Warren Truss (Wide Bay, National Party, Shadow Minister for Infrastructure and Transport and Local Government) Share this | Hansard source

In responding to the minister, who is now walking out of the chamber, we did do it in government. In 2000 when we introduced A New Tax system we substantially reduced fuel excise. We did it again in 2001 and then we abolished indexation of excise, so we froze the excise rate. We have form. We have delivered. We are undertaking to do it again and to take a further step in reducing the government’s tax take, particularly at a time when the price of fuel has reached such exceptional levels.

The government’s only answer to this question is to introduce Fuelwatch. The Prime Minister and government ministers seem to be basing their case for FuelWatch around an ACCC report in 2007 into unleaded petrol. It is quite a substantial document of many, many pages. Today in question time the Prime Minister was unable to identify a single line in the report which recommended that Fuelwatch be introduced. The report does not recommend that there be a Fuelwatch scheme. Indeed, it raises quite a number of serious issues that would need to be resolved, and satisfactorily resolved, before you could even contemplate such a scheme. The government is basing its case on a flawed interpretation of an ACCC report and statements which simply do not stand up.

Amongst the things that the ACCC indicated that needed to be resolved before you could progress something like a Fuelwatch scheme were limitations on the analysis that has already been undertaken which might influence the direction of the recommendations; the effect of a price commitment arrangement on independents; whether regional and country markets are sufficiently competitive to benefit from increased price transparency; the effect of Fuelwatch on price cycles and, therefore, some consumers’ ability to predict the days of the week when prices are likely to be relatively low; and the dependence on the media and various systems of publication to realise the full benefits of the scheme. There were also administrative and compliance costs associated with a national scheme. The ACCC concluded that a detailed assessment addressing these issues would have to be made before the government could confidently embark on any one of these options.

There is no evidence whatsoever that the government in fact accepted the ACCC’s advice that there needed to be some significant further investigation before embarking on this measure. In fact, all the advice that they received from the minister for resources, perhaps the man who knows more about these issues than any other minister, was that they should not proceed with Fuelwatch, that it was likely to damage motorists, reduce competition and affect particularly the people of Western Sydney. The reality is that the government were confronted with the reality that this scheme would not work. They rely heavily on the experience in Perth to underpin their proposals for a Fuelwatch scheme. However, the report by the Australian Competition and Consumer Commission into the FuelWatch scheme and its operations in Western Australia emphasised, quite clearly, that there were other factors that needed to be considered in assessing whether or not there had been a reduction in the price of fuel in Western Australia since the introduction of FuelWatch. The evidence was quite clear.

In fact, on 24 April 2003, the West Australian contained an article entitled ‘FuelWatch branded a flop’. As early as 2003 they were saying that FuelWatch was a flop. They went on to point out that FuelWatch has failed because Perth motorists were paying 3c a litre more for fuel than in the eastern states. They introduced this scheme—all the bureaucracy and inconvenience to small business—and the cost of fuel was actually higher in Perth than in the other states. And we heard today in question time that it has not changed; the price of fuel in Perth is still higher than in the eastern states. The figures from motormouth.com.au are: $1.40 in Brisbane, $1.49 in Melbourne, $1.50 in Sydney, $1.51 in Adelaide and $1.55 in Perth. Indeed, if you look back over recent weeks, in almost every week the price in Perth, with the benefit of FuelWatch, was higher than in the eastern states.

Almost all observers believe that the only real downward pressure that occurred in Western Australia in relation to fuel pricing during the period that FuelWatch has been in operation resulted from the introduction of Coles and Woolworths into the market. There was a reduction of one or two cents in the average price of fuel in Western Australia at about the time that Coles and Woolworths entered into the market in 2004. Frankly, the experience in the eastern states has been the same. When Coles and Woolworths went into a market, the price went down. If you go to a town that has a Coles or Woolworths petrol station, the prices tend to be lower there than anywhere else.

So there is no doubt at all that there were clear factors that influenced fuel pricing in Western Australia and in the eastern states. There are pluses and minuses in each of the markets. Western Australia actually has a freight advantage in bringing fuel in from the Asian refineries, so there is a strong case that the price in Perth should always be lower than in any of the other markets. Instead, it has been largely higher than in the eastern markets. The fact is that FuelWatch has been a failure in Western Australia and for that reason there is no logical basis for it to be spread to other parts of the nation.

