Nicola Roxon (Gellibrand, Australian Labor Party, Shadow Attorney-General) Share this | Hansard source

Given that the debate on the Petroleum Retail Legislation Repeal Bill 2006 has been going on for some time, we know that it essentially deals with the retail aspects of petrol and changes that have occurred in the industry which go back even further than the last 10 years. It is a very important bill because it does, at last, recognise significant changes to the industry and the need for us to repeal legislation that has been in place and replace it with a proper Oilcode that will more comprehensively cover the industry.

I am particularly moved to speak on this bill because, like many other members in this House, I am aware that, behind all of the regulatory issues that are of concern, there are two even more pressing issues, and they are all interrelated. Australians in my electorate, as elsewhere, are suffering from the current high petrol prices. Hand in hand with that, people are increasingly fearful that, as a country, we cannot afford to remain dependent on foreign fuel, which predominately comes from the unstable Middle East. Many of the speakers on this side of the House have already canvassed some of these issues. As representatives in this place, we all feel very acutely the pressures that are on families in our electorates. Action needs to be taken because the current pressures on those families is, I think, coinciding with the need for us to take some national decisions and some strategic decisions to ensure that we secure our future fuel needs without such heavy reliance on other countries.

I want my contribution to touch on these three aspects: the change to the retail and regulatory regime, steps that might provide some relief from the current prices, and investments that need to be made now in alternative fuels and technologies, as set out by the Leader of the Opposition in October last year—well before the latest price hike really started to bite in our community.

As we all know in this place, constituents are having to tighten extensively their budgetary belts and many are drastically rearranging aspects of their day-to-day life to take account of the huge impact that high petrol prices are having on their family budgets. We have all read stories in the newspapers and many of us would have had representations from our constituents about these pressures. For example, young people who have not been driving for very long, who are in their first job or studying and who do not have a lot of extra money or disposable income suddenly find that the income they are earning in their part-time job is not sufficient to cover even their petrol needs. Perhaps they have to make a decision that they cannot be involved in a sporting activity because it costs the extra amount of money that they are now paying in petrol.

We can all see that, with the price of petrol at $1.40 and more per litre, the average tank of petrol now costs over $70. This is having a huge impact on people’s lives every single day. I can give one example—although there are thousands and thousands of them across the country—of a family of five who live in my electorate of Gellibrand, in Melbourne. This family, like many others, has two cars. They have had to rearrange their entire transport strategy as a result of the ever-increasing petrol prices. The mother, who drives further than the father to and from work each day, has had to swap cars. The family has three children and, because two other children often travel with them, they drive a large patrol car. But it guzzles petrol and cannot be used to drive to and from work anymore because it is far too expensive. However, even the smaller car goes through about $60 a week in petrol, which is up $20 from the $40 a week that it cost to fill it less than a year ago. For a family of five that is juggling to make ends meet as it is, an extra $20 a week is not an insignificant amount.

Public transport is not a real option for this mother and this family. She drops off kids to school on her way to work. She does the shopping and other errands on the way home. Like many mothers in our community and many parents generally, it is simply not possible for her to achieve any sort of work-life balance without using her car. Her partner drives a larger car to the local train station, as it is much more cost-effective for him to use public transport than to pay the high petrol prices to drive all the way to work. This takes an extra half-hour of travelling each way, each day. In addition, of course, the family are keeping a very close eye on their shopping trolley as they try and make up for the lost part of their budget each week.

I want to emphasise that we could pick almost any family across the country who could tell you the same story. There are very many people—whether they are students, people driving their first car or families who need the car to get the kids to and from sporting activities or to and from school and who often do a lot of running around in cars, as many in this place would know—for whom it is just impossible to adjust their lives in such a way that they do not use petrol at all.

Even if we can encourage consumers to moderate their use of petrol, is it really going to be possible for us to use that as the solution to high petrol prices? I do not think so. Increasingly, people are working further from their homes. The distance they are travelling to work is becoming an issue. The adequacy of public transport to get people to and from work as workplaces are becoming more dispersed is also a challenge. It is not realistic for us to consider that people will be able to do a lot of their day-to-day activities without cars. We would have to be thinking and planning a very long way ahead if we wanted to see that as a solution to the petrol problem.

But we also need to address the fact that this issue is not just for individual drivers and families. They may be able to soften the blow of these extra costs by changing their car use, which of course would be a good thing, but what alternatives are there for businesses, particularly those that rely heavily on transport? There is not just the transport industry as a whole but manufacturing, transporting products and parts between different sites. Obviously the distribution of many of our foodstuffs, let alone other, more manufactured goods, is a serious problem. We have to look at the way that we can sustain these industries with alternative fuels.

