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

The member for New England had his say, but he does not like it when someone starts to put another point of view. If you look at the sugar industry at present, where the price of sugar on the market today has escalated—now at $443 a ton—I suggest to you that no sugar grower will sell sugar to an ethanol industry at that price. The first thing you have to establish is whether you are credible in putting forward an argument in this debate.

To say that the government has not in any way encouraged these industries is quite wrong. There is plenty of evidence to show that the government has encouraged these industries in recent years. Yes, you can talk about mandating if you want to. I do not know whether that is absolutely necessary. One of the greatest things is to try to get through to the public, after a debacle we had here in Australia a few years ago, that in fact ethanol is not dangerous to engines. That is one of the greatest problems we have. There is an underlying fear amongst the community—and if you have a look at the research that has been done on this, it is very clear—that somehow ethanol damages motors. Why? Because we had the member for Fraser, I believe, stand up in this parliament. He asked a series of questions. He clearly put into the minds of people that the problems that were occurring with certain additives in fuel emanating from, I think, Victoria related to ethanol. Ethanol was causing the damage to engines to the extent that in my area the fuel companies had signs up in bold letters, saying: ‘This fuel does not contain ethanol.’ That underlying fear is still there and it is one of the greatest things that we have to overcome to ensure that people do know that in fact a 10 per cent blend would not be detrimental to any of the engines in their motor cars in Australia.

Another argument that is put forward very regularly as to why we have to do something about fuel prices is that fuel companies are a cartel. I have heard this from my days in the state parliament and from my days here and I suppose we all suspect because they are big that they could be involved in a cartel-like arrangement. But if you have a close look at what has happened over the years, you will see that reports from the ACCC have found that the petrol retailing industry in Australia is competitive and that heavy-handed regulation could lead to higher petrol prices. An argument has been put forward that the reason why people can in fact buy fuel at a lower price mid-week is that consumption at that particular time is not great and that the service stations are trying to encourage people to buy. An argument has also been put forward—which I suppose could be tested—that if you did regulate in some way, consumers would not get the benefit of cheaper prices with shopper dockets. So we have to be very careful about some of this. You would have to have a lot more information to categorically say you could overcome this.

Let me go back to the biofuels debate. There is keen debate across the world. It is interesting that the member for New England went to the United States, because that is one area where you will not get a true market in any fuel—maybe you will get a true market in the petroleum industry, but certainly not in biofuels, because they are up to their ears in subsidisation in the United States. From my experience, I can tell you that Brazil is badgering the United States to take off some of the tariffs on ethanol that is imported into the US. Brazil can produce ethanol more cheaply than the United States, but the United States will not let them sell it in their market.

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