You do not just have to take our advice that FuelWatch has been a failure: ask the motoring organisations. I know that members opposite are very keen to quote the NRMA, its president, who I understand is currently seeking Labor Party preselection, and his deputy spokesman, who was once a Labor Party minister in this place, as being supportive of Fuelwatch. But if you talk to any of the other motoring authorities around Australia, they have a completely different view. The RAA of South Australia said in a press release on 14 April 2008:

... most of the ‘experts’ pushing for the Western Australian FuelWatch scheme seem to be poorly informed.

The RACQ said:

The Federal Government’s desire to get fuel prices off the newspapers’ front pages at any cost could be at the expense of most motorists ...

The RACV, the Victorian organisation, has been particularly strong in condemning the Fuelwatch scheme as being of no value whatsoever. They have said on regular occasions that this scheme will not work. They said:

... no one has yet provided any evidence that motorists in Western Australia are better off than motorists in the eastern states ...

FuelWatch has not worked in Western Australia and it will not work anywhere else.

The Australian Chamber of Commerce and Industry has rejected the concept of price controls on fuel. The 24-hours-in-advance notification of prices will actually depress competition in the marketplace.

If you want a clear example of how this scheme is so fundamentally flawed, how can you have a scheme that actually fines a service station that dares to put its price down during the day? There is a $5,000 penalty. And the crime: it put the price of fuel down. I thought the government was trying to lower fuel prices and would want to encourage service stations to lower prices whenever they possibly could. But in reality under the Western Australian scheme and the scheme that is proposed to be introduced at a national level, any service station that dares to lower its prices on the day will actually be fined.

One of the other interesting observations that people have made in Western Australia when a service station managed to get trapped at a low price level is that it tended to run out of fuel or the bowsers broke down. There are all sorts of reasons why, when it was losing money, a service station would walk away from the arrangements on the day until it could reprice its fuel at a competitive level.

The other issue of particular importance is the impact of this scheme on independents. Independent operators will do very badly under an arrangement like this. They only have one or two outlets. Considering the capacity of Coles and Woolworths type networks, how can the independents possibly manage their losses—manage their profits at one service station against the losses at another? They are the people who get trapped. They are the ones who are held out on a limb.

The member for Leichhardt made it absolutely clear during his visit to parliament before he trotted off home that he could not care less. To use his words:

I am not concerned that FuelWatch is going to reduce the number of independents.

He let the cat out of the bag. The member for Leichhardt said that Fuelwatch is going to reduce the number of independents. It is actually going to reduce competition and he could not care less. These independents have been critically important in many markets, particularly regional markets, for putting some downward pressure on fuel pricing. To lose those independents not only is a shattering blow for small business—the people who have to bear the administrative load of this arrangement—but will also affect motorists and consumers, whose price for fuel will rise.

While I am talking about regional areas and the impact of this scheme on those areas, what possible use is a Fuelwatch scheme—with all of its administrative costs, including the cost to the budget and the cost to small businesses particularly—in a country town with one service station? You do not need to look up on the internet to find out what the price is—there is only one price in town. And yet these sorts of service stations can also be put through the whole administrative burden of a scheme that has been devised by Labor.

So you might say: ‘This scheme is no good in the country. It is not going to have any impact or value there. So maybe it is good for the cities.’ Yet we have the minister for resources belling the cat and making it absolutely clear that it is the people of Western Sydney who he thinks will be worst off. I do not want a competition between who is going to be worse off. If this scheme is to be introduced, the government must give us a commitment that no motorist will be worse off and that the price of fuel will not go up.

The Prime Minister has, during question time, repeatedly refused to give a guarantee that the price of fuel will not go up under Fuelwatch. He has not been prepared to do it. He has not been prepared to give a guarantee that his scheme, which is going to cost the taxpayers and the industry money, will not actually also cost motorists money—that the price will not actually go up. Certainly we know that the bottom prices will disappear, but will the high prices go up as well? The reality is that Fuelwatch will not work. It has not worked anywhere in Australia and it is a failed attempt to address rising public concern about the price of fuel in this country. The Labor Party have no answers. The government have no solutions. They are not prepared to take any significant action. All they are prepared to do for this ‘little problem’ is to tell everybody that the public are happy, that they have done all they can and that it is all a problem of other people. They are not prepared to grasp the nettle and do what they can to reduce excise charges. They could do that tomorrow. They could reduce it tomorrow. They introduced new excises overnight. Overnight they could also reduce the price of petrol, and that is what they must do. (Time expired)

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