Anthony Byrne (Holt, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That this House:

(1)

notes the continuing and alarmingly high fuel prices in the South Eastern suburbs of Melbourne and across Australia;

(2)

recognises the enormous impact of these high fuel prices for families and their budgets and local businesses in the region;

(3)

acknowledges residents concerns about price gouging within the petroleum refining and distribution industry and their desire for some action to be taken by the Howard Government to reduce fuel prices; and

(4)

asks that, at the very least, the Treasurer take action to direct the Australian Competition and Consumer Commission to formally monitor fuel prices under Part VIIA of the Trade Practices Act 1974.

In speaking to this motion, I am relaying the concerns of many of my constituents whom I have spoken to since the sustained rise in petrol prices. It is ironic that, when I raised a motion of a similar nature in this House in November, one of the contributors from the government side basically said that I was overstating the position and that what would happen in reality would be that, due to market forces, the price of petrol would come down to about $1 a litre.

Gavan O'Connor (Corio, Australian Labor Party, Shadow Minister for Agriculture and Fisheries) Share this | Link to this | Hansard source

Oh!

Anthony Byrne (Holt, Australian Labor Party) Share this | Link to this | Hansard source

The last time I checked, Member for Corio, which was when I took a drive around my electorate yesterday, the price of petrol ranged, as you would know, from $1.33 in Cranbourne to $1.30 in Narre Warren. So much for petrol prices coming down! That comment signalled the complacency of the Howard government over petrol prices and their effects on the community—and my electorate knows more than most the effects of petrol prices on the community. Remember that my electorate has the highest rate of mortgages in Australia, the highest rate of couples with dependent children in Australia and one of the highest rates of motor car usage in Australia. These are working people who have been affected by petrol price increases. These are the ones who have generated our current economic prosperity but are now faced with huge petrol costs with no relief in sight.

Given the large number of families in the area of my electorate, these people need a car—and to pay a lot more for petrol—to take their kids to school, to child care, to sport or to the doctor. Because many of my constituents work outside the area, these people need to drive to work, particularly the large number of tradespeople who live in my electorate. The government has given them no relief from petrol prices, but I will tell you what it has given them: the Work Choices legislation which, as we have seen, is ripping away job security and, even worse—particularly for the tradespeople in my electorate—the government’s intention to employ cheap foreign labour in many of the trades and areas that my constituents work in.

The sustained high price of petrol is having devastating consequences and effects in my area. Parents are being forced to tighten their belts. I hear so many stories of financial pressure and of the way that people are starting to worry about servicing their mortgages. Take, for example, the stories from the Casey North information and support service, which provides support and information services to suburbs in my electorate like Narre Warren, Narre Warren North, Narre Warren South, Berwick and Hallam. In the financial year of 2004-05, Casey North provided $1,500 in petrol vouchers. With the massive rise in petrol prices and the increasing demand for these vouchers, Casey North has since purchased $3,500 worth of vouchers, an increase of 133 per cent—and it still cannot keep up with the demand. These are not voucher requests from the poor people in these areas; these requests are from the working families in these areas. As a consequence of this demand, Casey North will only provide vouchers in the most extreme set of circumstances, such as medical treatment or picking up kids from school, and people will have to be turned away.

This is the tip of the iceberg. Look at the basic hits that the residents of my area have copped. In May there was an interest rate rise that added between $33 and $37 per month to the average mortgage of families in Narre Warren and Cranbourne. If you compare the price of fuel in early 2005 to that now, families in these areas are paying up to $52 a month for petrol per car. Most of the families in my electorate have two cars, so that is an additional $104 per month. The government has made much of its tax cuts in my area. Many in my electorate have an income of between $40,000 and $60,000 per annum. The government’s tax cuts in the budget work out to be $ 9.80 per week, so roughly $40 per month. That is not even covering the increase in petrol costs. So families in my area are seriously worried.

Yet while they are suffering, oil companies are making gigantic profits. For example, the profits of companies like Exxon Mobil and the other companies which produce much of the petrol that we consume are expected to exceed $134 billion this year. In fact, the chairman of Exxon Mobil, Lee Raymond, has an income of $200,000 per day and a retirement package of $400 million. When the price of petrol hit $US1.20 a litre in America, George Bush hit the panic button and demanded that the equivalent of the Australian Competition and Consumer Commission investigate price gouging and price profiteering. But what has happened in this country? Absolutely nothing, even though the government has the capacity to intervene under part 7A of the Trade Practices Act. The government has sat on its hands and done absolutely nothing, unlike George Bush. It is a disgrace and it is a betrayal of the families in my area. (Time expired)

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

Is the motion seconded?

