Michael Keenan (Stirling, Liberal Party, Shadow Assistant Treasurer) Share this | Hansard source

I rise to second and support the amendment that has been moved by the shadow minister for finance, Mr Dutton. We see with the National Fuelwatch (Empowering Consumers) Bill 2008 and the National Fuelwatch (Empowering Consumers) (Consequential Amendments) Bill 2008, and with all the pain that the government have worn about this issue this week, a government paying the price for their misleading campaign in the lead up to last year’s election, because, having promised to bring fuel prices down, the government are now desperate to be seen to be doing something about it. They had no idea what they were going to do; all they could do was raise the issue. They did not know how they were going to respond. Now they are in government they are desperate to be seen to be doing something.

I think this actually provides us with the perfect example of the way in which this government operates. This is really a perfect example of the modus operandi of this government. This is why the government have been so damaged—because the government have been unmasked this week as a government completely devoid of any substance. The way the government operate is that they raise an issue and then they pretend that they are worried about it. They fret about it and then they come up with some ludicrous plan to say, ‘Oh look, we are doing something about it.’ And of course, in this case this ludicrous plan is Fuelwatch.

I am interested to see what is next. I understand there is money in the budget allocated towards ‘grocery watch’. I see that the Minister for Education, last night on Lateline, was seen to be threatening to have some sort of ‘child care watch’. It is this method of operation—where they just raise an issue, they feign concern about it and then they need to come up with a stunt to pretend that they are interested in it—that leads to appalling policy-making processes that give us legislation such as this Fuelwatch legislation. This is the scheme that was brutally unmasked by the resources minister and by the central economic departments so extraordinarily in the media last week.

I will get to the resources minister’s criticism in a minute, because I think what he had to say about this scheme was very telling. I will deal firstly with the criticism of the central economic departments. Their criticism was that this is a scheme that may actually drive up fuel prices. So we have this ridiculous situation where the government raise an issue, they have no idea what they are going to do about that issue and their only response is something that may have the opposite effect of what they are actually trying to do. We have heard some talk from members opposite about how this scheme operates in Western Australia. I will leave aside the fact that certainly the previous speaker—and I suspect other speakers—has no idea about the history of fuel pricing in Western Australia and no idea about the genesis of this particular proposal and why it was operating in Western Australia. I will leave that aside for the time being. I will also leave aside the fact that those opposite keep quoting the RAC in Western Australia in support of it, even though the RAC in Western Australia is actually opposed to this scheme.

I would just like to go to the issue of whether petrol is actually cheaper in Western Australia or not, because we hear a lot of talk about this and I think it is very, very important to raise it. Indeed, members have been saying consistently that petrol is cheaper in Perth. Last week the Assistant Treasurer actually claimed this on radio—and I think this is an example of the fact that they are really quite shameless in that they do not check the facts about what they are saying; if it supports the argument then they will just put it out there anyway. We had the Assistant Treasurer on radio saying, ‘Well, in Perth today you will find that the price of fuel is on average less than in other capital cities.’ He was trying to make the point about how the FuelWatch scheme had apparently been successful in Western Australia but, sadly, his statement was completely and utterly false. On the day that he was speaking, if you were to actually go and check prices around the country, you would have found that the price per litre of fuel in Perth was more expensive than in every other mainland capital. This is extraordinary. I will just run through it: it was $1.40 per litre in Brisbane; $1.49 per litre in Melbourne; $1.50 per litre in Sydney; $1.51 per litre in Adelaide; and in Perth, on the day that the Assistant Treasurer was saying that it was cheaper than in any other part of the country, it was actually $1.55 per litre.

I think Australians deserve more than a government that is prepared to mislead them like that, and they deserve more than a government that is pretending to care about an issue whilst actually doing things that may make that issue worse. Apparently the Prime Minister—well, not apparently; it is actually a fact—believes that he has done all that he can do on these issues. Yesterday he was in this chamber saying, ‘Oh well, this might not work but, hey, at least we are having a go.’ I think the Australian people deserve a bit more than that.

