Bernie Ripoll (Oxley, Australian Labor Party, Shadow Parliamentary Secretary for Industry, Infrastructure and Industrial Relations) Share this | Hansard source

Like the member for New England, I too am amazed at the number of the people in the gallery tonight. I am always appreciative of that, so I thank him for pointing that out to us. I rise to speak on the Fuel Tax (Consequential and Transitional Provisions) Bill 2006. I think this is a very important bill. It is important not only because of the issues it raises but also because of what it does not do and what the government has not done to properly deal with fuel and the fuel industry more broadly. That said, I broadly support the intent of this bill but I also support the second reading amendment moved by the member for Hunter as the correct way forward on this critical issue. The government, as in so many other important areas of public policy, has been slow to respond to issues which affect the daily lives of so many people, in particular the price of fuel. It has also been slow to respond to the challenges facing this nation with regard to the fuels industry. I will address these issues in this debate and will deal with the bill more directly.

This bill amends several acts in order to implement the Fuel Tax Credits Scheme. It continues a major change of the fuel taxation system in Australia, which other speakers have pointed out. I also make the point in my contribution that the current arrangements for fuel taxation in this country are exceptionally complex and difficult to work with. The explanatory memorandum states:

These Bills provide a single system of fuel tax credits to remove or reduce the incidence of fuel tax levied on taxable fuels, and a framework for the taxation of gaseous fuels from 1 July 2011, when fuel tax is levied on liquefied petroleum gas, liquefied natural gas and compressed natural gas for the first time.

The fuel tax credits system effectively means that all taxable fuel acquired, manufactured or imported for use in off-road applications for business purposes will become tax free over time. Under the fuel tax credits system, fuel tax relief will be expanded for fuel used in road transport. The amendments should generally simplify the administration of the existing system of grants for fuel use. The move to apply the administrative rules that apply to other indirect tax laws to the proposed Fuel Tax Credits Scheme should also assist with administration. As I said, this is a move in the right direction but leaves unattended some of the more critical issues of the cost of fuel for ordinary people and a number of other critical issues involved in this matter.

Labor has long supported the basic reform program. In fact, Labor has led this debate and has advocated reform in the oil and fuels industry for some time. Labor has been instrumental in providing a longer phase-in for the introduction of fuel tax for liquefied petroleum gas, liquefied natural gas and compressed natural gas to assist the development of these industries. Labor also supports the requirement for environmental requirements to be met by major fuel users as part of the fuel taxation regime. The second reading amendment of the shadow minister, the member for Hunter, states:

That all words after “That” be omitted with a view to substituting the following words:“whilst not declining to give the bill a second reading, the House:

(1)

condemns the Government for failing to properly consult with commercial fuel users on the appropriate model for payment of fuel tax;

(2)

condemns the government for circulating major amendments less than two hours before debate on the Bill is to be resumed;

(3)

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 hydrogenas Labor has committed to in its Fuels Blueprint;

(4)

condemns the Government for ignoring the impact of rising petrol prices on Australian families;

(5)

condemns the Government for increasing petrol prices in regional Australia through the abolition of the Fuel Sales Grants Scheme at a time of very high petrol prices;

(6)

condemns the Government for failing to strengthen the Trade Practices Act to protect competition in the petroleum industry; and

(7)

condemns the Government for failing to guarantee that the money saved as a result of the abolition of the Fuel Sales Grants Scheme will not be specifically directed to roads in regional, rural and remote Australia”.

These are all sensible things that the government should be doing of its own volition; they are not things that the opposition should have to thrust upon the government.

In discussing the detail of this bill, there is an opportunity for me to range over a number of areas, including some of Labor’s initiatives in the fuel industry. Firstly, I would like to point out that Labor understands that government does have a significant role to play in helping to ease the pain for Australian families at the petrol bowser. This is no longer a simple issue of cost; it has become a critical issue in families’ budgets and how they plan to spend their weekly, fortnightly or monthly pay packets.

Labor and the Leader of the Opposition, Kim Beazley, put the Prime Minister on notice over petrol prices last June. Labor has put forward a plan specifically to tackle this issue, but before I go into what our plan includes, I make the point that something positive, something concrete, something definite can be done. If the government claims, as it often does, that it does not control the levers of the price of petrol and that it is a global market—it talks about price parity and a whole range of things—I would say to the government: ‘You are just not trying hard enough. You just do not care enough; you are not willing enough; you are not doing enough.’ There is something that can be done. There are a range of measures that can be brought forward. Labor’s plan includes, in particular, applying the competition blowtorch to the industry by strengthening the Trade Practices Act to prevent abuse of market power. The pricing issues and the abuse that takes place in the fuels industry are significant. You do not need to be an expert in this matter to understand it. Most, if not all, consumers understand what happens at the bowser in profiteering and pricing issues.

