Kim Wilkie (Swan, Australian Labor Party) Share this | Hansard source

I am delighted to add my voice to those of my colleagues who have spoken on the Petroleum Retail Legislation Repeal Bill 2006, and I endorse in particular the approaches taken by the Leader of the Opposition and the members for Batman and Hunter in their speeches on the bill.

Unfortunately, the bill as put forward by the government highlights the government’s failed approach to petrol retailing in that it has taken so long for the government to act on these issues. Yesterday, we had the unedifying spectacle of a rattled Prime Minister cobbling together a hasty reaction to the fuel issue in an effort to shore up his support amongst his frustrated and angry backbench—and his backbenchers are justifiably angry. They have been telling the Prime Minister, the Deputy Prime Minister and the Treasurer for months that rising petrol prices are causing pain throughout the country. But the Prime Minister has been blithely telling them that it is not his fault, that the cause of rising prices is tied up with overseas oil and that there is nothing he can do—that is, until yesterday.

Yesterday the Prime Minister announced a range of measures to alleviate pressure coming from the issue of petrol prices, and he pinched a number of ideas from the Australian Labor Party. We do not mind that. We are big enough to take that and to congratulate the Prime Minister on taking our ideas on board. But, unfortunately, the government has not taken up all of our policy suggestions for fuel independence, which the Leader of the Opposition announced in his blueprint on fuels last October.

The government has at last adopted Labor’s policy to subsidise the conversion of cars from petrol to LPG and the guaranteed supply of LPG from a network of distributors. Unfortunately, this approach is likely to be compromised by yet another Howard government failure—our skills shortage. The subsidy will increase demand on an already overstretched industry in terms of conversions. As the Leader of the Opposition pointed out yesterday in the House, in Western Australia there are no conversion workshops in Karratha or Port Hedland, so vehicles must be sent to Perth for conversion, which alone costs $750.

Given the government’s track record on fuel taxation, there are also no guarantees that it will not be mean and tricky again and at some stage increase the tax on LPG. I know that members do not need to be reminded that, in the last parliament alone, the government changed its mind three times about the excise regime. In fact, it was not that long ago that I remember the Treasurer sneaking in an excise rise in the rate of LPG in a budget. There was such outrage from industry—and also taxidrivers, strangely enough—about what was being proposed that almost overnight the conversion industry went broke. Tank manufacturers were going out of business because people were not converting to LPG, and the government had to do an automatic backflip, so to speak, to try and reverse some of these trends. Here we are, and the government has come full circle and agreed with Labor’s philosophy that we need to subsidise people who take up the option of converting their cars to LPG.

There is a very important ingredient of any sensible response to the fuel crisis, which the Prime Minister has again squibbed. He keeps telling us that the ACCC has the powers to monitor retail fuel prices. That is true, and the ACCC does that on its website. But it should have the power to formally monitor petrol prices at the terminal gate and to obtain all information from refiners, wholesalers and major retailers and conduct other investigations into rising petrol prices.

One of the amendments we seek to the Petroleum Retail Legislation Repeal Bill is that section 46 of the Trade Practices Act be strengthened to provide greater scope for dealing with abuse of market power. The amendment we seek to this bill, as explained by the member for Batman last Thursday, would enable sharper and better monitoring of petrol prices; the evaluation of the market share and new investment potential for other fuels such as ethanol, biodiesel, LPG and CNG; the evaluation of the availability of those other fuels around Australia; the examination of excise arrangements for other fuels; the review of the trade practices framework for petrol marketing; the investigation of the feasibility of gas-to-liquids fuel plants in Australia; the examination of resource rent taxation arrangements for the gas field developments; the consideration of infrastructure investment allowances for investment in gas-to-liquids infrastructure; the development of a funding scheme for R&D into alternative fuels; alternative fuel vehicles to be tariff free; tax rebates for converting petrol cars to LPG; and the re-examination of the depreciation regime for gas production infrastructure. These are all important ingredients in the Labor Party’s approach to the fuel crisis facing Australia today.