I just want to dwell on this issue of petrol pricing in Western Australia because I think it is pretty important that these issues are illuminated. The member for Blaxland was here—I assume he just gets his speaking notes from the Assistant Treasurer’s office and he comes in and reads them out in the chamber—again misleading this House, saying that the RAC—the Royal Automobile Club of Western Australia—support Fuelwatch. They quite patently do not. Indeed, there was a front-page article in the West Australian just last week with the headline ‘FuelWatch is a dud, say RAC and bureaucrats’. This is hardly a glowing endorsement of FuelWatch, even though members opposite continually raise the case of the RAC supporting this scheme. What do they actually think about this scheme? I think it is very important that this go on the record, and I hope members do not keep repeating this falsehood. What they have actually said is that new research that they have conducted contradicts the ACCC and shows that FuelWatch has failed to make petrol cheaper in Perth since it started seven years ago. This was a wide-ranging study that the RAC conducted, and what they concluded was that there was little or no difference between prices in WA and those in other parts of the country.

It is not just the RAC, which is the motoring organisation in the state where this scheme has been running, which opposes this scheme; it is also the Motor Trades Association in Western Australia. The MTA have been very vocal in their opposition to this and have a very consistent position about these things. They believe this scheme will advantage the oil majors and it will disadvantage independent retailers. They believe that this idea of keeping big oil accountable will do the exact opposite. And we actually have evidence of that from some of the big retailers themselves. This is the ridiculous thing that we get from this government talking about big oil, because, according to Woolworths, a reasonable sized company, FuelWatch has delivered higher prices to Western Australian motorists compared with prices paid by their eastern states counterparts. Even they said that it lessened competition among service stations and that WA was their most profitable state.

So, instead of keeping prices under control, current petrol prices in Perth are often more expensive than those in any other mainland capital. RAC Corporate Communications Manager, Adrian Firth, is quoted in the West Australian article, which I referred to previously, as saying that their research shows that, despite all the rhetoric, there has been no direct financial benefit from the advent of FuelWatch. This is the organisation that members opposite keep quoting in support of their argument—and I hope that the member for Lindsay is currently rewriting these sections of his speech, because I am sure that he has the same speaking notes as the previous speaker. Please do not come into this chamber and keep repeating that falsehood. The RAC do not support this scheme. The RAC have actually said:

Seven years after the launch of FuelWatch, the RAC’s monitoring of fuel prices shows that there is little or no difference between prices in Melbourne, Sydney and Adelaide.

What a farce! Members opposite consistently use this organisation as the major motoring organisation in Western Australia which support their argument, when they clearly do not.

So what is Labor’s argument for bringing this ridiculous legislation before the House? I think we know their political motivation: they have raised the issue and now they need to be seen to be doing something about it. But why are they proceeding with it in the face of all the evidence, even evidence from their own Public Service? Let us look at what that Public Service had to say. The central economic departments were scathing of this particular proposal. The Department of Finance and Deregulation, the Department of the Prime Minister and Cabinet, the Department of Innovation, Industry, Science and Research, and the Department of Resources, Energy and Tourism all slammed this proposal. I note that the Minister for Finance and Deregulation also added the Treasury—I am not sure whether it was done inadvertently—as being one of the departments which opposed this particular measure. He mentioned that on the Insiders program on the ABC on Sunday. So maybe we can also include Treasury in these objections from the central economic departments to this scheme.

These leaked cabinet documents really express the truth about what this scheme might do for petrol prices in Australia. These four departments warned cabinet that it was possible that the scheme could result in higher petrol prices. They also expressed concern about the increased financial cost it would impose on service stations, particularly small independent operators. Again, the government keeps claiming that this scheme will not increase costs for small business and, for that matter, large business. It keeps claiming that when it is patently not true and it is patently exposed within their own cabinet documents. The leaked documents show that the central departments did not support this scheme. One reason was that it would impose additional costs on retailers, costs which ultimately, of course, would be passed on to consumers. Let us look at what the Prime Minister’s own department had to say. It noted:

… that, while the proposed national Fuelwatch scheme will likely succeed in removing intra-day price volatility in the retail petrol market, which is a concern to many consumers, the impact of the proposed scheme on the overall pump price is not clear.

Econometric modelling undertaken by the ACCC is, quite frankly, inconclusive with respect to what it believes this will do to the overall pump price, but it indicates that a small overall price increase cannot be ruled out. Within these leaked cabinet documents, we also see that the proposed scheme will result in an increased compliance burden in the economy, with Treasury estimates indicating that it will result in ongoing increased operating costs of around $4,000 per annum per business. Yet we have members of the government having the effrontery to come in here and consistently claim that that is not true. These leaked cabinet documents also express concern that the scheme:

… will reduce competition and market flexibility, increase compliance costs and has more potential to increase prices.