The second thing that the government could be doing and that Labor plans to do is to have the Australian Competition and Consumer Commission, ACCC, investigate petrol prices and report every six months on price movements—particularly in regional Australia, in areas where there is significant movement and significant cost to so many people in the bush. Thirdly, Labor would modernise the 25-year-old regulatory regime for the petrol fuel sector, to promote competition and protect independent service station operators and franchisees. This is something that I am particularly concerned about and interested in. If the government continues to talk about competition as the great driver of downward pressure on prices, then it should promote fair competition, and it should do it through a fair, modernised regulatory regime—something that can actually have some impact.

I will take this opportunity to mention something that the member for New England mentioned and which I am sure others will as well. I refer to the comments made by Senator Barnaby Joyce, who has been quoted as warning ‘the Petroleum Retail Legislation Repeal Bill 2006, which introduces a new regulatory scheme for petrol, will drive independent service station owners out of business’. I do not think that is healthy for the country; in fact, I do not think that is very healthy for the fuels sector or for service stations in this country. More importantly, I do not think it is very healthy for the consumer. I think less competition is a bad thing. I think less choice in the petrol station you go to is generally a bad thing. Senator Barnaby Joyce, a coalition member, agrees with that. He thinks it is a bad thing and he says that what this government is doing is bad—in fact, he believes it is so bad that he has threatened to vote against the government and to cross the floor unless amendments are made to the Trade Practices Act to further safeguard independent fuel retailers. I say to Barnaby Joyce, ‘Hear, hear!’ He should be out there condemning this government on this bill, because it just does not do enough, and some of the things that it does go in the wrong direction. It does not go anywhere near far enough to protect independent service station operators and franchisees.

The final measure in Labor’s plan is to reduce our reliance on imported oil and to grow an Australian fuel industry. This is a very important part of our plan because it is another area that the government just feels too comfortable and relaxed with and does absolutely nothing on. Not only do we need to promote competition and ensure a strong regulatory regime; we need to ensure that there is a viable, strong Australian fuel industry that is supported by government in the right manner. We need to invest in alternatives and support innovation. We need to ensure that we as a nation do the right thing.

I will come back again to the member for New England because he mentioned hundreds of millions of dollars in grants going to the fuel industry. This is an area where the government could seriously look at how that money is spent, the areas it is spent on and what innovations could come out of that investment from the national government in the fuel sector.

Labor’s plan is to provide a real future for the biofuels industry by providing a government fleet market for ethanol blends, to set an example and help grow the industry. I think you have to lead by example in an area like this. There has been a lot of scaremongering about biofuels, about ethanol blends and about what they do and do not do to your vehicle. Government could lead by example by using ethanol blends in all government vehicles. The Queensland government is leading the way in this and doing a very good job of it, and there is a slow but steady take-up of ethanol blends. I think that is something positive that should be supported, because it goes to the heart of a range of things that our plan for the fuel industry does. It is about the long term. It is about investing in the future. It is about fuel security. It is about being fuel independent over the long term. It is about building industry. It is about looking to the future. These are the things that are lacking in this government’s approach to the fuel industry more broadly.

I also want to take this opportunity to talk about alternative fuels. The Australian Labor Party also has a plan to develop a diversified Australian fuel industry. Labor knows that Australia must develop and use those fuels that will become cheaper in the future, that are sustainable and renewable. We must look to the future. We must have fuel security. We must be independent. Australia must foster demand for new Australian fuels and fuel technologies, with governments at all levels playing a role. I think that is also key here. We need agreements between local, state and federal governments, particularly in these areas.

Australia needs national leadership to develop this, though. It can do it in three ways: by existing alternatives like liquid petroleum gas, ethanol and biodiesel; by emerging alternatives such as compressed natural gas, liquid fuel from gas and stored electricity; and by looking towards future fuels, such as hydrogen. There are options for government. Government needs to be interested. That is the key point I am making here: unless government takes an interest, nothing happens at all.

Australia needs to develop the technologies to make it happen. Our transport fuel markets need a fresh blast of competition—competition that, in the end, will drive development. To this end, a future Labor government will work with the states to steadily and sensibly convert public transport to alternative fuel usage and to ensure that the Commonwealth government car fleets run on alternative fuels. As I said previously, the states are already moving in that direction, and I congratulate them for that. Again, this is an area where the federal government could show some leadership and flow that on to other areas.

A future Labor government will also work with state and local government to give city traffic and parking advantages for alternative fuel vehicles or hybrid vehicles and the like. There must be rewards for people who do the right thing, who are using alternatives and trying to make a difference. If you do not reward people, they will not necessarily take up those advantages. Also, a future Labor government will make alternative fuel vehicles tariff free, cutting up to $2,000 off the price of current hybrid vehicles. Again, you must reward people for making the right choices.

