in 2000-01 up to $1.1 billion in 2004-05. However, at the same time the GST take has been steadily rising, as I indicated to the House previously, from $1.4 billion to $1.5 billion, $1.6 billion and $1.8 billion. So, during the relevant period, all up we get an increase in the petrol tax take of the combined order of over $4½ billion. Of course, this is occurring at a time when motorists are experiencing plenty of petrol price pain. Indeed, I understand that unleaded petrol prices were as high as 143.9c a litre in Sydney today and at a record average of 147.6c a litre in Bega on the New South Wales South Coast. Prices hit a high of 139.9c a litre in Melbourne after peaking at 142.8c a litre on Thursday. This is against a background where the petrol prices in May were said to be at a new record high, with the national average approaching the $1.35 a litre mark. Back in May the Australian Institute of Petroleum reported that $1.35 was the record; it looks as though that will be eclipsed when the latest figures come out.

Given these circumstances, I think it is quite inexcusable that the Howard government has failed to act on Australia’s growing import dependence and its impact on energy security and fuel prices. We are now importing 60 per cent of our oil. For the past seven years, we have been using oil three times faster than we have been finding it. Given this, a do-nothing strategy is not an acceptable option. It sells Australia short and, if it continues, it will seriously damage regional Australia. What can we do about it? One thing we ought to do is to give up some of the foreign policy adventurism which has been so catastrophic and which I have spoken about on a number of occasions. But, with international oil prices so high, the second thing we can do is to increase competition in the Australian petrol retailing industry.

Labor produced a plan to put downward pressure on petrol prices, seeking to break down the power of the big oil companies and help consumers. That plan included amending the Trade Practices Act to guarantee independent wholesalers and retailers access, on fair terms, to fuel supplies from the terminals of the major oil companies; allowing independent wholesalers and retailers to bargain collectively when seeking fuel supplies from the terminals of the major oil companies; outlawing predatory pricing under the Trade Practices Act and strengthening section 46 to stop the abuse of market power, thereby protecting independents against the market power of the big companies; giving the ACCC the power to issue cease and desist orders to provide immediate relief against market abuse and anti-competitive behaviour; granting the courts power to order the divestiture of assets and impose jail terms to tackle cartels and the worst cases of market abuse; and establishing a yellow card system, which would enable the ACCC to keep a register of bona fide complaints of misuse of market power to be used for assessing penalties for proven breaches of the Trade Practices Act.

However, the most important thing we can do to give Australia real energy independence is to use some of our huge gas reserves to produce liquid based transport fuels. We have something like 140 trillion cubic feet of offshore gas reserves that, using current technology, could be transformed into what amounts to a limitless supply of transport fuel, which is well and truly commercially viable and would remain viable even if there were a fall in the oil price. We should be taking advantage of these riches to insure Australia against physical supply shocks and give this nation genuine energy independence. The government ought to be making Australia a place of gas to liquids production. We should neither be sitting on our reserves while the price of our transport fuels continues to skyrocket nor be exporting everything we can find and letting other countries do the value adding, guaranteeing that our current account and trade deficits will continue to rise.

We need to do more to promote biofuels, LPG, CNG and synthetic fuels produced from gas-to-liquids technologies. There is much more that we can do on this front. I commend to the House an issues paper produced recently by the Australian Petroleum Production and Exploration Association. The particular parts of that paper which I find interesting and significant are those which go to the use of gas and using that, in the paper’s own words, as ‘a platform for prosperity’. The paper points out that gas is becoming increasingly important in the global energy mix, that Australia has abundant natural gas resources and that these provide great opportunities for us, as gas is a cleaner and less greenhouse intensive fuel than coal.

The paper notes that, even though significant gas reserves have been discovered, many remain undeveloped. It goes on to say that there is great potential in the development of an Australian gas-to-liquids industry. It also mentions coal to liquids, biodiesel and ethanol as part of a response towards a sustainable fuels policy for this country. It notes that the commercialisation of gas-to-liquids diesel technology is still in its infancy but that it may provide Australia with a viable additional source of hydrocarbon liquids generated from its large gas reserves. The paper indicates to us that the opportunity exists to develop new Australian LNG projects of between 30 million tonnes per annum to 50 million tonnes per annum by the year 2015. The commercialising of gas technologies would enable us to move into the area of electricity generation and also the increased conversion of gas to various forms of liquids. There are, of course, forecast capacity additions to Australia’s alumina refining capacity, and growth in gas fired electricity generation would be very useful given that background.

