Chris Hayes (Werriwa, Australian Labor Party) Share this | Hansard source

The Petroleum Retail Legislation Repeal Bill 2006 shows that this government can actually achieve something when it puts its mind to it. With the bill before us today, the government has decided it is time to take some corrective action in the petrol retail market. It has decided that things cannot remain as they are. Sadly, I am not talking about the government taking action on petrol prices, but I will return to that a little later.

The action is supported by the Labor Party. We support the repeal of the Petroleum Retail Marketing Franchise Act 1980 and the Petroleum Retail Marketing Sites Act 1980. We do so in principle—Labor’s second reading amendment is quite a welcome contribution to this debate because it does draw attention to the tardiness and the dragging of the feet exercise that has been pursued by this government in trying to address petrol retail reform.

Despite the fact that the government has not rushed to deal with the issues facing the petrol retail industry, I do welcome the structures that the passage of this bill will allow to be put in place. It is important that, as we continue to see the march of the large supermarket chains as they purchase more and more businesses in more and more sectors of the retail industry, there should be some exercise undertaken by government to temper that approach. Those who are trying hard to compete against these massive organisations deserve a break. I welcome the fact that the Minister for Small Business and Tourism is at the table, because I am speaking for her constituency in this regard. Like her—at least, I assume like her—I have a lot of small business people talking to me in the electorate, expressing concerns about situations where they believe they need relief against some of the marauding and loss-leading practices of large organisations that seek to manipulate markets that they currently operate in.

Under the current petrol retailing arrangements, there are at least three classes of operators: the commissioned agents, the independents and the franchises. Discrimination in one form or another obviously exists between these classes. It is made more difficult because of the imposition of certain legislative requirements. One in particular is that at the moment we have a class of emerging retailers which are effectively regulation free. The acts that are being repealed as a result of the passage of this bill cover only part of the petrol retailing industry, with more than 50 per cent of the industry by volume not covered at all. Under the existing arrangements, the new force in petrol retailing—the large supermarket chains of Woolworths and Coles—are not covered at all.

The proposed Oilcode will provide protections and regulation for the petrol retail sector and will cover entities that are regulation free at present. This has got to be an important improvement for all those small business people operating as petrol retailers.

A petrol retailer in my electorate spoke to me only recently to ensure that I understood how this piece of legislation would affect him and his business. One of the things he wanted to emphasise was that things are very tough. As a franchise operator he does not get to set the price that he sells petrol for and the margins are, as he put it to me, extremely thin. Despite the fact that petrol is hovering around the $1.50 mark, his margin remains fixed, and it remains at cents per litre.

He also spoke to me about the fear that he has about the unfair competition that takes place in the industry, and he hopes that the action of establishing the Oilcode will go some way to levelling the playing field in the petrol retailing industry. He, like others, finds it difficult to compete with the entrance of the new retailers owned by the large supermarket chains, with their ability to apply discount schemes. Another thing to bear in mind, as I said, is that those large organisations, those large supermarkets, largely operate, in terms of petrol retailing, in an unregulated market at present. For them to be able to come out and offer, for instance, up to 4c a litre off the price of petrol may not seem much, but, as this operator put it to me, when you consider the difference that makes for a family, that is something that must be taken into account. That is the thing that can actually decide whether he as a franchisee can stay in business or not.

There is no doubt that, given the rapid changes in the petrol retailing industry over the last few years, the time has come to address the issue facing the industry and address the disparities and the discrimination between different classes of owners and operators within this industry. We know that the petrol retail industry is currently experiencing some significant restructures, with the number of service stations dropping from some 20,000 to around 7,000 over the last few years. This process is set to continue.

Debate interrupted.

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