Tony Windsor (New England, Independent) Share this | Hansard source

I was pleased but a little bit disappointed in some ways to listen to the Prime Minister’s ministerial statement in terms of energy initiatives. I would like to make a number of comments in relation to some of the things that the Prime Minister put forward.

Obviously—and I think most people would agree—the LPG announcement that the government made is positive to a much smaller degree than the government is hoping it will be. Some people may feel a little bit cynical in relation to its introduction, particularly at a time of very high oil prices. In a sense, the government is looking for a detour in the debate, hence the introduction of the LPG arrangements. I think there will be a small uptake and that, for a number of reasons, it will be much smaller than that which the government is budgeting on.

I know that members of the chamber would be aware that liquid petroleum gas in a few years time will move into an area where it is taxed, whereas in the past it has not been taxed. One of the underlying problems with the whole energy debate and the debate that we are having now on energy initiatives is the fact that we are taxing energy in this country. When I was an economics student, and since, in business et cetera, I always believed and had been taught that if you had an advantage in something in terms of export et cetera—particularly nowadays in a global market with globalisation taking place at the rapid rate that it is—then you took advantage of it.

What we in this nation do is tax the major ingredient to the running of the nation. We have this extraordinary nation of low population, large landmass and people living across that landmass. There is public transport in the major metropolitan areas and very little elsewhere, but we continue to have a policy which is developed around what you would see in a closely developed, public transport oriented European society. We do not live in that sort of world but our energy policy and initiatives tend to be based on that sort of outlook. Even though I have heard the Treasurer, the Prime Minister and others on a number of occasions try to justify that particular policy view, it is difficult to comprehend when we live in a nation of this size where energy costs are part of our daily lives, particularly for country people who do not have a choice between a subsidised public transport system and using their own vehicles.

In a sense, I would say that the government has shown very little initiative in terms of energy. Its approach has seen a simple form of taxation receipts where, as usage goes up, it can take more and more. By taking tax in little dribs and drabs at the bowser, where people do not necessarily notice it coming directly from their pockets, the government can accumulate vast sums of money.

Those vast sums of money are currently at about $14 billion annually. About $2 billion of those receipts actually goes back into the road network in some shape or other. Many members would remember that the origin of the federal excise was, in fact, the road tax arrangements that were put in place about 25 years ago. The taxation receipts from energy have grown over the years because of that. Admittedly, a few years back the government removed the indexation of the excise—and I compliment them for doing that—but there is an enormous amount of money coming from the excise on fuel. I do not see that as being an initiative at all; in fact, I see it as operating against a country that is trying to compete internationally.

We are continually told by some ministers within the government that agriculture and industry have to be able to compete internationally and to stand on their own two feet or they will go by the wayside, but we have in place an undermining of their financial structures. The question of energy runs through all industries, all communities and all individuals, who use it in their homes and so on. In some shape or other we have this regime of energy use, particularly petroleum energy, as a form of taxation receipt. Some in the government may suggest that it is way of rationing the use of the product by sending an economic signal to people to modify their behaviour and reduce their use of fuel. I say that is a red herring. I think the system is in place purely to raise revenue, and I do not see any initiatives where the government is actually looking at a means of raising revenue other than through fuel excise et cetera.

I would say the government’s movement on energy initiatives has been quite appalling. Even in areas where taxation did not apply some years ago, the government recently introduced legislation that would impose taxation where taxation had not applied before. They have developed this argument that the excise is related to the energy generated from the various products.

I refer particularly to one instance: ethanol was once untaxed. Now there is legislation, even though there is an excise-free period—and thank you to the Democrats and others in the Senate who stood up on this issue—until 2011, I think, and then taxation will be applied. Here again we get this mixed message. We have great concern about greenhouse gases. We had a debate in the parliament today during question time about whether the Kyoto agreement should be signed or whether there are other ways of delivering the same outcome, depending on which side of the debate you happen to be on.

What has the government actually done? It has imposed a taxation regime on people who are very keen to invest in renewable fuels. It has imposed a regime similar to that already on fossil fuels to sustainable renewable energy sources of fuel. The message it sends to the investment community domestically is quite horrendous. The government also put in place—back in the year 2000 before I was a member of this parliament—a mandatory renewable energy target of 350,000 megalitres. That was the target then. I am told—and the member for Kennedy and others have mentioned this figure from time to time, and statistical information I have seen verifies it—that currently we are at a rate of 30,000 megalitres.

The Prime Minister had a cup of coffee with the fuel companies about 12 months ago to try and avoid the mandatory position that some were suggesting we should take—I was one of those people. Following the cup of coffee, some voluntary agreements were reached by the fuel companies and the Prime Minister that the fuel companies would achieve certain levels on an annual basis with a movement towards this 350,000 megalitre figure by 2010. We are six years in and we are at 30,000 megalitres. We have to multiply that by a factor of 10 to get to this paltry rate of 350,000 megalitres. This year the fuel companies, I am told, were supposed to have reached something like 90,000 megalitres. They got to a third of that. That says a number of things to me. The fuel companies are not serious about renewable energy in terms of biodiesel and ethanol, and the Prime Minister and the government are quite happy to let them play the game in front of the ball. Even if 350,000 megalitres were reached, it is 0.8 of one per cent of our petroleum needs. If that is an achievement, an initiative in terms of moving towards a sustainable form of energy, a renewable form of energy that has an impact on a whole range of environmental and health outcomes—small particle emissions from vehicles, the carbon balance and a whole range of positives—and an initiative of great magnitude, I would hate to see a small one.

One of the things I suggest—and I have suggested it before by way of a motion in the parliament which was not adopted, I must say—is that the government and the opposition look seriously at setting up an authority. I would call it a sustainable energy authority. Rather than politics taking the main part of this debate, we should put in place an authority made up of expert scientists et cetera that can develop a strategy for the future and some decent initiatives for the future in terms of our energy requirements; that that authority not only look at the health and environmental aspects but also at the domestic production of some of these products; and that that authority also look at ways and means to achieve some sort of self-sustainability in relation to some of our energy needs. The United States are doing that. They have recognised that, given the events of the last five years in terms of terrorism and some of the religious conflicts that are occurring, they have to remove themselves from a reliance on the Middle East for some of their energy sources and they are moving at a massive rate to look at biofuels et cetera and many other alternatives. I am not suggesting biofuels are the be-all and end-all, but it is part of the fix and it is a renewable part of the fix that our agricultural sector could be very much involved in.

That authority should also look very closely in my view at the messages—economic, health and environmental, social and investment—that are sent by taxation on fuel, using fuel as a source of revenue. Perhaps, heaven forbid, we could actually look at achieving similar sources of income from other means. The goods and services tax was introduced to replace what was seen at the time by this government as archaic penalties which were being imposed on the communities by the states through some of their ridiculous taxation incentives. I think the same thing could be applied here. We have to look at some of the options.

I was recently in the United States. Their federal government had backed up the states in their energy standards and quality legislation relating to biofuels. One of the things that came across very clearly was that the industry could never have taken off if the states had not mandated a certain level of usage, with that level of usage being phased in over a period of time. For instance, in the city of Minneapolis the 10 per cent mandate had been phased in over a four-year period. Major cities were done in the first year, the outskirts of the major cities were done in the second year and the country areas were phased in in years 3 and 4. It was not necessarily done just to support the regional economies of agriculture, although that was a very important part. It was also done to improve the health regimes—the emission controls—within those particular cities. In conclusion, I would say to the Prime Minister that the initiatives have been very poor. We need to address these issues and we should do so in a much more substantive fashion. (Time expired)

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