They do note as constraints that the current fiscal regime is perceived to be more attractive for oil than for gas and they also note as a constraint the fact that the market is very fractured and that you do not have a link between the gas pipeline networks in Western Australia, the Northern Territory and eastern Australia—that is to say, an absence of interconnecting natural gas pipelines between these regions. The lack of interconnections between the Western Australian, Northern Territory and eastern markets results in price differentials and lost opportunities for increased gas utilisation.

Given that problem, the paper does of course refer to the possibility of the establishment of a national pipeline grid at some stage and notes that cross-country pipeline connections have many stakeholders and any final commitment would take years to develop—indeed, is likely to take 10 years from the commencement of feasibility studies to actually switching on the gas supply. Nevertheless, it seems to me that this is precisely the kind of national infrastructure debate we ought to be having. It is a far more productive debate, quite frankly, than the debate about a nuclear reactor which the Prime Minister has established and which seems to me to be simply a debate about dividing Australians and setting us at each other’s throats—more about that than providing the kind of infrastructure which would really give us a sustainable energy policy into the future.

The paper also notes that there could be a role for government in addressing the shortage of skilled labour. It is one of the things that it sees as a problem in the promotion of the upstream oil and gas industry. I agree with that absolutely. I think there is certainly a need for more university and TAFE places to deal with the skills shortage. Finally, it comments on some of the greenhouse issues and makes some remarks concerning an emissions trading regime. I think an emissions trading regime is essential for this country. Indeed, I believe it would prove to be of considerable assistance to the gas industry and would enable them to flourish, which they need to do to meet Australia’s future energy needs.

It is not just the Australian Petroleum Production and Exploration Association which has been at work in developing policies to give Australia a more secure, a more environmentally responsible and a more sustainable energy future but also the opposition. Late last year our leader, Kim Beazley, produced a blueprint concerning the development of Australia’s transport fuel industry. The sorts of policies set out in that blueprint and also referred to by the member for Hunter in his amendment show an opposition keen to take Australia in the right direction of transport fuels. The paper notes that we need to increase the use of Australian transport fuels and reduce our reliance on foreign oil. It notes that we need national leadership to develop existing alternatives like liquid petroleum gas, ethanol and biodiesel and that we need leadership to develop emerging alternatives such as compressed natural gas, liquid fuel from gas and stored electricity as well as future fuels such as hydrogen. Of course, in doing so, we make Australia less vulnerable to future energy shocks, we make Australia less reliant on foreign oil, affecting our trade deficit and our foreign debt, and we make Australian motorists less vulnerable to the slings and arrows of fortunes in the Middle East and in other parts of the world. We also invest in preserving our environment by diversifying our fuel base beyond petrol to biofuels, gas and hydrogen.

When we consider what has happened to the price of petrol and the availability of petrol over the last few years we would have to ask, if we look down the road, if we look down the time tunnel: where is this going? Surely, the prospects in the future are for falling production and higher demand, and in that case prices will soar. The sorts of problems we are experiencing presently will not improve. They are not a one-off, they are not exceptional; they are things which are going to become more serious. In the past three years we have seen global oil prices triple. The era of cheap oil is over.

Given that background, it is quite regrettable that the Minister for Industry, Tourism and Resources has been failing to do the work needed for the government to prepare Australia for the effects of future peaks. My colleague the member for Melbourne, who is in the chamber, asked the minister for industry in June last year about the work that the government was doing to prepare Australia for the effect of future peaks. He asked whether the government had estimated when this might happen, what the decline in global production might be, what the impact on prices might be and whether the government had done any modelling of the impact on the Australian economy. The minister’s answers were no, no, no and no. The industry minister has also said:

At this stage Australia’s fuel security is still good ... Do we need to find more oil? Yes, we do. But short of finding more oil I don’t know what the solution is.

This is simply pathetic. This is a council of despair which Labor rejects. The plans that we have put forward, our transport blueprint, mean that we do have something to offer Australia and its energy future. (Time expired)

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