Bernie Ripoll (Oxley, Australian Labor Party, Shadow Parliamentary Secretary for Industry, Infrastructure and Industrial Relations) Share this | Hansard source

It is always a pleasure to speak on bills in this place. Although I think they are all important, some are more important than others. The Petroleum Retail Legislation Repeal Bill 2006 is particularly important because it goes to the heart of many of the problems that are facing ordinary Australians today and to the heart of the financial problems that they are facing in meeting their day-to-day living expenses. Before I begin speaking on the bill, I note that the Prime Minister made some sweeping statements and policy announcements today—all of which are pretty much an adoption of Labor’s policies, although not all of them, which we have had on the table for a number of years and which we have been working very studiously on. It is always good to see the government adopt some of the opposition’s policies, even if only a little bit and very, very late.

The point I wanted to make in particular is that so excited was the government’s backbench, the Liberal and National party members, that none of them are going to speak on it. None of them are prepared to front up. None of them are in the House at the moment to speak on this bill and I believe none have put their name down to speak on this bill. So excited, so enthused, so well connected and in touch with the community, they just do not bother to speak. Maybe they have nothing to say on fuel retailing. Maybe they do not understand just how much pressure fuel prices put on ordinary families. I do not want to say too many words about it, but maybe they are like the member for Wentworth, who unfortunately made a gaffe by not understanding the real pressures that ordinary people face, whether it be their mortgages, their health-care costs, the education costs for their kids or simply the price of petrol.

It is a bit disappointing we are not going to see anyone from the government stand up and defend their position or explain why it has taken them 10 long, long years to come into this place and do something. You would not have to be too cynical to make the judgement that the only reason the Prime Minister came to the dispatch box today to announce a very welcome but very belated move to do something about petrol prices, fuel and the fuel industry in this country is that he is feeling the blowtorch of political heat, the community heat that is out there. People are angry; people are saying, ‘Do something about it.’ The government have refused to do anything for so long, they really must not have thought it was an issue at all, but they finally came into this place and did something.

Before coming down to speak on this bill, I was looking through my many hundreds of emails, as I am assuming everybody else does from time to time. I got a very interesting email from a member of the public in Tasmania. I will paraphrase a few of the comments he made as I think they are particularly relevant today. He said that back in 1996, during the TV leaders debate—the famous debate where we had John Howard and Paul Keating debating issues of the state of the nation—John Howard made some interesting remarks at that time. In his concluding remarks, he said that the Keating government had been in office for 13 years, that it was arrogant and remote and that there was a widening gap between rich and poor. He said that we had the worst current account deficit in the world—and I will forgive you if you start to laugh as I go through these, Mr Deputy Speaker McMullan—and that there was a growing social division. He said that you could not separate leadership from what happens and that on that basis Keating had failed.

Isn’t it funny that the words he said all those years ago are coming back to bite? Those famous words John Howard said back then, and which I am sure helped him to win the election, are now coming back to haunt him in a really horrible way. That is not only the situation that people face today, but it is even worse. After only 10 years, this government is more arrogant; it is more remote; it is more out of touch. It does not understand about interest rates. It does not understand the kitchen table issues. It does not understand the pressure of fuel prices. It does not understand how bad the current account deficit is and just how big that gap is between the haves and the have-nots. The government talks about a low number for interest rates but, when you compare it to the rest of the world, it is quite high. It talks about a low number for interest rates but, when you compare it to the actual amount that people pay in interest payments, it is higher than it was at its peak in 1989 at 17 per cent.

How does that add up? It adds up because this government has not been doing its job. It has not been doing its job on interest rates, and it has not been doing its job on petrol prices. It is oh too easy to blame the states; it is oh too easy to blame what is happening globally; it is oh too easy to blame everybody else and do nothing. This is a do-nothing government and it has consistently refused to do anything at all about high petrol prices or the pain that ordinary Australians are feeling. The government thinks it can get away with it by saying to people, ‘You’re richer.’ But, if people are asset rich, why are they so financially poor? Why are they struggling today? Why is it that, in every newspaper I pick up, there are reports of credit card debt blowing out? It is now $36 billion. That is private debt. It is not debt from people buying new cars or new furniture—it used to be, once upon a time; you could borrow the money, service the debt, pay it off over a period of time. It is debt from people being forced into borrowing to live.

