Daryl Melham (Banks, Australian Labor Party) Share this | Hansard source

I rise tonight to speak on the Fuel Tax Bill 2006 and the Fuel Tax (Consequential and Transitional Provisions) Bill 2006. Typically, the government has provided insufficient time for the opposition to analyse the amendments to this legislation. Those amendments were made available only two hours prior to the commencement of this debate. The systemic lack of professionalism and parliamentary courtesy is becoming a hallmark of this government. This is not the first time that the government has done this and I suspect it will not be the last. At this point in time we have also not been able to consult the report produced by the Senate Economics Legislation Committee. As I understand it, that report was to be tabled this afternoon in the Senate but has now been held over for tabling tomorrow.

Australians have a right to expect that their parliamentary representatives conduct debate in an informed manner. This is becoming impossible through the government’s appalling discourtesy and diminishing respect for the parliamentary process—this by a Prime Minister who campaigned prior to his election on the premise that he would raise parliamentary standards. I can tell you, Mr Deputy Speaker, that in the last decade parliamentary standards have fallen. It is all emanating from the arrogant way the government has conducted itself.

Having noted my concerns about the shoddy manner with which the government is dealing with this legislation, I will move on to discuss the bills before the House this evening. With my constituents I remain concerned about the rising cost of petrol for the domestic user. It is this concern which will underpin my remarks this evening. Motorists are understandably upset at the price of petrol. When challenged on this the Prime Minister commented:

... world prices are not something the Australian Government, or any government, can influence.

Let us accept that as a premise. Logically the next question is: what is the government doing about developing alternative strategies to minimise our dependence on world oil and world oil prices? Not a lot, it would seem. In 2004-05 Australia spent almost $15 billion on imported crude oil and refined petroleum. In net terms, Australia relies on imports for 17 per cent of its overall petrol consumption. By 2020 the Australian Bureau of Agricultural and Resource Economics estimates the figure will rise to 46 per cent.

These bills go a very little way to addressing the fuel crisis in which this country finds itself. We must seek ways to diversify our fuel base and establish alternatives. The other side of the picture reveals that, if we do nothing, we will increase our dependence on oil supplies from the Middle East, West Africa and Russia. These are not countries noted for their stability, yet we will be forced to rely on these countries for our fuel supplies. The member for Batman has already commented on the implications that has for energy security.

I particularly note those aspects of the bills which propose new environmental measures: the requirement for large fuel users to be a member of the Greenhouse Challenge Plus program and vehicles using diesel fuels in on-road applications to comply with emissions performance criteria. For the record, I note that Greenhouse Challenge Plus is designed to reduce greenhouse gas emissions, accelerate the uptake of energy efficiency, integrate greenhouse issues into business decision making and provide more consistent reporting of greenhouse gas emission levels. Certainly, Greenhouse Challenge Plus is a tiny move in the right direction to reducing greenhouse gas emissions. Despite this small move forward, I believe Australia must develop a diversified fuel industry. We need cleaner fuels. Australia has fallen behind the rest of the world in the development of a fuel industry plan. In the past three years global oil prices have tripled. One of the results is that business margins are affected and, as that occurs, so consumers face higher prices. We are seeing that pattern now with the recent increase in petrol prices at the pump. It is not unrealistic to expect that the government give consideration to preparing this country for the inevitable future peaks in the price of petrol. Our dependence on foreign oil is growing. Petroleum based fuels account for 97 per cent of Australia’s total transport fuel needs. We are, however, consuming oil three times faster than we are finding it.

In developing a diversified fuel industry, we should expand existing alternatives like petroleum gas, ethanol and biodiesel. We should develop emerging alternatives such as compressed natural gas, liquid fuel from gas and stored electricity. We should consider future fuels such as hydrogen. By playing a more active role in emerging energy sectors, we can boost our export performance and take advantage of opportunities in world markets. Australia must invest in the preservation of our environment by diversifying our fuel base beyond petrol to biofuels, gas and hydrogen. We must prepare Australia now to face the energy challenges of the next 100 years. One of these challenges is to ensure that we do much more in renewable energy resources. For this reason, Labor supports the increase of the mandatory renewable energy target.