Political reality decrees that it is difficult for governments to accept the policies put forward by oppositions. I would be naive if I thought that the situation could be any different for fuel policy, but I commend the amendment put forward by the member for Batman as a sensible and positive framework which would enable all realistic options to be examined and considered in a constructive way. It would be good for all Australians if the government could for once forget its pride and adopt the approach outlined by the member for Batman. But I know that this is pie in the sky for this government.

There are no simple fixes to the problems we are facing as a nation as we deal with the impact of higher fuel prices on family budgets and on businesses. The insidious aspect of fuel is that it is an input to just about every service or good produced in Australia. That is why increases in fuel prices underpin inflationary pressures throughout our economy and, indirectly, rising fuel prices ultimately impact on interest rates. So fuel prices hit families and businesses directly, but they also have pernicious impacts indirectly through their impact on interest rates. That is why so many Australians are hurting at the moment. The truth is that the pain that they are experiencing could have been avoided.

This bill repeals the Petroleum Retail Marketing Sites Act 1980 and the Petroleum Retail Marketing Franchise Act 1980. These acts are no longer effective, as they cover less than 50 per cent of the petrol retail industry by volume of sales. The Oilcode, which will be introduced as a mandatory industry code under section 51AE of the Trade Practices Act, will bring the whole industry under a common regulatory regime. This is sensible and appropriate. The Oilcode will improve the protections available to commissioned agents and independent operators, who currently do not have the protections afforded to franchisees. Both franchisees and commissioned agents will also have access to low-cost dispute resolution schemes for the first time.

As I said before, it is essential that section 46 amendments to the TPA are made to address outstanding concerns about the abuse of market power. I understand that the government has agreed to these changes, to be made in other legislation to be introduced into the parliament at a later date.

The introduction of the Oilcode is an important improvement to petrol retailing, and it is a reform which is long overdue. Since its election in 1996, the government has been talking about the need to reform petrol retailing—long on talk, short on action until now. Unlike the government, the Labor Party knows that national leadership is needed to develop an agenda for the use of those fuels which will become cheaper in the future. This agenda is neatly summarised in the amendment moved by the member for Batman. This agenda is necessary and, as I said, long overdue.

At community forums and morning teas throughout my electorate of Swan, one of the most often discussed topics is the fuel industry and the outlook for petrol prices. People know that the price of petrol is fundamentally determined in the international marketplace. They also know that we are too dependent on petrol and that it is sensible to explore the feasibility of adopting other fuels. They want to see action on this front as a matter of urgency. Families and businesses in my electorate are hurting because of higher fuel prices, just as they are in most electorates in the country. I say ‘most’ because, according to the member for Wentworth, these issues are not hitting so hard in his own electorate. But, in electorates in the rest of the country, as members of parliament we all know that people are feeling the pain of higher fuel prices on a daily basis. They know that the government collects almost 40c of the price of each litre of petrol. They want relief.

Many members will recall the early months of 2001, in the immediate aftermath of the introduction of the GST. The government lost a by-election in the seat of Ryan, up in Brisbane. The reason for that loss was the bad publicity the government was receiving for what was perceived as a swiftie it pulled when the GST was introduced. I know that you will recall, Mr Deputy Speaker, that when the government introduced the GST the excise on fuel was supposed to be adjusted in full so that the price of petrol did not rise, but in reality that did not happen. The government provided some part of the necessary adjustment but not the full amount. This swindle became very apparent to Australians, including the voters of Ryan, and so it was not surprising that they voted against the Liberal candidate in numbers sufficient to cause the government to lose the seat.

