Peter Andren (Calare, Independent) Share this | Hansard source

I want to speak on a couple of matters pertaining to the Petroleum Retail Legislation Repeal Bill 2006 and to the Prime Minister’s announcement yesterday. Firstly on the matter of this bill, the long-heralded Oilcode is the issue of transparency. Prima facie, it seems to be the direction to which most people have been arguing for many years. But in looking back at the debate in 1998, when the repeal legislation was first introduced, I was concerned at that point, and I remain concerned, about the impact of the abolition of these pieces of legislation, irrespective of the introduction of the code, on the smaller service station operators, particularly in towns and villages outside the interests of the major operators, and particularly the supermarkets.

I took note of the member for Kennedy’s comments in this debate last night. Those wonderful words ‘competition’, ‘competition policy’, ‘transparency’ and so on have effectively brought about a concentration of market power. Supermarkets, perhaps here with the oil companies, are forcing out the smaller suppliers, the smaller garage, workshop and all of those job opportunities that the petroleum industry has traditionally offered in smaller country towns.

On the LPG conversions and the Prime Minister’s announcement yesterday, it remains to be seen whether these initiatives really will convert us to liquid petroleum gas. I note today concerns that the scheme will reward owners of large, gas-guzzling cars with a subsidy from taxpayers who do the right thing by buying small cars or, in the city, catching public transport. There has also been concern expressed to my office today from those who have already invested in the LPG conversions. It is a substantial expense, and they are wondering whether there is any retrospectivity in this process. I think not.

Buyers of new cars will receive a $1,000 grant while second-hand cars will be eligible for a $2,000 grant towards the cost of conversion to LPG, but the money has to be paid up-front. This is not possible for those people of limited income and means, who perhaps have the need to save whatever they can on their fuel bill. The member for Scullin talked last night of the metropolitan experience, where those from the outer suburbs of Melbourne, and no doubt in other major cities around Australia, are more often the ones living in the most affordable homes and the ones who need the biggest financial break they can obtain. They are the ones travelling the furthest, whereas those living in the inner cities with their big homes, and no doubt big cars, are able to take advantage of this without any financial pain.

It begs the question, among other things: where are the public transport initiatives for the cities? We cannot leave it all to the states. Sure, they should be spending far more, but we see now the states at least re-examining an old axiom of economics—that is, it is not a negative thing to borrow for infrastructure that will be paid off by future generations. But they should not be borrowing for tunnels and grand flyovers, inducing more and more cars onto the highways of our metropolises in particular.

And therein lies a very sound argument that the Prime Minister has well documented—that is, this easing of the cost of private transport in private cars should not be encouraged by reducing the excise on petrol. It should be used to encourage the introduction, through biofuels, ethanol and other means, of a cheaper additive to our petrol supplies that will give a win-win benefit to the environment and to those who purchase that product. But I do not see anything in yesterday’s package to suggest that, by not mandating the use of ethanol, we are going to go anywhere near satisfying an environmentally sound outcome.

The Prime Minister says the government may look at ways of mandating the availability of cheaper ethanol blended fuels—whatever that means. He does not say, ‘Because through some ideological position you do not mandate anything in this world.’ I think there is finally a recognition in this place of the situation with global warming. I had members around me in the last few years who severely questioned the veracity of the argument about global warming. I heard some members—I will not say exactly where they sit in this place, but they are still around—daring to say that the whole global warming plot was a figment of the scientific world’s imagination and that it was just one of those cyclical things that occur on this planet as time goes by. But they did not explain why it is that since the industrial revolution we have had a gradually increasing global warming that has accelerated to such a fantastic degree in recent years, and it is only going to get exponentially worse with the bringing on of the demand for motor vehicles in India and China, fuelled by their massive growth in GDP.

It is a huge crisis. This initiative by the government is a very hastily arranged package—as we saw today in question time, I would suggest—to try to head off flak about the increasing price of fuel. I do not think any government should offer any hope that there will be a reduction in fuel prices in the years ahead. The government should take the issue firmly on the chin. It should take the electorate into its confidence and say, ‘There will be some tough questions asked and there will be some tough policies here.’ Part of that toughness should be to mandate the inclusion of bio-friendly fuels, ethanol and others into our fuel chain, with the full price benefit passed on and not gouged back.

The member for New England detailed in his contribution to this debate how the oil majors get the headlines and say: ‘How good are we! We are offering this discount,’ yet they are quietly gouging it back at the retail outlet. More often than not, those independent operators have been prepared to carry the ethanol flag for so many years now, believing in it as a product in rural areas in particular that is part of an answer to our decline in rural economies. I hinted at this in a question today, where Cowra is looking down the tube at the closure of its abattoir and the loss of a couple of hundred jobs. This has been brought about by the extensive drought and the fact that stock numbers are down significantly. Maybe, just maybe, down the track there will be an abattoir industry of the proportions we have seen in the past but, unless there is a buyer for Cowra—and it is looking fairly bleak—those workers will be on the rack.