Because of high petrol prices, because of this government’s inaction on fuel retailing and its refusal to reform the fuel industry, people are actually borrowing to live. They are borrowing to buy food; they are borrowing to pay the electricity bills; they are borrowing to pay for their kids’ education; they are borrowing to pay for their healthcare costs. That is the danger we face today. It is a very real danger. Today on average, in real terms, individual Australians—there are 13 million cards in Australia, by the way—are $2,000 more in debt than they were a decade ago.

That message just does not seem to be getting through to the government. The government just keeps waxing lyrical about how asset-rich people are even if they are struggling to buy bananas. They are struggling to buy bananas because they cannot afford them; they are struggling to buy fresh fruit and vegetables because they cannot afford them. A whole range of issues tie into the Petroleum Retail Legislation Repeal Bill 2006. Labor has been consistently and insistently arguing for these changes for quite some time. This is important change. What we are seeing with this bill is the government finally having some spark of awakening. After years of the opposition beating the drum and making all the necessary noises about these very vital issues, the government has finally sat up and listened.

I give my support to the second reading amendment proposed by the member for Batman, Martin Ferguson, and I want to discuss some important parts of the bill, particularly in reference to the explanatory memorandum. This bill seeks to address a number of regulatory failures, particularly some inequitable application of the current petroleum legislation. The bill repeals both the Petroleum Retail Marketing Sites Act 1980 and the Petroleum Retail Marketing Franchise Act 1980. The repeal of this legislation is necessary because the current system has failed—a point which Labor has made very well. Under the current legislation, additional costs are imposed on the oil majors which prevent them from achieving increased efficiency. That is not something we would want to prevent. I think the oil majors should be increasing their efficiency; they should also be responding effectively to changing market forces and providing consumers with fair, equitable and competitive prices. I am concerned that the oil companies are not doing everything they can to reduce the cost of fuel at the bowser.

The reform package, which includes the repeal of both these acts, will bring the introduction of a new industry code which will be called the Trade Practices (Industry Codes—Oilcode) Regulations 2006. That will be mandated under section 51A of the Trade Practices Act 1974. Most importantly, this will establish standard contractual terms and conditions for wholesale supplier and fuel retailer reselling agreements for both franchise and commission agency arrangements. These standards will build upon and strengthen relevant provisions in both the franchise act and the more general Trade Practices (Industry Codes—Franchising) Regulations 1998. This will provide a greater level of certainty and protection for all parties to fuel reselling agreements.

I want to make a couple of points about that because I think it is important that we understand and acknowledge that, for consumers to have confidence at the bowser and believe they are getting the best possible value and not being gouged on prices, we need to have fair, open, competitive, transparent competition in the industry. The independent fuel retailers and the small players must have the same access and be protected from predatory pricing practices and the practices of major oil companies that would drive them out of business through economy of scale or sheer market size and presence in the industry. I think that is important. We have already seen too great a loss of the independent fuel retailers and the small franchisees and service stations—the mum and dad service stations that have literally disappeared from sight. We now only see the really big players such as BP, Caltex, Shell and so forth in the market. In fact, in the last decade or so we have lost something like 10,000 to 20,000 small and independent retail fuel outlets, which is a real travesty.

Through the introduction of this nationally consistent approach to terminal gate pricing, known as TGP, these arrangements will improve transparency in wholesale pricing and will allow access for all customers, including small businesses, to petroleum products—something I think is very important—whilst not negating the ability of the entities to negotiate individual supply agreements nor preventing them offering discounts or other schemes. The application of this new legislation should provide more competition in the market and, hopefully, a better outcome for consumers.

Also—and I think this is very important for the industry—it will establish an independent dispute resolution scheme to provide the industry with a cost-effective alternative to taking action in the courts. If you think about it for a minute, that is a very important move because the small retailers literally cannot afford the time or the expense to go to the courts to take on the major companies. The majors have an unlimited source of revenue. In the past they have litigated or remained in the courts in dispute for years on end, driving small independent retailers out of business, and they would be prepared to do so in future. There needs to be a better system and it is good to see that these changes will bring that about.

These regulations will facilitate a more effective regulatory environment for the industry. They will also mean that consumers get some better protection. As we have heard from other speakers on the Labor side, who seem to be the only people prepared to speak on this very important issue, there needs to be a balance. We must protect individual consumers and make sure that they get the best possible value through open competition, create a transparent process where wholesale and retail prices are reflected in what consumers actually pay, and ensure that independent fuel retailers are not driven out of business by large companies.