As the Liberal Party did the usual navel gazing after the by-election loss—and the previous drubbing which the coalition received in the Queensland state election—members may recall that a curious document came to light. It was the infamous ‘mean and tricky’ memo written by former federal Liberal Party president Shane Stone to the Prime Minister, which was leaked to the doyen of the press gallery, Laurie Oakes from Channel Nine. According to Mr Oakes, one of the major points of the memo was to do with the introduction of the GST. ‘We have just been too tricky on some issues’, said Mr Stone with regard to the GST on caravan park fees, beer and fuel. In terms of the impact of the GST on fuel, it was the government’s failure to honour its promise that the excise would be fully adjusted to ensure that the introduction of the GST did not lead to a rise in petrol prices that did the damage. Once again, the words of the then Liberal Party president are proving true in the way in which this government approaches fuel policy.

There is currently an inquiry being conducted in the other place into petrol prices and there is a submission to the inquiry by the Motor Trades Association of Australia, the MTAA. It makes interesting reading and I commend it to members. In its submission, the MTAA explains the very complex formula used to calculate the wholesale price of petrol in Australia, which then, of course, determines to a large degree the Australian price of petrol at the bowser. Import parity pricing means that the wholesale price of petrol in Australia is determined by making adjustments to an ‘international benchmark price of refined petrol’ set in Singapore for Australian fuel standards, wharfage, freight and insurance. This calculation is made in US dollars, which then have to be converted into Australian currency. This means that exchange rate changes can have a significant impact on the retail price of petrol.

One question which often comes up in discussions about petrol is: where is the advantage to Australia from having our own oil and gas fields? Obviously Western Australians are acutely aware of the huge expanse of oil and gas fields in the North West Shelf. The argument often put is that if we refined our own crude oil in Australia we would not be paying a price which is determined internationally. Obviously the oil companies have argued successfully that in order for them to invest in exploration they must be able to charge a higher price for petrol to make that investment worth while. Fair enough. But the international benchmark price is based on the cost of refining oil in Singapore, not Australia. The MTAA submission calls for the ACCC to undertake a complete review of the international benchmark price, including how the Singapore price is set. Such a review could also highlight the components of the wholesale price in Australia at the terminal gate. As I said, the MTAA submission is worth reading and it raises some very salient questions.

Just looking at what has gone on in my own electorate in terms of petrol prices, the increases are stark. According to FuelWatch in Western Australia, since January 2006 petrol prices in metropolitan Perth have increased by 40 per cent. That is a huge impact on family budgets by anyone’s reckoning. The government’s tax cuts do not compensate for the petrol price hikes, let alone the recent interest rate rises. The impact on businesses, especially small businesses with tight margins, is also severe. My message to the families and businesses in Swan is this: Labor will deliver a practical and comprehensive approach to fuel and we will leave no stone unturned in assessing the viability of alternative fuels. As outlined by the Leader of the Opposition in his blueprint last year, the Labor Party’s approach is to develop existing alternatives, such as liquid petroleum gas, ethanol and biodiesel; emerging alternatives such as compressed natural gas, liquid fuel from gas and stored electricity; and future fuels, such as hydrogen. These steps will stand us in good stead as we seek to protect Australia’s interests in the wake of rising fuel prices.

The Prime Minister knows that his government is suffering as a result of rising petrol prices, and now he is scrambling for initiatives to make it look as though the government is on top of this issue. Anyone watching the Prime Minister’s demeanour this week will at last know that he is rattled. It is not just because of the courageous stand taken against him by the members for Kooyong, Pearce and McMillan, as well as the abstentions of the members for Cook and Forrest and the strength of Senator Troeth. His rattled visage is also due to the fact that the government is clearly on the back foot with regard to petrol prices and interest rates. I call on the Prime Minister and his tired government to look at the petrol price issue objectively. If there was ever a time for the government to take a lead from Labor, it is on this issue. The government is demonstrating that it has run out of steam, and, thanks to the Leader of the Opposition and the members for Batman and Hunter, quite clearly Labor is setting the agenda.

See this speech in context