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

I am pleased to have the opportunity to speak in this debate. The debate that is taking place at the moment is a censure motion on the Prime Minister and then the mirror image censure back on the Leader of the Opposition. I will be supporting neither because I think both individuals and both parties have got something of small significance to say on this particular issue. I would like to firstly address the FuelWatch issue. I do not think it will make a lot of difference, and the Minister for Finance and Deregulation alluded to the fact that they did not think it will make a lot of difference either. But I do not think it is going to do any harm and I do not think some degree of scrutiny of the fuel companies will do any harm. It will probably make, at best, 1c or 2c a litre difference at some periods throughout the year. If that happens, that is a positive. It is not worth wasting the last three or four days on, but let us suggest that it is not a negative.

On the other hand, we have the Leader of the Opposition proposing a 5c reduction in excise. Most people would be aware that currently the excise is 38c a litre. It is fixed, it is not indexed anymore. Over and above that we have the goods and services tax, which would be running at about 15c. So there is about 50c to 53c in every litre we buy in terms of some form of taxation. The Leader of the Opposition is proposing to reduce the excise by 5c a litre. The tax-on-a-tax proportion of the 38c excise with the GST interaction is 3.8c, which the opposition, the then government, put into place, so the double taxation effect was taking place under that particular regime. So we have this proposal to reduce fuel tax by 5c. I do not think that is a bad thing and I would support that, so I will not be censuring the Leader of the Opposition for suggesting it. Many members of the public question why we have a regime in this country that actually uses fuel as a cash cow, why that has lasted so long. I am pleased to see that the government is going to have a review into taxation, but it has to have this fuel debacle on the table and it has to have the goods and services tax on the table. It is an extraordinary anomaly where fuel users in this country are paying 33 per cent fuel tax at least. That is an extraordinary thing. For people to suggest, as some from the government do from time to time, that it would be economically and politically irresponsible to reduce that magnitude of taxation on the means of production, the energy that drives the nation, I find quite extraordinary. So I support the Leader of the Opposition on the 5c, given that there is the double taxation of 3.8c in there anyway. It is not much but it is in a sense a positive.

From today’s wasted hours we have probably got two minor positives that ignore the elephant in the room, which is the 33 per cent taxation that all Australians are paying. We have the argument, and the finance minister put it again, and I understand his logic, and the Prime Minister has been putting it and a number of others have been putting it: ‘If you move on that cash cow, what does it do to the budget surplus? How do you come to grips with that? The opposi-tion is being irresponsible by suggesting that a $2 billion hole in the budget suddenly appears.’ I think the present government made a serious error when it me-tooed the Howard government tax cuts. It was a very clever political strategy by John Howard. It actually drained the Labor Party of opportunity to create a new future in how it addressed things. It removed those opportunities in relation to fuel taxation and some of the other taxation anomalies that it will be reviewing in 18 months or two years time. So it took away in one fell swoop a lot of opportunities in terms of the budgetary process. But I think the taxation review that the government is going to embark on really does have to include fuel.

Years ago Malcolm Fraser articulated the idea that we need to have a regime of taxation on fuel to try and dampen down people using it. Some others in the last weeks have argued the same thing again, and I imagine the Greens would do the same. How long is that logic going to prop up this tax on energy? V8 cars are put forward as the bane of society in terms of fuel consumption. The suggested solution for dealing with these V8s is to apply a tax that impacts on everybody to try and reduce the impact of these gas guzzlers. I think that is a fairly ridiculous reason for justifying this tax regime, particularly on top of yesterday’s luxury car tax debate. Yesterday we had an absurd proposition put by the government and agreed to by the opposition. People in the country who need to pay more than $57,000 for a basic model four-wheel drive were sent the message that they could avoid the luxury car tax. Four-wheel drive vehicles in the country are a necessity as a result of the roads because out of the $14 billion that we raise only $2.6 billion gets returned to roads—and the other argument for fuel excise originally was that we needed road maintenance and construction. Well, only about 16 per cent of it is remotely connected to road maintenance and construction. We had this absurd position yesterday where we sent a message in the opposite direction: if you do not want to pay, or you want to pay very little of, the luxury fuel tax for a vehicle that is a necessity, buy a gas-guzzling V8. What are the messages that the government is trying to convey in relation to all these issues?