Although this bill might help in some small way to deal with price pressures, it is really just setting up a framework which is more realistic in terms of how the industry now operates. I must say that, without the changes that are being suggested by my colleague the member for Batman and that have been moved in his second reading amendment, this bill is not going to have as much impact as it could have.

One of the most obvious examples is Labor’s call for the ACCC to have the power to investigate price gouging without needing the Treasurer’s consent to do so. Many of the speakers in this debate have dealt with this issue. Even the member for Capricornia, who spoke before me, was talking about what I think everyone in the community is often curious and suspicious about: the way the prices change on the weekends and the way they seem to immediately change when there is an incident overseas. There is not a huge confidence in the community that petrol prices are set in a fair way, particularly the variations that happen week in, week out.

We in the Labor Party would like to give the ACCC powers in its own right to investigate potential cases of price gouging. This is an important proposal. It would be fantastic if the government could just see its way to accepting something that we have proposed. The ACCC might not find that there is extensive price gouging going on, but it might give the community much more confidence that the price increases that do occur are occurring for legitimate reasons rather than because distributors or retailers are making the most of world circumstances.

But first let us go through a bit of history on the legislation that we are repealing. The Petroleum Retail Legislation Repeal Bill 2006 that we are debating seeks to repeal the Petroleum Retail Marketing Franchise Act 1980 and the Petroleum Retail Marketing Sites Act 1980 and replace these two acts with an industry code known as the Trade Practices (Industry Codes—Oilcode) Regulations 2005.

When these two acts were originally made law, they were designed to counteract the market dominance of refiner-marketers, the oil majors such as BP, Caltex, Mobil and Shell, and the aim was also to encourage small franchisees into the retail industry. Since the 1980s, however, structural changes have rendered these acts outdated and ineffective. They cover only part of the industry—I was quite staggered to learn that they only cover about 50 per cent of the industry—and their regulatory coverage differentiates between different suppliers in the market, for example, the large franchisees and independent operators. Clearly this is not a workable position for this industry to stay in. The net effect of the current legislation is that different market participants are subject to widely varying regulation. It does not cover supermarket chains which have come into the market in such force in recent years.

So Labor is pleased that the new Oilcode will provide a more effective industry-wide regulation of the petrol retail sector, provide better protections and regulations than currently exist and bring the supermarket chains under a mandatory industry code of practice for the first time. All of this is welcome. The code will also establish standard contractual terms and conditions for petrol-reselling agreements between wholesale suppliers and retailers. These might sound like technical changes—if anyone is listening to the debate at this time of night—but I think that it is important, when we have this lack of confidence in the community that prices are set in a fair way, that we do everything we can to ensure that all of the players in the industry are competing on a level playing field where contractual terms are going to be dealt with in a regulated way. When these standards can build upon and strengthen relevant provisions of both the franchise act and the more general Trade Practices (Industry Codes—Franchising) Regulations 1998 and the relevant code of conduct, this does provide greater certainty and protection for all parties to fuel-reselling agreements. It includes the introduction of a nationally consistent approach to terminal gate pricing. These arrangements will improve transparency in wholesale pricing.

Importantly as well, the code is going to establish an independent downstream petroleum dispute resolution scheme to provide the industry with a cost-effective alternative to taking action in the courts. Again, this is important because, if we are able to find that there is some dubious activity going on in the industry, we need to have a way of being able to effectively take action. This will allow both industry players and consumers to have an effective way of being able to resolve these disputes. So although the code is not perfect it is a vast step forward. The bill has the support of the overwhelming majority of market participants, motorists and peak bodies. Labor support the bill but we do think it would be vastly improved by the amendment that has been moved by the member for Batman.

I will not read all of the amendment that is before the House, but I would like to emphasise a number of points that are raised in the amendment because I do think they are important. The first proposal is that we call on the government to require the relevant department, the Department of Industry, Tourism and Resources, to report annually to this parliament about the measures that have been taken and the progress that has been made to increase market penetration of alternative fuels such as ethanol, biodiesel, LPG and CNG, including the number and location of service stations and the names of companies offering these products on their retail sites. It is important that if we use the mechanism of reporting to the parliament then we can have the debate about whether or not it is going far enough, whether we can be doing more as this parliament or as a national government to encourage the increased reliance on these alternative options. We want to secure new investment in biofuel, LPG and CNG production and supply infrastructure in Australia. A report to the parliament about measures that have been taken and progress that has been made to achieve this would be a big step, and I think it would be a big motivator to the industry to make sure that they were actually actively participating and growing their industries.

