Kelly Hoare (Charlton, Australian Labor Party) Share this | Hansard source

I rise tonight to speak on the Fuel Tax Bill 2006 and cognate bill. The purpose of this legislation is to implement a system of credits to offset partially or fully the excise that some taxpayers pay on fuels and to lay the groundwork for extending the tax net to alternative fuels. All of us come to debates in this place with different approaches, and I understand that the members who have spoken so far on the Fuel Tax Bill have done so for a variety of reasons. We just heard the member for Hinkler talk about his constituents and the industries in his electorate. I heard the member for Lingiari talking earlier about the effect that fuel prices have on people who live in the remote parts of this country. I usually come to these debates with either an interest in the particular subject or a concern about how the legislation will have an effect on my constituents, and in this case I have come to it with both of those.

When I saw the Fuel Tax Bill 2006 and the Fuel Tax (Consequential and Transitional Provisions) Bill 2006 listed for debate, I thought that this would be the perfect opportunity to talk about the rising cost of fuel and how that affects my constituents. But as you know, Mr Deputy Speaker, as we research legislation sometimes it can be revealed how complex the issues are, and that is what I have found with this legislation—how complex the current system is and how complex it is still going to be even though it will be simplified a bit. It just emphasises the whole gamut of issues that the legislation addresses and how governments and oppositions need to be on top of that. To that end, I thank the member for Hunter for his assistance in providing all the information that is required for this particular legislation and talking us through the various complexities.

The bill constitutes major reform of fuel tax in Australia. It will provide for a single system of fuel tax with associated credits; reductions in the incidence of fuel tax levied on taxable fuels; a staged introduction of a framework for the taxation of liquefied petroleum gas, liquefied natural gas and compressed natural gas from 1 July 2011; a staged reduction in tax assistance for biodiesel and domestic ethanol; and the linking of fuel credits to environmental standards. Most of these are welcomed by the opposition.

The government actually released a white paper on this issue, back in 2004, which planned to have this new system in place by 1 July 2006. On 29 March this year, two years after the government’s white paper was produced, the government finally introduced the Fuel Tax Bill, to be implemented on 1 July 2006. So somebody has been going through the shelves of the Minister for Industry, Tourism and Resources, come across this white paper, had a look at it and thought: ‘In 2004 we made a promise that we were going to introduce these changes by 1 July 2006. It’s nearly that time so we’d better get a move on.’ Even so, we have seen the government circulating, two hours prior to this debate starting today, more amendments to this legislation. I said that the member for Hunter was on top of this legislation. It is very concerning to see that the government is not.

The current arrangements for the taxation of fuel are highly complex and there has been scope for rationalisation. The taxation of petrol is based on a non-indexed excise. This bill does not change the taxation of petrol for basic household motor vehicle use, which a lot of my constituents would be very concerned to hear. There is currently a grant available for diesel fuel under the Energy Grants (Credits) Scheme. There is an on-road credit, which includes alternative fuels, for vehicles over 20 tonnes, for vehicles between 4½ and 20 tonnes and for vehicles operating outside or across metropolitan boundaries. There are off-road credits which apply to business usage. There is a fuel sales grant, under the Fuel Sales Grants Act, of 1c to 3c per litre of gasoline or diesel fuel in non-metropolitan areas. There are remission certificates which apply to exempt commercial users, in industries like plastics and chemicals, from excise or customs duty on certain fuels. This legislation seeks to consolidate these measures into a single fuel tax regime with credits achieved through the BAS reporting system. Many users will effectively receive the same level of tax, albeit under different administration arrangements, but some users will face significant tax reductions and there will be higher tax for some on-road use. Aviation fuels are excluded from this fuel tax credits system.

The member for Hunter has moved an amendment which covers seven points that the opposition is concerned about. Of those seven points, the third point addresses some of the points that I would like to make now. The legislation that is before us does not do anything to reduce Australia’s dependence on foreign oil. The amendment:

... calls upon the Government to reduce our dependency on foreign oil and to promote:

(a)

existing alternatives like liquid petroleum gas, ethanol and biodiesel;

(b)

emerging alternatives such as compressed natural gas, liquid fuel from gas and stored electricity; and

(c)

future fuels, such as hydrogen as Labor has committed to in its Fuels Blueprint;

That fuels blueprint was released on 19 October last year by Kim Beazley, the next Prime Minister of this country. Labor’s third blueprint is titled Developing the Australian fuel industry. As Kim Beazley pointed out:

We need national leadership to develop:

• existing alternatives like liquid petroleum gas, ethanol and biodiesel;
• emerging alternatives such as compressed natural gas, liquid fuel from gas and stored electricity; and
• future fuels, such as hydrogen.