Overlaying that we have this overarching climate change agenda where, we are told, we have got emissions trouble. We are told that we have carbon dioxide, nitrous oxide, methane and a range of other global warming gases that we have to try and come to grips with. We have got an energy crisis, and some people suggest that there is a global food crisis. Of course if the price of energy goes up the price of food is going to go up. If we assume that we are moving to a different level of energy prices, what can we do about it here? I would suggest that we can do a bit with excise; a third of the cost of petroleum and mobile fuels is tax. Obviously we can do something about that. Maybe we have to look at the goods and services tax provisions and include fuel in that. That would be uncomfortable for some—probably for everybody in here—but maybe that debate has to be on the table. If we are moving to a new plateau of energy prices, we are going to tax ourselves into a comparative disadvantage globally. We will quite deliberately put ourselves into a disadvantageous position. Then in the next breath the farm sector—and I am pleased the Minister for Agriculture, Fisheries and Forestry is here—will be told that they are needed to produce food for the starving millions.

Then we have the climate change agenda. We are told that transport movements and production—and there is one member here who heard this last night—are going to have some sort of carbon footprint. I will use my example again for the minister for agriculture because I think it is important. We have our Walgett wheat farmer. He has a footprint on his own land. He will have a footprint getting his wheat to the Walgett silo. He will have another footprint getting it to the port by train—or truck, perhaps, in New South Wales fairly soon. Then the boat from the port—Newcastle to Egypt or wherever it goes—will have some sort of carbon footprint. The grain that it carries contains starch, which is carbon, and that will have a significant footprint. Who pays for that? I do not know. We have not developed the emissions-trading arrangements yet, but it is something we should know. We export 80 per cent of what we produce; in fact, we overproduce. The transaction is then made. The wheat is cashed in and maybe the odd bribe is paid to sell it to acceptable markets. Then we move into another corrupt market and bring a boat load of oil back from the Middle East. It has a carbon footprint, I would imagine, as it is a fossil fuel. We do not cart oil on trains anymore, so it will be on a truck back to the Walgett farmer so he can go around in a circle and produce grain to send to Egypt to buy oil.

Maybe there are ways we can avoid some of these things, not just with excise and dependency on international factors but maybe internally. The minister for agriculture and others are well aware of the potential for biofuels. Rather than continuing with the ridiculous convoluted energy chase that we are on, surely we should be looking at cutting that corner and looking at local options. We could value-add to what we do well and have an impact on the energy market locally. If we are starting to say that shifting all these things all over the world—a baked bean tin travelling to 17 different countries before it gets to its eventual destination—and having a carbon footprint is problematic, then what are we going to do about it?

One of the things I was pleased to see in the recent budget was some money for research into cellulosic ethanol—biomass. There are techniques out there now. They are in their infancy but they are working in Canada, in the States and in other parts of the world. If people are afraid of using grain for fuel because it has got to feed the starving millions then why don’t we move to biomass? I think the government has got to encourage that. But we cannot keep the tax system the current government has—it has taken on board the previous government’s tax system—where, if you are a renewable energy producer in this country, in 2011 you will start to pay a fossil fuel tax. How is all that going to fit within this so-called emissions-trading and carbon debate? I do not know the answer to that but I think a lot of people do want this tax system, because we have got an absurd debate going on at the moment about little things at the margin when there are big things that need to be addressed, not the least of which is the solar debate.

That was another mixed message in the budget. We means tested it. We have been trying to encourage people to get into solar energy, and what do we do? We turn the sun off in terms of their capacity to access the incentives. Either we have got to have some incentives to do these things in this country or we have got to tell them not to bother: ‘We are not going to have a climate change debate,’ or ‘We don’t believe in emissions trading anymore because it is all too hard.’ We cannot keep running these mixed messages that are out there at the moment.

A document came into my hands this very morning about a pilot cellulosic ethanol plant being developed in New South Wales. The point I would like to make from this document—it relates to this debate quite well—is this:

If the commercialisation program is successful, and research is being undertaken by the govern-ment, production time could be slashed from days to minutes—

That is the issue with cellulosic ethanol—trying to ferment the starch in a reduced period of time so that you can get the unit costs down. With grain it can be done now; with cellulose it is around the corner but close. The document continues:

... and fuel ethanol production costs dramatically reduced. Feasibility studies have concluded that fuel ethanol produced through this process will have a crude oil equivalent cost in the range of US$36 to US$50 per barrel.

If we are serious about having an impact locally, centrally and cutting down on a whole range of transportation issues, we have to start to get serious about renewable energy and do the hard yards, and not exclude it because of this ridiculous food-fuel debate. If we are serious about food in the world, why aren’t we encouraging and helping the Sudan, which has the potential to produce six times the grain production that Australia will ever have? The soils are there. We should be doing those things rather than having this ridiculous debate. (Time expired)

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