There are other industries in the town of Cowra. One is the Windsor Farm Food organisation, which is desperately hanging out for an answer from the Minister for Justice and Customs on an interim excise that has been applied to an imported Chinese mushroom product, which it claims is being dumped—and any fair judgement of it would suggest it is being dumped. It is being put on the shelves by whom? By the major supermarkets, as a generic brand and at far below the cost that Windsor Farm can turn out the product. The gouging of the market by the foreign supplier has led to the closure of the tin-plate manufacturing plant on the South Coast, which produced the cans for Windsor Farm to put its product in. Because Windsor Farm’s production has fallen through unfair competition from offshore—along with others in the market—we have lost another industry. This cannot go on forever.

There are two furniture manufacturers in Cowra, and the abattoir and Windsor Farm Foods, which are all in very tenuous circumstances. They would argue, quite fairly, that products are being dumped on the Australian market, and they are finding it very hard to get the government or trade ministers to argue at a world forum that they are faced with unfair competition. Surely the ethanol industry is but one that offers a strong alternative—one that we should encourage through a mandate. As the member for New England pointed out following his recent study trip, it is mandated in states throughout America. There is also the Brazilian example, where something like 30 per cent of ethanol goes into the fuel chain.

The fuel companies have strangled the ethanol process in this country because they control the outlets. Coming back to the bill, there is nothing to suggest that anything other than further control will occur. I am mindful of the arguments as to why this act may result in a more efficient industry, as many have said, but I am also mindful of the fact that the repeal of the franchise and sites acts is likely to result in some other concerning outcomes, such as franchisees being likely to lose from this restructuring. The number of small businesses will inevitably diminish.

I am constantly brought back to the words of the Motor Trades Association when they said to me and my Independent colleagues—and they told the Senate inquiry—that the outcome of these changes will result in the closure of more small, franchised and independent retail outlets in rural and regional areas. Motorists will have to drive long distances. There will be increased dominance by the retail petroleum market, increased dominance by the supermarket chains, a loss of competition in the retail and wholesale markets as independent importers struggle to find sufficient retail outlets. It will be detrimental to motorists in the long term as smaller competitors exit the market and so on. The consumer may finish up with a cheaper product, but it raises the question: are we heading towards one-stop shops, one-shop towns, newsagents and chemists as well?

I am mindful of the Blayney BP independent petrol station, where I often fill up my car. The owner points out that the retail price of their petrol cannot compete with that of stations further down the road in the big regional centres. It is not only the petrol that is an issue. Once petrol station owners decide that they cannot make enough from the petrol, they shut their doors, and that affects the garage, the mechanic and the apprentice—that whole unit which is so important to the social and economic fabric of many country towns.

Cheaper petrol, yes—but at what cost? There is a need to control market share of supermarkets not only in retailing, I would suggest, but in other areas too, including petroleum—as the member for Kennedy outlined in his contribution, when yet again he spoke of the US antitrust measures that have been in place for such a long time to control the influence and power of the major retailers in that country.

I could say a lot more about this, but I will just say this: the supermarket chains account for about half of Australia’s retail petrol sales, yet they do not fall under current legislation. It could be argued that it is important that we standardise the industry to that extent. It is no small irony that the two other majors that are not connected with the supermarkets are being squeezed by the very competition of the supermarkets. It is all right to say that we are going to even out the competition between the four majors, but we are lifting the whole competition debate to another plane, where we now talk about ‘the big four, plus the two’—the supermarkets—or ‘the big six’, if you like, in petroleum. It seems as though we are now forever to close the door on the smaller, independent operators, who I argue are very important to the economic fabric of smaller communities.

Finally, the question is no longer whether global warming will occur or whether its cause is largely due to the human activity of burning carbon in oil refining, power generation and car emissions. Even the world’s largest denier, the US government, now acknowledges it as fact and its causes—something the world’s scientific community has been shouting from the rooftops for decades. It seems that we now have consensus in this place that global warming is not a figment of Steven Spielberg’s imagination. However, the question now is: by how much is it warming, and what results will it bring?

I am not satisfied that the government’s hurried LPG fix or any of the other initiatives it outlined yesterday will go anywhere near curbing our petrol addiction. I am not convinced that they will go anywhere near providing a viable alternative energy process, whether it be for fuelling vehicles for transport or for power generation. While the extension of the solar subsidy to remote communities is welcome, it should be part of a process that is extended to the entire country. I am also not satisfied, as I have said, that in the long run this legislation will be in the best interests of smaller, independent operators or of rural motorists. I am not satisfied that the government’s energy package will benefit those most in need of a break either in price and access to fuel or in operating smaller rural outlets and workshops.

I support the second reading amendment for the substance contained therein, particularly around the Trade Practices Act. It should have been introduced as a cognate bill with this legislation, so important is it to implement the Dawson and Senate recommendations. So the amendment has my support. But I have grave reservations about the impact of this legislation on smaller rural operators. I will certainly look with interest at any amendments that might be moved in the other place that would further protect the interests of those operators.

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