Let us consider what is happening in other countries in their attempts to diversify the fuel base. In the USA, there is a five-year plan to develop hydrogen and fuel cell technology. In the European Union, there is significant financial commitment to fuel cell technology. Iceland is committed to becoming the world’s first hydrogen economy. In Qatar, the focus is developing on gas to liquids. In Brazil, all petrol sold contains at least 25 per cent ethanol. Sweden has recently declared it intends to be oil free by 2020. Other countries have a vision of the future which involves planning now. There will be successes and there will be failures, but if we do not start to consider alternative fuel sources the future is bleak. This government has consistently reduced investment in research and development, not increased spending in an area which is so vital to our future. For example, while Australia’s crude oil reserves are equal to less than 10 years consumption, our natural gas reserves are many times higher. No-one can predict what the composition of Australia’s transport fuels will be in 2020, but this is an indication of the difference which could be made if we made better use of our natural oil reserves. If all the natural gas reserves we currently know about were converted to transport fuel, it would be enough to power every car, bus and truck in Australia for the next 50 years.

It is not good enough for the Prime Minister to merely hold office and just seek to go on as long as he can, maybe to break Sir Robert Menzies’ record as Prime Minister. He will be judged at the end of his term and by future generations on the sort of policy initiatives that he and his government introduce. In this area they are sadly lacking. There is no excuse when you have been in government for 10 years because you have had plenty of time to iron out the wrinkles and to produce substantive policy. Instead, we have seen short-term reactive policy on a whole range of fronts. In this area we are out of old fuels but potentially have access to a plentiful supply of new fuels—and that is before we consider developing other fuel alternatives.

Labor has proposed a comprehensive Australian fuel industry plan—a plan which would foster the development of a more diversified fuel base. Labor believes in developing a diversified Australian fuel industry. Labor is committed to putting in place effective incentives for the development of natural gas and for a healthy resources sector in the long term. That is why Labor will re-examine the depreciation regime for gas production infrastructure, allow the selective use of flow-through share schemes for smaller operators and implement regional resource infrastructure funds to help meet the cost of providing supporting infrastructure for onshore gas and minerals processing projects helping to grow the industry. Labor will also foster demand for new Australian fuels and technologies by making alternative fuel vehicles tariff free, cutting up to $2,000 off the price of current hybrid cars; working with state and local governments to give city traffic and parking advantages for these vehicles; and examining the granting of tax rebates for converting petrol cars to LPG.

Australia also needs to lead the global race for innovation in the development of new fuels and fuel technologies. To achieve this Labor would 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-liquids 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. Labor would establish a new stream of contestable grants, supporting proposals for research into alternative fuel and its associated technologies. These grants would go to projects accessing existing private and public research money, leveraging in extra funds as well as demanding new priorities from Australia’s research community. Labor proposes to ease regulation of biodiesel production on farms and encourage a sustainable ethanol industry.

Labor has a vision to protect its economy so that it does not fall under the weight of a global oil crisis. We must develop a diversified Australian fuel industry. We must move forward in developing alternative fuel policy. For the life of me, I cannot see why some of these policies cannot have bipartisan support, because it should not be about political patronage from one party or the other. In this area what we need is a long-term sustainable policy—one that is not the subject of the whim of an election campaign or a short-term election strategy. This is the test of the maturity of political parties.

The Labor Party does not subscribe to the view that we should just put our heads in the sand and it will all just develop. I do not see the role of government to be like a moo-cow watching the passing traffic. I am a great believer in governments directing traffic, playing a role and creating incentives for the business sector to build the economy. This is a classic area where I think this government has been negligent and has sat on its hands. It needs to do more.

I support the amendment moved by the member for Hunter and draw particular attention to paragraph (3) which:

... 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.

There is much more to do to reduce this country’s dependence on oil and Labor has proposed a viable plan to do just that. I also draw the attention of the House to paragraph (6) of the amendment, which:

... condemns the government for failing to strengthen the Trade Practices Act to protect competition in the petroleum industry.

I firmly believe that history has shown us that, without strengthening the Trade Practices Act, we are not going to get decent competition in the petroleum industry. People behave like predators—like sharks—and unless we strengthen the Trade Practices Act as it applies to this industry this behaviour is going to continue and the consumer is going to suffer. I think you can push your ideology too far. The free marketeers, who believe you should just sit back and behave like the moo-cow watching the passing traffic, have got it terribly wrong. They, of course, propose the alternative argument that interventionism is wrong. I do not believe a level of intervention is wrong at all, because we do not live in a perfect world. In my view, the role of government is to intervene in the marketplace to create that equity and that fairness to help stimulate that competition. It cannot be left to the players alone. I commend the amendment of the member for Hunter to the House. I say that history will judge this government poorly on what it has done in this area in the last 10 years. It has basically been asleep at the wheel.

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