Bob Katter (Kennedy, Independent) Share this | Hansard source

The Independents—the three of us—went to Michael Delaney’s group, the Motor Trades Association of Australia, and we found out that they had formed a fair trade council. I think it is only proper to put before the House the solutions that have been proposed by this particular group. They are:

a. That a positive right to supply be included in legislation—that is, that supply cannot be refused unless on occupational health and safety grounds. Petrol being an essential energy good, a minimum quantity of a tanker load could be applied;

b. That the ACCC be required to receive a commercial-in-confidence base information from the four refiners of all wholesalers data on their actual wholesale price—so on a monthly basis the high and low price, and a medium price—thus enabling the ACCC to gain a greater knowledge of price margins in the market. This would also provide some transparency in the event that pricing about concerns were referred to the commission;

c. The introduction of terminal gate price so the only movement from posted terminal gate price was for volume discounts;

d. A renegotiation of the Oilcode;

e. The passage of the Dawson bill, in particular collective bargaining notification arrangements;

f. The passage of the majority report of the Senate Economics Committee inquiring into the TPA and small business. Also a right for victims of breaches of the TPA to take action for compensation for successful ACCC action.

It is quite a remarkable event today. It is truly remarkable. I once belonged, as did my colleague the member for New England, to a once great party that was responsible for aggressively introducing, and pushed for the introduction of, the sites act. We stood up to the big corporations. We had courage, we had gumption and we had tenacity. The history books glow with pride for what we achieved for this nation. The followers that followed after us introduced national competition policy. It was going to give us competition. The one thing that we absolutely all know competition policy never gave this nation is competition.

The most important product to us all, of course, is food. In 1990 Woolworths and Coles, according to the AC Nielsen annual report and the ABS report, owned 50.5 per cent of the retail food market. Now, according to AC Nielsen and the ABS, and Coles’ and Woolworths’ own figures, they hold 82 per cent of the market. So if there is one thing that national competition policy has not delivered it is competition.

I virtually live on aeroplanes. My official report to the parliamentary committee was 37½ hours. I nearly died of shock when I found out that I had spent that much time travelling. In the last three years I think I have travelled non-Qantas twice. All I do is say, ‘I want to leave at this time.’ Whatever plane is leaving at that time, I get on it, whether it is Alliance, Virgin or Qantas. You only have to go to an airport to see that 90 per cent of the traffic is carried by Qantas. So it did not deliver competition in transportation. In the media, I think almost all the radio stations in the northern half of Australia are now owned by one single broadcaster, and I understand that is pretty much the same for the rest of Australia. As far as newspapers and television go, I do not have to tell anyone in this place about the concentration of ownership, which is unprecedented in the Western world.

I and the honourable member for New England got a briefing, and we were appalled to find out that one of the reasons that we would not be able to sell ethanol in this country now or in the future is that 62 per cent of the petrol throughput is now controlled by Woolworths and Coles and their partners Caltex and Shell. At the present rate of progress, within three years they will be up to 75 per cent. The 25 per cent that is left—and if you go out and put $30 million into an ethanol plant you would want to be pretty confident you have some customers there—are the little tiny blokes. What are you going to do? Run around and draw up a contract with a thousand of these small retailers? It is not likely. Interestingly, the only single plant that was being built in Australia was being built by a person that already owned the retail outlets. I think it was Caltex that made them an offer for the plant. They would not sell the plant. But what they did then was buy out the retail outlets so that the oil company had control of the ethanol.

Why do the oil companies not go for ethanol? Clearly it is a lot cheaper now. Everybody knows that it is cheaper than oil, so why don’t they buy it? If they are out there screaming, ‘We have to pay this terrible, high, spot market price, which is now $70-odd a barrel; we have to charge you this,’ why don’t they buy ethanol? It is cheaper. I will tell you why they do not. Roll the clock back to when we had a price at the wellhead in Australia, when there was an agreed upon price which gave, I think, BHP a very generous return on their investment and their risks—and it was $3 a barrel. So the price of producing and making a profit then was $3 a barrel. The world spot price was $7 a barrel. I will bet London to a brick that those relativities are the same today as they were then. So, whilst it might be $70 a barrel out there, the Shells, Caltexes and Mobils own the oil wells, or they have contractual arrangements which amount to them owning the oil wells, and they made those contractual arrangements long before the price shot through the roof.

I doubt whether any of us in here are going to be able to settle the question of whether supply and demand is dictating the world price of oil or whether the price is being manipulated, but one thing we do know is that the spot price is a hell of a lot different to the cost of production which is being borne by these companies. And that is the reason why they are not buying ethanol—because the oil companies are buying oil at one hell of a lot cheaper price than we can produce ethanol for. But they will not sell it to us at that price.

The trouble in this place is that, when all the members of the frontbenches of both sides of the House were little boys, they never played Monopoly. I played Monopoly, and I remember well that if you got all the utilities then you could charge four times as much money than if you only owned one of the utilities. So I learned very quickly, at a very tender age, that what you did was try and buy up the opposition as fast as you could gobble them up, and then you made an awful lot of money.

I can remember well when we implemented the sites act. I was in parliament at the time. Because I was the chairman of the Queensland branch’s small business committee or whatever we called it then, we went around and interviewed people about it. We interviewed a service station owner, and he said: ‘Here’s my bill from the oil company. It is 52c a litre. But down the road the company is selling retail at 50c a litre. How can I compete against him? He is my supplier.’

That is what is called vertical integration. When that very great American—probably one of the few really outstanding American politicians—Theodore Roosevelt mobilised his antitrust legislation against John D Rockefeller to break up his huge cartel, the US Supreme Court interpreted the antitrust legislation as actually banning vertical integration in industry. They saw, and see, vertical integration in industry as a breach of the antitrust legislation in the United States. I believe the US Supreme Court most certainly has it right in justice if not in law.

