Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Assistant Treasurer and Revenue) Share this | Hansard source

out of respect for you, and return to the issue at hand. I said just before question time that there are some short-term things the government can do about petrol prices. They can move quickly to strengthen the power of the ACCC to ensure that things are being done properly and fairly in the market. They can restore the Trade Practices Act to its former glory, in particular section 46, so that the ACCC has some prospect of securing prosecutions for misuse of market power. They are very simple things that the government could do tomorrow. In fact, I gave the Treasurer another opportunity today in the parliament to sign that simple letter to send to the ACCC chairman that is required to give him the power to properly investigate petrol pricing and the market—both retail distribution and wholesale distribution at the terminal gate.

I said before question time that this is a very important bill. These are very important reforms to the regulatory regime which our petrol retail market operates under. They were originally put in place by the Fraser government out of concern about market concentration and vertical integration in particular. I spoke about the way in which they have been circumvented over the last half a dozen years or so and the government’s failure to show leadership and to secure some agreement between the various parties before now to get rid of this antiquated law. I just want to reinforce the point again that the opposition support of this repeal bill hinges on the promise we have had from the government that very soon—in other words, almost concurrently with the repeal by this bill—they will be introducing those amendments to the Trade Practices Act which we have been seeking for so long.

It is very important to note that we are repealing legislation today that effectively does nothing anyway because, audaciously, some weeks ago now, the minister decided to move a regulation which undeclares each of the major oil companies under the legislation. The legislation sets up the framework, and who is covered by the legislation is determined by regulation. The four major oil companies have been undeclared, so we have a Petroleum Retail Marketing Sites Act that covers no-one. So it would be nonsense for the opposition to be opposing the repeal of the legislation, but the legislation is still there and has leverage for us to ensure that those trade practices amendments come forward.

I look forward to the government producing those amendments in the next little while. We want to see 98 per cent of the Senate committee’s recommendations. We do not want half the story or some half-baked approach to restoring section 46 of the Trade Practices Act and therefore the ACCC’s ability to secure prosecutions for misuse of market power, collusion and all those other things under part IV generally.

Listening to the debate on this bill before I received my opportunity to speak, I heard a lot of talk—and it is welcome talk—about what the Prime Minister could be doing in the long term about petrol prices in this country. When the price of international oil is high, it should be a call to arms to the government to swing into action, to do something short term—and I have addressed those issues—but also something medium to long term. We accept—we are not fools—that high petrol prices at the moment are largely driven by high oil prices, but there are both short- and long-term things that the government can be doing to mitigate the impact on people, as I have said.

This should be a wake-up call to the government to finally get an energy policy together and to finally acknowledge that we have to wean ourselves off Middle Eastern oil. In fact, we have to wean ourselves off our traditional fuels. Oil is such a finite resource. We are running out of oil. On the basic laws of supply and demand, demand is going up and supply is going down, so naturally price is going up. When is the government going to realise that this is unsustainable and we are facing a fuel price crisis?

There are some solutions. People have been talking about ethanol. Let me say something about ethanol again. The Labor Party support ethanol as an important contributor to this goal—that is, to wean us off oil and to stretch our finite resources further. We started the ethanol industry in this country with capital assistance grants back in 1993. We have supported pushing out further the application of tax on ethanol. We are now out to 2012. We did not oppose the government’s total removal of import competition. We have supported all the later rounds of capital assistance grants for new plant. We have done all the ethanol industry has asked of us short of mandating.

None of us should be turning to mandating as a solution to ethanol’s challenges. We should not need to mandate. This is a good product. It is good for regional jobs. It is good for the environment. It is good for the agricultural sector. It helps the competitiveness of independent service stations, because they can blend the product—having no tax makes them more competitive. It does not need mandating. Where do we stop once we tell people they have to buy a product? Lemonade in beer next? Consumers do not expect to be told by legislatures what they should and should not buy, but if we work together and work sensibly we do not need to mandate ethanol.

We want it to play an important role in the mix. A good industry out there wants it to play an important role in the mix. The oil companies need a jab in the ribs. The government should be jabbing them harder, and we are happy to support them in providing those jabs. Ethanol is a very important mix and has our total and unqualified support. But we only make 37 million litres of it in this country at the moment. If we mandated it at 10 per cent, we would need two billion litres. What would we have to do? We would have to import it. If we could not import it, demand would outstrip supply. What would that do to the price of the ethanol? It would send it up. What would that do to the price of the petrol-ethanol blend? It would send it up. So this would be an anti-consumer measure.

We have to support ethanol, but we also have to support LPG, CNG, biodiesel and of course gas-to-liquids diesel. We have plentiful supplies of liquid petroleum gas. How amazing and hypocritical it was for the Prime Minister this week to roll out as a possible solution to growing LPG consumption the bringing forward of a rebate on installations which he planned to give anyway. This is the same Prime Minister who made LPG taxed for the first time, first with a GST. We should recall that the LPG industry took the full brunt of the GST. Petrol had its excise reduced by 7c to partly—and I underline partly—offset the impact of the GST. It did not. It was not enough to stop the GST causing petrol prices to rise, but petrol did have an excise reduction. LPG attracted no excise, so there was no excise to reduce, and it took the full 10 per cent brunt of John Howard’s GST. Now the Prime Minister plans to put an excise on LPG for the first time. This is a Prime Minister who has been working against LPG in the market rather than assisting a greater take-up of LPG, so it is entirely hypocritical of him to pose that as a weak solution to the significant issues we face. But LPG is a great opportunity for us. It is an indigenous fuel and we have plenty of it.

Our other big opportunity is natural gas—prior to getting to hydrogen as an ultimate solution. I should acknowledge hydrogen, because it will be our ultimate solution, but prior to that our next big resource is the enormous reserves of natural gas we have in this country—150 trillion cubic feet of it. The member for Batman acknowledged my statement that it is a funny Prime Minister who has no trouble getting natural gas to Shanghai when he cannot get it from the west coast of the country to the east coast. We should be getting those fuels to the east coast as liquid diesel fuels.

Our natural gas is easily convertible into liquid diesel which goes straight into diesel engines as they stand without any modification. Whatever the price of oil is—through $US25 a barrel—this is economically viable. Why aren’t we doing it? Because the government is not giving sufficient encouragement to the oil companies to get on with it. It has other plans for our gas—that is, shipping it off at bargain basement prices around the world without thinking about our future needs. What we need is an energy plan that takes into account our existing reserves, our future consumption needs and what we as a nation need in the future. (Time expired)

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