Kim Wilkie (Swan, Australian Labor Party) Share this | Hansard source

I welcome the opportunity to discuss the Fuel Tax Bill 2006, the Fuel Tax (Consequential and Transitional Provisions) Bill 2006 and the amendment moved by the member for Hunter. These are important bills which significantly impact on a range of businesses and enterprises across the country and also within my electorate. This side of the House supports the general thrust of the bills, although with particular reservations which I will raise later.

As others have mentioned, the bills are reasonably complex. They seek to replace an integrated system of fuel tax concessions with a single system providing credits claimable via business activity statements. These tax credits will replace the grants now provided under the Energy Grants (Credits) Scheme. The bills also introduce some important measures in relation to emission performance and business participation in greenhouse gas abatement programs.

It must be said that we should have been having this debate some time ago. Labor was prepared to debate the contents of the bills well before this week, but fundamental differences within the coalition saw the government back down on implementation dates. This backflip would have been entirely unnecessary if the process had been handled more competently from the start. As I say, the debate of the bills is long overdue and systemic of a typically directionless government unable to properly control its legislative agenda and with ministers who, quite frankly, are not up to the task. In truth, the government has botched the entire agenda relating to fuel tax specifically and to the fuel industry and fuel regulation generally.

While I speak in this place this evening, a family from my electorate is pulling into the BP petrol station in Carlisle and paying $1.33 a litre for unleaded petrol. It is the same price at Coles Express Karawara and at the Caltex in Bentley. According to FuelWatch, the Western Australian government’s petrol price monitoring agency, the average price of unleaded petrol in the Perth metropolitan area in mid-June 2005 was $1.04 a litre. We fast-forward a year and today, 13 June, the metropolitan average for unleaded petrol is $1.36 a litre. As we heard earlier, it is understood that over the course of the long weekend people were paying $1.49 a litre and that after the long weekend that dropped to around $1.42, which is totally unacceptable. The increase in Western Australia over the last year has been roughly 32c a litre or over 30 per cent.

There is no doubt that families are being hurt by higher fuel prices. However, when the government is asked about fuel prices, it throws its hands up in the air and says there is nothing it can do about them. Most telling was the comment by the Minister for Industry, Tourism and Resources, the member for Groom, when asked about fuel security. The minister said, ‘Yes, we do need to find more oil—yes, we do—but short of finding more oil I don’t know what the solution is.’ To say ‘I don’t know what the solution is’ is a cop-out. Australian fuel prices are determined by oil prices overseas, which in turn are influenced by many international factors. I do not believe there is any support for a return to the bad old days of price regulation which distorted market decisions and ultimately did not provide lasting benefits to Australians. But there have been opportunities for the government to put Australia in better stead by minimising our vulnerability and exposure to the vagaries of international oil prices. Unfortunately for all of us, the government has sat on its hands. According to the Reserve Bank of Australia, each 10c increase in retail petrol prices reduces household purchasing power by $300 per annum. Applying the Reserve Bank’s formula to petrol price charges in Perth over the last year, we find that petrol prices, which have increased by 33c in that period, have reduced household disposable income by almost $1,000.

In net terms, Australia relies on imports for 17 per cent of our total petrol consumption but, according to the government’s Australian Bureau of Agricultural and Resource Economics, by 2020 we will be importing 46 per cent of our petrol needs. ABARE’s forecast is optimistic compared to others. For example, the Australian Petroleum Production and Exploration Association, APPEA, predicts that Australia’s oil dependency will rise to 78 per cent in the next 10 years—that is, a 78 per cent dependency on imported fuels. What can we do about this? How can we make our country less vulnerable to international oil price hikes? There are a number of things that we can do, but the key focus must be on research and development into new fuel and vehicle technologies. This is a national policy ignored by this government. The Leader of the Opposition detailed Labor’s plans for addressing the emerging fuel crisis in his blueprint that was announced last October. It is an excellent document that provides a stark difference between the opposition and the do-nothing-about-petrol-prices government.