A Beazley Labor government would re-examine the depreciation regime for gas production infrastructure and allow the selective use of flow-through share schemes for smaller operators. A Beazley Labor government would make alternative fuel vehicles tariff free, cutting up to $2,000 off the price of current hybrid cars; work with state and local government to give city traffic and parking advantages for these vehicles; and examine the granting of tax rebates for converting petrol cars to LPG. A Beazley Labor government would also conduct a feasibility study into a gas-to-liquids fuels plant in Australia, offer petroleum resources rent tax incentives for developers of gas fields which provide resources for gas-to-liquid fuels projects, examine a new infrastructure investment allowance for investment in Australian gas-to-liquid fuels infrastructure, develop a targeted funding scheme for research and development in this area, and work with industry to improve engine design and fuel quality standards.

There is a huge opportunity for Australia arising from the biofuels and alternative fuels debate. We do have too much reliance on overseas oil, which is then reflected in the hefty prices that the mums and dads and grandmas and granddads of this country pay at the bowser every time they fill up their car’s tank with petrol. However, this government has not embraced this opportunity, so this issue will be on the minds of all Australians at the next election. People are sick and tired of paying up to $1.50 a litre—and that is in my region, let alone regions in remote Australia—for petrol, which will probably go up to close to $2 before the next election. While they are paying that price for petrol, they are losing money from other areas of their family’s budget such as children’s sporting activities and airconditioning for the home. Different family activities might have to go by the wayside because parents have to pay more to put petrol in their car to undertake day-to-day living. So I think a Beazley Labor government’s approach to biofuels and alternative fuels will be supported by the Australian public.

On the question of fuel prices: we have just come out of the long weekend holiday, when many Australian families take to the road to make the most of a three-day long weekend. As we see most times coming up to public holidays—Easter, school holidays, the long weekend in June—we saw the fuel prices soar. We have been encouraging the government to give the ACCC more powers to monitor fuel prices, to make hard decisions on the spikes in fuel prices and to punish those oil companies or petrol station owners who take advantage of these particular vulnerabilities in our community. On the World Today on Friday, 9 June, Brendan Trembath was interviewing Lachlan McIntosh, who is the Executive Director of the Australian Automobile Association. Lachlan said:

Well, we saw a big spike in the Eastern states yesterday, up10 or 12 cents a litre—

That is 10c or 12c a litre in one day. He said:

We didn’t see the same rise in Perth. Perth doesn’t have a long weekend coming, so their prices are 10 or 12 cents a litre cheaper. I hope as a result of our analysis that doesn’t drive the price in Perth up, but it is sort of pretty annoying.

The newspapers were full of similar stories. An article in the Brisbane Sunday Mail on 11 June talked about the price peaking at $1.35 for a litre of unleaded petrol:

The surge prompted fresh calls for a thorough inquiry into the fuel industry with both the RACQ and the Queensland Consumers’ Association demanding a vigorous probe by the Australian Competition and Consumer Commission ...

The RACQ’s Ken Willett said:

... motorists were being charged six cents a litre more than was justified by movements in the international price of oil.

Going from one end of the country to the other, the editorial in the Herald Sun, titled ‘Pumped dry’, said:

... service station owners say that some people are trying to swap mobile phones and wrist watches for fuel.

That is a disgraceful situation that we are in, that families cannot afford to put petrol in their cars and are going to trade off things that they now take for granted, whether it be their wristwatches or their mobile phones.

In response to this the member for Hunter, our shadow Assistant Treasurer, put out a statement about John Howard’s refusal to grant the ACCC the powers it needs to scrutinise petrol prices, saying that the Prime Minister does not treat the concerns of motorists seriously. In 1997 the Trade Practices Act was amended to remove the power of the ACCC to continually monitor petrol prices. The Prime Minister cannot just say to the ACCC: ‘Have a casual look at it over the weekend. Let me know if you find anything untoward.’ The ACCC does not actually have the powers to be able to do anything about that. As the member for Hunter stated, the Treasurer should be writing to Graeme Samuel of the ACCC to demand that they ‘begin thorough monitoring of petrol prices as provided for under Part VIIA s95G(6) of the Trade Practices Act’. The Prime Minister and the Treasurer will not do this. The Australian public keeps getting slugged at the bowser because of this. This legislation goes no way to addressing any of these problems.

Labor supports the basic structure of this bill as a more sustainable basis for fuel taxation in Australia. In particular, Labor supports a revised timetable for excise rises for alternative fuels. This was a concession for these emerging industries that was won after significant pressure from Labor. However, there were aspects of the bill that appeared to be problematic. One of those in particular was in relation to claiming the rebate either quarterly or yearly, as some businesses would, because that is when they currently put in their business activity statements. Labor will continue to work with affected sectors and will continue to seek some relief from these provisions. We will continue to try and work so that these provisions do not adversely affect the industry sectors in the years to come, as these regimes are being phased in.

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