There has to be a political point made here. In my state the party that I belonged to were champions of the owner-operator, and we actually banned the selling of groceries through service stations. We put up some spurious argument because we wanted to protect the little bloke against the giant oil companies. That was the reason we banned it—and because we also wanted to keep competition in the food purchasing marketplace. There was no after-hours shopping in Queensland for corporate supermarkets then. That was only for owner-operator supermarkets. I have to say, in all fairness, that the current government has preserved that to some degree. But the party that actually drove all of this legislation to help the owner-operator is now the party that are abolishing the sites act. It is really extraordinary that a party going in one direction could, within the short space of 15 years, be heading 180 degrees in the opposite direction.

I want to hone in on two other figures. I did not have time to check, but I think that it was in the 1980s—it might have been little earlier than that—that oil went over $50 a barrel. It was $40 or $50 a barrel for a protracted period of time, and at that time, when the tax was taken off, petrol cost 22c a litre. Oil has now gone to $70 a barrel—an increase of about 50 per cent. So the price of petrol should have increased 50 per cent to about 35c. But it has not—it has gone to 105c.

Why has there been this sudden huge increase in the price of oil? The cost of producing oil has not changed: you dig a hole the ground and the pressure brings it up or you pump it up. We are producing oil exactly the same way now as we were then, and we must have this question answered. If we cannot force the oil companies and if we are not prepared to implement price controls, then we must intervene in the marketplace to see that there is competition—and to do that we need mandating. I have been heavily involved in efforts to get ethanol plants off the ground, but we have to find someone to buy the product.

Quite frankly, the only big operators in Australia are Mr Honan at Manilda, who has his own plant so he is most certainly not going to buy off us—and I do not want a commercial-in-confidence situation here—and a big operator that has already entered into contracts, Sarina’s CSR. There are only three other big independents, and one of them is locked in contractually for a few years yet with one of the oil companies. One of them, as I have just remarked, has been bought out by, I think, Caltex, because they were involved in an ethanol plant and it was getting a bit scary for the oil companies.

Let me go through the figures again just quickly, because it is not very difficult; it is not rocket science. You can buy, and we can produce, sugar for $360 a tonne. There are 600 litres per tonne, so that is 60c a litre. If we take 50 per cent of our sugar production and turn it into ethanol, about one-third of our tonnage would come from molasses, which is only 22c, so we would have an average price of around 47c. It is about 9c for processing, so it would be 56c. There is storage and transport of 10c and 5c for retail, so that would be 71c a litre. We would have to add one-quarter, because ethanol has a lot of oxygen in it and your motor car does not go as far since you get a better burn and you get more power. It might be fairer to say that you would add 18c to that, so that would bring it to 89c a litre.

We absolutely know that we are talking about a comparable price in the range of under 90c a litre. Why is it not happening? It is not happening because the marketplace will simply not provide room for us to go into the marketplace. There has to be mandating. After seven years of this, surely this House realises that there is no ethanol without mandating. If you want verification of this, let me tell you that four years ago the demand for ethanol was around 70 million litres. The demand for ethanol is now 23 million litres, so the government has done a wonderful job! The proof of the pudding is in the eating. Four years ago in Australia we had 70 million litres of production; now we have 23 million litres of production or consumption—they are both the same thing.

I will make one other remark concerning petrol. We have spoken about LPG, and it would appear from the Prime Minister’s statement today that we can deliver LPG at 78c a litre. But as the member for Chifley, in a very excellent speech to the House this evening, very adequately asked, ‘Where are you going to fill up?’ We have enough big operators in livestock haulage and banana haulage and in the mines in North Queensland and in the sugar industry itself to produce biodiesel ourselves. But the trouble is that whilst I would be confident of us having biodiesel outlets in North Queensland, when the livestock haulier is carting cattle south, where would he fill up at a bowser? He would not know where he would be taking the cattle and he could not afford to take the risk of going to some area where there is no biodiesel.

So, as outlined by the member for Chifley, once again we have the problem of having to have outlets all over Australia. The only way that can be done is by mandating it. There is not a country on earth producing ethanol that is not mandating it first. I have held things up in the House on numerous occasions—and I will do it again this evening. This shows the price at the bowser in Brazil. ‘Preco por litro’ is Portuguese for ‘price per litre’. It is 1.359 real, which in Australia is 68c a litre. I do not have to do the figures, as I did earlier in my speech this evening; I can simply hold up a picture of a bowser in Brazil. We absolutely know that if this government moved on mandating they could deliver to the people of Australia petrol at the bowser at under 90c a litre, but we are buying it at $1.30 a litre.

I went up to see the rugby league finals on the weekend. The Cloncurry team of my own home town travelled a 1,000 kilometre round trip to Normanton to play in the semi finals. What does petrol mean to us at $1.30? Thanks to the incompetence of the state government in Queensland, for the last 12 months we have gone without any dentists in the midwest—we have had none. In my lifetime we have always had three. On average, the people from that area would have had to travel 800 kilometres every time they got a toothache! Whilst it must be nice and academic to sit here and argue these things, it sure would be nice if the government gave us mandating and delivered to us petrol at the price at which we should be getting it—that is, the ethanol price, which is under 90c a litre. If the government think all this running around and tiptoeing in the tulips has achieved anything, let me tell you what it has achieved: we have gone from 70 million litres down to about 20 million or 30 million litres over the last four or five years, so the policies have been an abject failure. We ought to expect that the policies that were implemented today will go in exactly the same direction. (Time expired)

Debate (on motion by Mr Hunt) adjourned.

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