Many on both sides of the House believe that there is insufficient competition amongst the oil companies in Australia and that anticompetitive behaviour is causing petrol prices to be higher than they need to be. We all notice the price hikes that occur in the lead-up to holiday periods and long weekends—and a number of speakers have talked about the fact that companies are often putting up their prices in the lead-up to a weekend and over that weekend and reducing the prices after the weekend when demand tends to slacken, which is absolutely absurd and really a rip-off of consumers. On the face of it, such pricing behaviour obviously appears to be opportunistic. Given these concerns, the response seems obvious: the government should immediately direct the Australian Competition and Consumer Commission to investigate these claims fully.

The free market ideologues who believe that the oil industry is ultracompetitive, and therefore there is no problem, oppose this action, but the truth is that if the directions given to the ACCC are comprehensive and if there is no problem with anticompetitive behaviour then surely that is the answer that the ACCC will provide. In other words, there is nothing to be scared of in asking the ACCC to inquire into the price hikes we have seen over the last year and the current pricing practices of oil companies. We often talk about competitiveness in the oil industry, but in reality the competitiveness arises at the bowsers of the different fuel stations that compete by slashing their margins to get people to come to their service stations. In fact, the profits of the oil companies have never been greater than they are now; therefore, we need to look at how we can ensure that consumers are actually getting some benefit. The answer is to ensure that there is competition, and this is where the ACCC needs to step in.

If you look at the ACCC’s website, you see there is a lot of useful information about petrol prices and petrol price cycles. But the last time the ACCC held an inquiry into petrol prices was in 2002 with the inquiry into terminal gate pricing arrangements in Australia and other fuel pricing arrangements in Western Australia. I understand that the review in Western Australia was looking at the price of LPG in relation to the cost of petroleum. Anyone who uses LPG in their vehicle would know that they are being ripped off, but unfortunately we just cannot prove it. We know that every time the price of petrol goes up the price of LPG goes up and usually the match is around half the price of petrol. We know they are up to something, but we just cannot prove it, so we really need to get the ACCC to continue to look at what is going on with those sorts of increases.

Prior to that report in 2002, there were two reports, in 2000 and 2001. Given the significant increase in the bowser price over the last year, it is time for the ACCC to undertake another full inquiry into the pricing behaviour of the oil and petroleum industries. I cannot understand the Treasurer’s continued resistance to doing so. Perhaps he does not talk to ordinary Australian families as I do and he does not understand the fact that families are suffering. That may also explain his surprise and disappointment at not getting a fillip in the polls from his recent budget. If you talk to the families in my electorate, they will tell you that the recent interest rate hike and rising petrol prices negate in many cases any relief from tax cuts and family payment rises. No wonder they are hurting.

It is worth noting that amongst the measures in this legislation before the House is the abolition of the Fuel Sales Grants Scheme. This scheme costs $256 million per year and provides a grant for sales of gasoline or diesel of up to 3c per litre in non-metropolitan regions. The scheme was introduced as part of the GST package to provide some assistance to non-metropolitan Australians. After the scheme had been operating for a couple of years, The Nationals decided that they were not getting any credit in the bush for this initiative and so the then Deputy Prime Minister announced that the government would roll the scheme into funding for the bush through ‘land infrastructure programs’. It is not at all clear that this $256 million has been rolled into such projects. The government should make it clear which new expenditure on land infrastructure will be funded from the abolition of this scheme; otherwise, the switch from this scheme will be seen as yet another swiftie pulled by the government.

Unfortunately, the Treasurer’s recent budget was also a document of surrender, bereft of fresh ideas and long-term vision. The budget failed to grasp the opportunity to increase the use of Australian transport fuels and reduce our reliance on foreign oil. Unlike the government, the Labor Party believes national leadership is needed to develop an agenda for the use of those fuels, which will become cheaper in the future. This is necessary and long overdue.