Finally, a future Labor government will examine the granting of tax rebates for converting petrol cars to LPG. This has been a pet issue of mine for some time. I just cannot understand why, in the current fuels environment, government does not get more involved in a readily available resource, in something that could be easily dealt with and in trying to assist people in converting petrol cars to LPG and looking at other incentives.

These measures over a fixed period would help spark consumer interest and raise awareness of alternative fuel choices. In the end, we need to give people choices—not the rhetoric of choice but real choices—at the petrol bowser, where they can decide on the types of fuels that they will be using and the sorts of prices that they will pay. For example, some 500,000 Australian vehicles at the moment run on autogas. In fact, car conversions from petrol to LPG have risen 14 per cent in the last 12 months. That is pretty obvious, given the high petrol prices. Certainly, in years gone by, the percentages of people converting cars over were going backwards because there was just no incentive for people to move in that direction.

The NRMA announced last year that its fleet of 400 service vans would move across to LPG, cutting 60 per cent off its $2 million fuel bill annually. There should be a message in that to a lot of businesses to look at the cost of conversion and the sorts of fuel savings they could enjoy by moving in that direction. In this regard, an example can also be found within the State Transit Authority of New South Wales, which has 404 compressed natural gas powered buses in Sydney. CNG powered buses are quieter than diesel powered buses. Obviously CNG makes a great alternative to regular fuels—and CNG is an Australian resource, whereas diesel is largely imported. State Transit purchases $30 million worth of diesel fuel annually, so I think people can quickly see the sorts of advantages and savings that can be made by moving in this direction.

There is now a willingness to use alternative fuels that has not previously existed in Australia. The LPG industry itself has set a target to increase the use of autogas to 10 per cent of all motor vehicles by 2010. If only the Howard government, the federal government, would be as decisive and back it with programs and incentives. Consumers are also showing a strong interest in the emerging technologies of hybrid cars, for example. Last year, over 1,000 hybrid electric cars like the Honda Civic and the Toyota Prius were sold in Australia. But if we want to see real numbers of people driving these cars on our roads then the federal government ought to take an interest and look at how they deal with this area. These are small but significant steps. If consumers are prepared to embrace new technologies, they need to be given real choices by government. They need to be given assistance in making those industries work and in making those choices work for them as well.

I would like to speak just a little further on the need to develop new industries in this country, specifically about gas to liquids and coal to liquids technology, which I think are exceptionally important in the current debate. The Labor Party has always been a great supporter of GTL and CTL. In fact, my colleague the member for Batman, Martin Ferguson, has been speaking about this issue for quite some time—and for good reason, because it is in the best interests of the nation. Establishing new nation-building industries is obviously not easy. It requires leadership. If this government is not prepared to provide it then the Labor Party is prepared to and will do so.

Unfortunately, as I have said at a number of points in my contribution, the federal government are seriously asleep at the wheel on this issue. They turn to the fact that it is just a global market and it should be left to global market forces to drive all of these matters. They are simply wrong. In fact, some people would remember that about five years ago Senator Nick Minchin, the then Minister for Industry, Science and Resources, appointed a GTL Taskforce to investigate the feasibility and benefits of establishing a GTL industry in Australia. That task force came up with this conclusion:

Provision of common user infrastructure is a legitimate way in which Australian governments could facilitate the establishment of a GTL fuels industry.

Five years later, though, there has been no action. It was a good report with some sensible recommendations—something the federal government could invest in and do something about—but five years later: no action. Obviously there is no imperative from government to deal with the issue of fuels. The task force also highlighted the potential significance of a GTL industry to Australia’s economy. It said:

These benefits would be of national strategic significance to Australia ... The cost of any government intervention must be considered against the potential benefits.

Again, that is wise counsel, which, unfortunately, has been ignored by the government. As has been pointed out by Labor’s resources spokesman, the potential benefits go beyond unlocking new resource wealth and creating new industry, more jobs and more experts. They include the opportunity for Australia to address this most pressing of problems: our future transport and fuel security.

In the final few minutes I have I would like to make mention of a couple of other points in relation to fuels generally. In my view, the price of petrol has gone beyond what it costs to get to work and to go on a Sunday drive. It is now as critical to people as the underlying cost of their mortgage and as critical—and watched as significantly—as an interest rate rise, because the impact of fuel prices today on the family budget is as significant as a quarter per cent rise in interest rates. Families are under a lot of budgetary pressure. While the government crows about a strong economy, most families are living well but are at breaking point. Although there are low interest rates in Australia—comparatively high for the rest of the world—families cannot quite seem to manage. If people were to lose their job for just four weeks, most would be in serious trouble, much more trouble than they would have been when interest rates were, for a very brief period, at 17 per cent, and I think the government ought to look at that very closely. (Time expired)

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