We also ask the government to secure investment in new alternative transport fuel industries, including gas and coal to liquids. Just that one item moved in the amendment by the member for Batman summarises our view that there is much more that can be done to secure our long-term future in this area. While we must take all steps to relieve pressure now on families and drivers from the cost of petrol and the pain that they are feeling in their weekly budgets, we also have to think about those families 10, 20, 30 years into the future who will be in a far worse position if we do not make some decisions now to invest in these alternatives.

The amendment moved by the member for Batman covers a number of other alternatives that we would like the government to take but we are also concerned, as I have touched on already, that the Trade Practices Act be amended. There have been changes recommended repeatedly by both the Dawson report and a Senate committee in 2004 for the ACCC to have power, as I have already mentioned, to investigate petrol prices without the Treasurer’s consent but also to amend the abuse of market power provisions to make sure, again, that there is a mechanism that can be used effectively if those who are in a dominant position in the market abuse their position of strength.

Other members have talked about Labor’s proposal to conduct a feasibility study into a gas-to-liquid fuel plant in Australia and have also flagged in more detail some of the other options put forward in Labor’s fuels blueprint. We would like the government to embrace more of that blueprint. They have already, slowly, in this last week come to the table on a number of matters that were proposed in that, including looking at what can be paid and the assistance that can be given to consumers who might want to convert from petrol to LPG. We had proposed in the fuels blueprint that we look at making alternative fuel vehicles tariff free, cutting up to $2,000 off the price of the current hybrid cars and granting tax rebates for converting petrol cars to LPG. Further, we want to re-examine the depreciation regime for gas production infrastructure, and a number of different proposals have also been made for that.

So we call on the government to not close the door to these many other proposals. Labor has put a lot of time and thought into the way we can secure our future and make sure that future generations are not as dependent on Middle East oil. Of course, we all wish and hope that circumstances will become more peaceful in the future and we will not be considering the Middle East as an unstable region in the world, but I think it would be unrealistic not to at least plan for the risk that it might remain unstable for some time. In any case it is a good national strategy for us to be able to provide our own transport fuel to our own consumers and our own industry without the dependence on overseas fuel, if that is at all possible. In a country where we are blessed with so many resources, it seems crazy that we are not able to lead in terms of technology and conversion to these new types of industries.

The amendment that I have talked about covers our plans to: find more oil and use more gas in Australia, and I have gone through a number of things that we could do to assist with that; promote the use of alternative fuel vehicles; protect and promote the growth of ethanol, biodiesel, LPG and CNG; and strengthen the ACCC’s powers. I acknowledge that a number of these things are about the longer term solutions but we are anxious to urge the government not just to respond to the particular petrol price hikes now, although we call on them to do that, but also to set in place a clear strategy for how we are going to go forward into the future.

Labor has actually been out there leading the debate. It was last October—nearly 10 months ago—that Kim Beazley announced Labor’s Aussie fuels blueprint. It has that twin purpose of not just reducing Australia’s foreign fuel dependency but also developing existing and emerging alternatives. By contrast, the government has, for all this time, just been sitting on its hands. As we saw recently, the government has just belatedly come to the table and finally started offering some piecemeal solutions to this pressing problem.

But, unfortunately, as we often see with the coalition and their policy-on-the-run approach to these sorts of vital policy issues, what they have offered is too little and too late. The policy was hurriedly cobbled together as a political fix in face of political pressure that has been coming on them. Throwing money at Australians who can afford the up-front cost of converting their vehicles to LPG is a short-term quick fix which does nothing to put any downward pressure on petrol prices and does nothing to address Australia’s long-term energy needs. Quite apart from that, it does nothing for those many thousands of families in the community who may not be able to make that conversion and who in the meantime are going through—like the example of the juggling act of the family of five which I used at the start of my speech—the process of changing entirely the way they use their cars and their transport, how they drop their kids at school and what activities they do on the weekend simply on the basis that they cannot afford to be travelling any more than they absolutely must because of the costs that have increased so dramatically with the petrol prices.

In the absence of the initiatives that I have briefly outlined, and which are set out in the Leader of the Opposition’s fuels blueprint, John Howard’s fuel policy will do little for the overwhelming majority of motorists, who have no choice but to stay with petrol for the foreseeable future. And it will do nothing to reduce our reliance on fuel from overseas, particularly from the Middle East, at a time when it is in such unstable circumstances. I hope that the government will consider the amendment that has been moved by the Labor Party and that we will continue to have a proper debate about our long-term future, because that is the only way that we will be able to resolve this problem. (Time expired)

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