At community forums and morning teas throughout my electorate, the cry for a national policy to address rising petrol prices and calls for the development of a national fuel industry are clear. My message to the constituents in Swan is this: Labor will deliver this national policy and we will leave no stone unturned in assessing the viability of alternative fuels. We will develop existing alternatives such as 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. I am very pleased to announce that a lot of the work on technology in Western Australia, or even across the nation in hydrogen technology, is done in my electorate at the Bentley Technology Park by the CSIRO—and they are doing a fabulous job.

Unfortunately, the fuel tax shambles has continued today with the government circulating major amendments less than two hours before debate on these bills resumed. This government deserves condemnation for its failure to adequately consult on the most appropriate model for the payment of fuel tax. It is certainly culpable for the confusion running rampant throughout the industry. Last month we witnessed the extraordinary situation of the minister trying to stamp out a Senate inquiry into these very changes.

The member for Hunter has previously made mention of representations made to me by a local business owner involved in the solvent industry. The business proprietor provided me with a letter sent to the Minister for Revenue and Assistant Treasurer last week. I understand that the member for Hunter tabled that letter earlier. I acknowledge that the minister has only recently received the letter but I would like to raise my constituent’s concerns with the proposed legislation. Let me read the letter in part:

I am very concerned that we were not contacted much earlier about the proposed changes so we could have had an input.

We are one of the biggest solvent re-packers in Australia, we fill out Nature D40 forms now for the ATO, we have a current licence for a bonded site, so it is not like you did not know were to find us.

I was aware that changes to the fuel tax system were coming earlier this year, but that was for fuel, nothing was ever mentioned about solvents, we are not, I repeat not in the fuel industry.

I had to contact the ATO on the 14th of May 2006 and ask what is going on after being asked if I knew about the new tax on Mineral Turpentine from a customer of ours.

What a disgrace, that this businessman has to resort to asking such questions about this confusion. Basically, this constituent will now need to find the money to pay the 38c per litre excise to the solvent companies. He purchases around 490,000 litres per month. Multiply this by 38c a litre. That is an extra $186,200 just for the first month, plus GST. He understands that he will be able to claim some back via BAS statements, but only some of it. The rest he will have to pass on to his customers, but he is required to give notice of price ranges by the contracts he has with these suppliers, in most cases of between 60 and 90 days. So, even though he is passing on these price rises, he is out of pocket until this time frame is met. Unfortunately, my constituent believes that the financial pressures involved may cause him to go bankrupt. I sincerely hope that this is not the case. I call on the government to actively work with him and with other affected Australian businesses to make sure that this does not occur. My constituent concludes his letter saying:

I fully understand what you are trying to achieve but I do not believe that this will make things easier for our company as your literature suggests; it will just create a huge burden for our company, a nightmare in fact. Each time you have changed the legislation, you have done so to solve the problem or to make it more user friendly, but I cannot see how this is any clearer than what we currently have in place. This new system that you are looking at implementing actually hinders our company from doing business. The solvents industry and fuel industry are too different beasts that should not be put together.

Hear, hear! I believe that my constituent has highlighted the impact of the government’s clumsy and inept attempts to address the fundamental problems in its fuel policy in these bills. I call on the government to apply leadership and direction to this important issue.

It was not that long ago that the Prime Minister was alarmed about being called ‘mean and tricky’ by his own party president over the way in which his government dealt with the fuel tax issue in light of the introduction of the GST. Let us repeat what the party president said: the Prime Minister was mean and tricky. Once again, the Liberal Party president has been proved right on the way in which this government approaches fuel tax policy. No wonder he just received a gong in the Queen’s Birthday Honours. He saved the government then by telling the truth. But, on this occasion, the government have failed to heed the lesson—and it is high time they did.

Debate (on motion by Mr Dutton) adjourned.

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