John Howard (Bennelong, Liberal Party, Prime Minister) Share this | Hansard source

Obviously the Leader of the Opposition and I read the same news report this morning. My take is totally different. I thought that story was good news. I thought what it demonstrated was that the policy of the government is working. The Leader of the Opposition is a very interesting man. You bring in a subsidy that has a dramatic effect on the conversion rate to LPG, and the Leader of the Opposition says: ‘This is terrible. We’ve got to do something about it.’ Let me tell the Leader of the Opposition that the Australian LPG association estimates that it will take around six months for the industry’s capacity to meet demand. As a result of the measures introduced by the government, there will be about 105,000 conversions—that is their estimate—over the 12-month period from the introduction of the measure. That is significantly higher than the current rate of about 32,000 a year. Let me quote from the words in a letter to my colleague from Tony Chapman, one of the LPG spokesmen quoted in the Australian article. He said this, inter alia:

... my view is that this policy is a great initiative from the federal government to assist the consumer who are paying high petrol prices as well as benefiting Australian’s environment and energy diversification.

There has been a huge response to this initiative. Of course, when you provide a subsidy for something that previously has not been subsidised you are going to have a short-term excess of demand over supply, and no skills policy, no technical education policy, is ever going to provide for it in advance. If you provided in advance for every subsidy that might be introduced, you would have a lot of idle capacity. It shows just how little the Leader of the Opposition knows about the ordinary laws of supply and demand.

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