According to the documents, the finance department ‘does not consider the proposed Fuelwatch scheme is good practice regulation’. And further:

This proposal will increase the regulatory burden, with inconclusive, unquantified and negative results …

Finance considers that the introduction of a price commitment rule may result in higher average petrol prices over time as the option may lead to the creation of a de facto price floor …

The documents also state:

The proposed Fuelwatch scheme would increase the regulatory burden to business in the magnitude of $20.7 million in the first year and $18.7 million per annum thereafter. The impact is likely to fall disproportionately on independent retailers.

The Department of Innovation, Industry, Science and Research, one of the other central economic departments, is concerned about the anticompetitive effects of the proposed Fuelwatch scheme, which prevents businesses from reacting to market forces to adjust their prices for a 24-hour period. Let’s just have a look at that concept. If you are a small, independent retailer, such as exists in my electorate of Stirling, your outlet may be in a small suburban shopping centre. Along all the major roads of course will be all the oil majors. They have the ability to get market intelligence faster than you have. Small retailers in my electorate—and I have used this example before, because I think it exposes this scheme for the farce that it is—can be fined if they reduce their prices to compete. That is what FuelWatch gives us in Western Australia and that is the scheme which the Labor Party wants to take nationally. These leaked cabinet documents reveal that the government ignored the advice that a national Fuelwatch scheme not only will result in lower prices but may actually drive up petrol prices.

The Assistant Treasurer introduced these bills last Thursday evening, at about seven o’clock I think, and we are debating them here today within a very short space of time, as seems to be the operating procedure for this government. These bills have all the hallmarks of being a rushed job. The explanatory memorandum to the bill states under the heading ‘Summary of regulation impact statement’ that the estimated compliance cost for business is zero—something that completely contradicts the regulation impact statement tabled in this place, which said that there is a substantial compliance cost for every single petrol retailer. How can the statement that the compliance cost will be zero be reconciled with what this parliament already knows? What this goes to is the pattern of deception around this program. Members opposite must be getting the idea that this is a dud program by now, yet they come in here and defend it with increasingly spurious assertions, many of which turn out to be completely false.

With this legislation it is very clear that we have a government in trouble. We have a government that have raised issues that they have no idea how to address, and they must then go in search of programs they can point to and say, ‘Look, we are actually doing something about this issue.’ Fuelwatch is, of course, the greatest example. I think it bodes very ill for what they might do about some of the other issues they have raised, such as grocery prices. What we see after six months is that the policy-making processes of this government are a complete and utter shambles. This is, of course, the first look we have had into how these policy-making processes work. We have had hints, but these leaked cabinet documents really show us what is going on behind the scenes. We see it in the House, too, where we have quite a chaotic schedule of bills which can seem to change as the day goes on. We see it in the House when the government come in here and ram legislation through in a way that was unthinkable under previous governments.

We also see a government that consistently prize one thing, and that is spin. They prize spin and style over everything else. Substance does not get a look in with this government. It is sad that they are basing the way they operate as the Commonwealth government on state administrations. They are basing it on the Beattie administration, on the Carr and Iemma administrations, on the Bracks administration and on the Carpenter administration—governments that have delivered so little in the states in which they have governed for quite some time but that always prioritise responding to the 24-hour media cycle and always prioritise spin. When serious issues are raised they just find something to do—a gimmick, a stunt—to say, ‘Yes, we know that is a serious issue but look, we are addressing it.’ This is what we are now seeing with the federal government. The Australian people will have this revealed to them over the course of the next few years.

What the Australian people deserve is a government that does something to address the issues that it promised it would address prior to the last election campaign. We have a Prime Minister who comes in here and argues consistently that the government is concerned about these issues yet says he has no real scheme to deal with them. I think, and the opposition thinks, that Australian families deserve better. There is nothing wrong with the wider spread of consumer information that is contained in this bill—nobody would seriously argue about that—but there is something wrong with the price-fixing considerations within this bill. They do not do the job that they are supposed to. In fact, it is the reverse: these price-fixing mechanisms may actually result in people paying more per litre at the bowser in Australia. This country deserves better than these sorts of stunts, it deserves better than what we are getting from this government, it deserves better than having a stuntman as its Prime Minister. I support the amendment moved by the shadow minister for finance. It is an amendment that keeps the sensible parts of the bill and jettisons the nonsense parts. It is worthy of consideration and it has my wholehearted support.

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