Steve Gibbons (Bendigo, Australian Labor Party) Share this | Hansard source

I rise to support the Rudd government’s National Fuelwatch (Empowering Consumers) Bill 2008 and the National Fuelwatch (Empowering Consumers) (Consequential Amendments) Bill 2008. As this is a complex issue, it is appropriate that we have a brief look at some recent history around the problems of fuel pricing in Australia. In its first term of office, the Howard government abolished the Prices Surveillance Authority, whose role was to monitor excessive price increases and prosecute individuals and organisations that indulged in price-fixing activities. Then, after ignoring the results of this disastrous decision and under extreme pressure, the Howard government commissioned yet another investigation into petrol prices. The Howard government then told us that the ACCC would be the appropriate body to ensure we paid a fair price for our fuel, but what they did not do was provide the ACCC with the powers it needed to monitor, investigate and prosecute any instances of collusion or any other anticompetitive behaviour by oil companies, distributors and retailers.

It was the election of the Rudd Labor government that provided the ACCC with these powers through the establishment of the petrol pricing commissioner within the ACCC’s framework. This delivered on Labor’s election commitment to ensure that Australian motorists would not pay one cent more for fuel than they needed to. It is a simple proposition but one that the opposition chooses to ignore by constantly verballing the Labor government by stating incorrectly that Labor promised to reduce the price of fuel. Labor made no such promise. Verballing is a constant habit of those opposite, probably because of the influence of failed copper and member for Dickson, who is the opposition’s spokesman for finance, competition policy and deregulation.

There has been evidence to suggest that anticompetitive behaviour had flourished under the almost 12 years of the Howard government, which artificially inflated the already high costs of fuelling our vehicles. Labor’s policy initiative will achieve precisely what we intended it to achieve, which is to place downward pressure on fuel prices. At no stage during our time in opposition did we ever promise to reduce the price of fuel. In fact, to say so would be to continue to perpetrate blatant untruths.

Motorists throughout Australia, and particularly in regional Australia, do not need the opposition to tell them that they are being hammered in the prices they pay for fuel—that is, petrol, LPG and diesel. As I outlined in a submission to the inquiry by the Senate Standing Committee on Economics into petrol pricing in Australia in August 2006, the average retail price for petrol in my electorate of Bendigo rose from 89c per litre in September 2003 to $1.45 per litre in June 2006. That was a massive rise of 62.9 per cent. On the June 2007 Queen’s Birthday long weekend the price was around $1.39 per litre. These dramatic increases happened on John Howard’s watch.

Finally, after a decade as Treasurer, the member for Higgins for the first time apparently instructed the Australian Competition and Consumer Commission, the ACCC, to look at anomalies between the price of benchmark Singapore oil and the price motorists were paying to fill their vehicles—in other words: look but don’t touch, in line with existing coalition policy of doing nothing to relieve the pressure on Australian motorists. The then Treasurer was stung into appearing to take action, because Labor, as always, had set the agenda on the important policy areas that affect most Australians. As I said before, it was the election of the Labor government that finally gave the ACCC the powers to effectively monitor, investigate and prosecute any instances of collusion or other anticompetitive behaviour.

The Rudd Labor government has done more to introduce transparency into the petrol market in Australia in our first six months than the previous coalition government managed to do in 12 years. Labor promised to have a full-time cop on the beat, with full monitoring powers, and we have delivered. The government appointed Mr Pat Walker as the nation’s first Petrol Commissioner and he began work on the 31 March this year. We have given the Petrol Commissioner full powers under the Trade Practices Act to formally monitor unleaded petrol prices to keep petrol companies in check. The government has asked the new Petrol Commissioner to particularly focus on LPG and diesel prices and, if the Petrol Commissioner asks for further powers, the government will look sympathetically at any such request.

Debate interrupted; adjournment proposed and negatived.

The National Fuelwatch Scheme will help motorists buy the cheapest petrol at the cheapest petrol stations at the cheapest times. I concede that motorists in smaller rural communities with only a small number of fuel retailers will not benefit anywhere near the extent that their city cousins will under the government’s proposal. I have long argued for a review of the dreaded tax on a tax that resulted from the former Howard government’s introduction of levying the GST on the pump price of petrol, which means that motorists are paying the GST on top of and included in the excise tax of 38c per litre. This means paying a tax on a tax, something that the previous government said would not happen. I welcome the announcement of a major review of our tax system announced by the Prime Minister that will include reviewing the current tax regime on fuel prices throughout Australia, including the current tax on a tax calculated at the fuel pump.

