Ian Causley (Page, Deputy-Speaker) Share this | Hansard source

I am delighted to participate in this matter of public importance today. I think that we would all like to see lower fuel prices in Australia, but I dare say our good friend the member for Rankin, in an article he wrote for the Age on 22 July, summed up the position, where he said, ‘There is no doubt that the price of fuel in Australia is directly related to the price of oil on the world market.’ I think that sums it up absolutely correctly.

To hang out a promise to someone in the electorate that by embracing ethanol—as much as it might be of benefit to the environment and certainly a benefit to fuel and the additives in fuel because of the high octane that it supplies—we are in some way going to reduce the price of fuel I think is a wrong premise, quite frankly. I cannot see how hanging out this offer that somehow ethanol will reduce the price of fuel in Australia would in any way deliver that particular objective. At present, if you look closely at some of the incentives that the government has put in place, the only reason that fuel with an ethanol additive is cheaper is that the excise has been taken off the ethanol in that particular fuel. We can go into that argument a little later.

Having said that people would like cheaper fuel in Australia, I think it is important to say that in fact Australia has the third cheapest fuel in the world. Interestingly, a graph was put out in 2006 of the OECD countries. If you look closely at it, you will see that the base price of fuel in all those countries is very close to being the same. But it is the taxes that are added to that base price that change the price of fuel. If you look closely at the OECD countries you will see that only the United States and Canada are below Australia and that is because of the added taxes. Mr Deputy Speaker, I seek leave to table that graph because I think it is instructive to people to see how the taxes do affect them.

Leave granted.

Also, I think we need to take into account that the member for New England suggested that somehow ethanol will be a greater advantage to the rural industries of Australia. I doubt that very much, quite frankly. One of the important things about ethanol is that, if it is going to be competitive, you have to have cheap feedstock to produce the ethanol. My immediate question would be: what is the price that will be paid to the farmers for the feedstock that will be used in the ethanol industry? That is the first thing that has to be established. Quite frankly, just to talk glibly about the fact that we can produce ethanol from grain—and we can—or we can produce ethanol from sugar—and we can—I would say that the main question from the farmers’ point of view is: what are you going to pay us? If you look at the sugar industry at present—

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