This is a very important change. Labor has been consistently saying that the government ought to be doing a number of things to make the fuels industry more competitive. We need long-term energy security in this country beyond the small amount of resources that we have and our reliance on other countries for our energy needs. For a number of years every other country in the world—I refer to China in particular but also to India, Russia, the United States of America, Brazil and a whole host of countries—has been strategically working on energy security and fuel independence. They have tried their best to develop policies and budgets which reflect a growing independence.

That has not been the case in Australia, and I think that is a great shame. As yet, we have not seen from government a real move in that direction. There were some small movements in that direction today with the government announcement’s of a liquid to gas policy, but as yet we have to see how that would work. We have been calling on the government to require the Department of Industry, Tourism and Resources to report to the parliament on an annual basis, commencing next year, on measures taken to progress, in particular, the increased penetration of ethanol and biodiesel—two very important fuels—in our energy market and the increased market penetration of LPG and CNG, including the number and location of service stations and the names of companies offering these products on their retail sites. We are also calling on the government to secure new investment in biofuel, LPG and CNG production and supply infrastructure in Australia—and there is that ‘infrastructure’ word again, something that this government continually refuses to acknowledge.

We also need to see the government secure investment in the alternative transport fuels industries, including gas, coal and liquids. We are also calling on the government to review the proposal to introduce excise on ethanol and biodiesel in 2009 and LPG and CNG in 2011 and to consider whether or not there is a case for delaying the introduction of the excise, depending on the progress made, in particular, in increasing market penetration of those mentioned fuels. We also need to see the government secure new investment in biofuel, LPG and CNG production and supply infrastructure in Australia and work towards achieving the 350 million litre biofuel target by 2010.

We are also critical of the government—and you cannot walk away from this—for its tardiness in moving on petrol retail reform. What has to happen in this country before the government moves? You have to drag it kicking and screaming to the table. It takes record fuel prices—incredibly high fuel prices—and people suffering before the government moves even an inch. We are also critical of the government for bypassing due parliamentary process in introducing a regulation to undeclare companies under the sites act and for failing to introduce amendments to the TPA to implement the 2003 Dawson and 2004 Senate recommendations for reform. This government has steadfastly sat on its hands while Australians have continued to pay more and more for their fuel. This is something that could have been done years ago. It should have been acted upon but was not. We are also critical of the government for failing to act to reduce Australia’s dependence on foreign oil and improve its transport fuel security—something that we keep raising with this government. Hopefully, if today is any indication, it will start to take up more of Labor’s policies in these areas.

Labor is also calling on the government to immediately conduct a feasibility study into gas to liquid fuels plants in Australia. That would include the consideration of petroleum resources rent tax incentives for developers of gas fields, which provide resources for gas to liquid fuels projects. Labor is also calling on the government to examine a new infrastructure investment allowance for investment in Australian gas to liquids infrastructure and to develop targeted funding schemes for research and development. Labor is also calling on the government to immediately embrace Labor’s fuels blueprint policy, and not just some of it but all of it—all of it because it is good, sensible and will work. As I said, the government has at least come part way in that direction, which is good.

We need to re-examine the depreciation regime for gas production infrastructure and allow the selective use of flow-through share schemes for small operators. The amendments seek to give effect to Labor’s plan to, in particular, find more oil and use more gas in Australia. We will do that by re-examining the depreciation regime, allow selective use of flow-through share schemes, as I have said, and conduct some feasibility studies in converting gas into clean diesel.

In the few minutes I have remaining, I want to make a couple more comments on promoting the use of alternative fuel vehicles, which is an important thing the government should be doing. It should make using alternative fuel vehicles tariff free, cutting up to $2,000 off the price of current hybrid cars. If you are going to encourage consumers to buy these vehicles, give them an incentive more than just the fuzzy, warm feeling they get inside for having done something good for the environment and mankind. We also need to look at granting tax rebates for converting petrol cars to LPG—again, one of our policies which the government today announced. I am always happy to see the government announce Labor policy. It is a great thing and we saw that today.

We need to protect and promote the growth of ethanol, biodiesel, LPG and CNG properly. We need to adopt the proper processes to do that. It needs to be transparent. We also need to strengthen the ACCC’s powers to investigate petrol prices. We need to remove the requirement that they cannot do so without the Treasurer’s consent. The Treasurer has been flapping his wings on a whole range of issues, but right now we need to see the government give them—

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