Under the Fuelwatch scheme, petrol stations in metropolitan and major regional centres will be required to: notify the ACCC of their next day’s prices by 2 pm the day before; maintain this advised price for a 24-hour period; and apply the scheme to unleaded petrol, premium unleaded petrol, LPG, diesel, 98 octane fuel and biodiesel blends. The petrol price information collected from these petrol stations will be made available to consumers through: an email and SMS alert service informing subscribed consumers of details of the cheapest fuel in their area; a national toll-free number where motorists can locate the cheapest petrol in the area as they look to purchase fuel; and a national Fuelwatch website with station-by-station, day-by-day and suburb-by-suburb petrol price information.

Analysis undertaken by the ACCC last year concluded that under the Western Australian FuelWatch scheme the ‘relevant weekly average price margin was around 1.9 cpl less on average’. However, significant savings can be made when consumers choose to buy from the cheapest petrol station in their area, which could be 15 or 20 cents less per litre than the most expensive petrol on sale.

The Fuelwatch proposal seems to have everyone’s support except the current Liberal-National federal opposition, who are only interested in a cheap and very dubious political fix by wiping out completely the $22 billion dollar surplus provided in the May budget. Of the surplus, $8 billion will be eroded completely by the reduction in excise promised by the opposition and the rest will be eroded by their opposition to a number of other budget initiatives announced by Labor. So much for their dubious reputation of being, ‘fiscal geniuses’!

Some experts have indicated that the days of fuel prices at around $1 per litre may well have gone forever. The Australian editor of EnergyBulletin, Mr Adam Grubb, and former oil, coal and gas industry executive Mr Ian Dunlop were recently asked:

Have we entered a new energy era of high-priced oil?

And—

Are the days of $1/litre petrol gone for good?

Mr Grubb responded by saying:

We—

that is, Australia—

appear to have reached the peak in oil production. Global conventional oil production peaked in May 2005. Australia as a net importing nation is particularly vulnerable. Our internal oil production peaked in 2000,

Mr Ian Dunlop answered:

There is little doubt we are now in a new high-price energy era. On the demand side, the rapid growth of world population, all understandably aspiring to higher standards of living and consumption, is putting enormous strain on the global environment, to the point that we are probably reaching the ‘Limits to Growth’ forecast long ago.

They were also asked:

... as a policy response, how useful is lowering the fuel excise in combating the rising price of oil, both in the short and long term?

Mr Dunlop responded by saying:

It is completely futile. Prices are determined by the international market and there is nothing our government can do about that. Five cents per litre is irrelevant to a market where prices may fluctuate by several dollars.

Mr Grubb said:

Of course there may be some short term relief for struggling families. However we need to face the reality that oil is never going to be as cheap again as it was in the late eighties and nineties. As global oil exports continue to fall, prices will continue to rise in real terms. So we would merely be delaying the inevitable, while reducing government revenue which might be better spent helping those in need with more long term strategies and preparing the country for a leaner, and greener, future.

He went on to say:

Peak oil and climate change present us with an unprecedented challenge: how to begin consuming radically less fossil fuels while maintaining dignified lifestyles and essential services.

Clearly we need to look further than the current arrangements to secure an appropriate source of energy for our needs in the future. There are several options that would assist in this process but none are likely to provide any assistance over the short term.

Ethanol blended fuels are already available and considerable research is being done on growing oilseed crops that could be converted into fuel to drive our transport systems. Australia has estimated reserves of 150 trillion cubic feet of natural gas. If converted to transport fuel, it is enough to power all of Australia’s cars, buses and trucks for 50 years. Our natural gas is easily converted to liquid diesel that can be used without modification to existing engines. Australia currently exports up to 12 million tonnes of liquefied natural gas annually, with a 25-year supply contract recently signed with China—a couple of years ago now—and 15-year-plus supply contracts for 5 million to 8 million tonnes annually which have currently been negotiated or are under consideration with other potential export customers. While these exports are significant in terms of export revenue, they may not be in Australia’s long-term strategic best interests. We need to thoroughly examine the potential of converting some of our vast liquid natural gas resources into usable motor fuels, thereby reducing our dependency on oil from overseas. I commend the bill to the House.

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