Martin Ferguson (Batman, Australian Labor Party, Shadow Minister for Primary Industries, Resources, Forestry and Tourism) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

Cameron Thompson (Blair, Liberal Party) Share this | Link to this | Hansard source

It is a pleasure to speak on this motion today. Looking at the words put forward by the member for Holt, I see the point he is putting forward and the outcome he is seeking. He asks that:

... at the very least, the Treasurer take action to direct the Australian Competition and Consumer Commission to formally monitor fuel prices ...

If that is the least that he seeks, I wonder what could we do. If he had wanted the most that he could seek, perhaps it might have been to have an even bigger study and maybe to get a group of organisations to study fuel prices. Studying fuel prices is not going to deliver a better outcome for motorists. I would like to look at some of the different points associated with this issue. I would like to suggest something which members opposite might like to consider as an alternative and which, perhaps, could give motorists something positive to think about.

I would like to talk a bit about excise and that part of the taxes on fuel that goes to the states. The Commonwealth applies an excise rate of about 38c a litre on fuel. That is an interesting position, because the Commonwealth under the coalition has capped the excise rate at 38c a litre. It is interesting to note that, when the new tax system came in on 1 July 2000, under the imposition of the goods and services tax there were reductions in rates of excise at that time. Now that we have the GST in place and the capping imposed by the government, we have had real reductions in the cost of that part of fuel that is levied by the Commonwealth as part of excise. It is interesting to note in comparison that, during the time the Labor Party was in power, the rates of excise on petrol went from 30.75c a litre back in 1994—and that is as far back as I can go—to as high as 34.5c a litre, as at 1 August 1996. So, during its time in office, the party that the members opposite represent continually ramped up excise and sought to benefit from it.

I would like to raise the fact that, quite some time prior to the introduction of the new tax system, the Commonwealth had to take over the petrol franchise fees, which were being levied by the states on fuel as a way of covering up all the black holes they had in their budgets. They imposed petrol franchise fees in order to keep their budgets as healthy as they possibly could. Those petrol franchise fees have now been rolled into the GST. So an amount of about 8.3c litre in the GST component is the old petrol franchise fee. What I would like to put to the House is that each of the states is now receiving revenue returns from the GST far and above the amounts promised to them at the time we introduced the GST. The states are receiving a higher amount of money and they are above the amounts that were guaranteed to them.

Given that there are serious concerns in the community, as the member for Holt pointed out, I think we could look to recover the old petrol franchise fee. We could take it from state revenue, not from the GST money but from other grants that are applied to them by the Commonwealth, and we could recover up to 8.1c litre. If members opposite want to look at a way of addressing this issue they could get real and look at the petrol franchise fee money going to the states, which is being used to prop up their budgets and which does not provide a beneficial outcome for motorists. I think this is an option that should be pursued by members. We should look at reducing the amounts of grants to the states, particularly those states that have not been honouring their GST obligations, those states that have not been making all the tax cuts that they promised they would. This is a way to use a lever on those states to ensure a bit of justice for motorists. The petrol franchise fee is something that members opposite are not speaking about because it directly aids those Labor state governments. (Time expired)

Martin Ferguson (Batman, Australian Labor Party, Shadow Minister for Primary Industries, Resources, Forestry and Tourism) Share this | Link to this | Hansard source

As my colleague the member for Holt has highlighted, Australian families are feeling the pinch of record high petrol prices. But I intend raising issues in this debate that I thought the member for Blair should have raised, given the fact that he comes from the state of Queensland.

Unlike the Howard government, the federal Labor Party believes there is plenty that can be done about petrol prices. The most important thing, and it is interesting that the member for Blair did not touch on it, is the capacity to do something about security of supply and the challenges that confront Australia in the 21st century. That means growing the ethanol and biofuels markets and doing more to develop Australia’s gas and coal to make liquid transport fuels. This is about producing more of our own transport fuels, like ethanol or diesel made out of natural gas or coal.

It will not lower prices at the pump but it will make all of us better off in many other ways. It will mean more jobs, higher exports, more tax revenue from resource development and more money available for income tax relief, roads, better public transport, schools and hospitals. It is only through our domestic supply sources that we will be able to address fuel supply emergencies in the future if the Middle East supply is interrupted and scarcity induces price blow-outs that would threaten our industries, our way of life and our job and export opportunities. It is estimated that our current oil reserves will last only about 40 more years and, while Australia’s prospectivity is lower than that in many other countries, exploration in our remaining frontier areas should be a national priority of the Australian government.

But we need to look further than oil exploration for the total solution, because that is only one part of the challenge. For the best part of the last decade Australia consumed oil three times faster than it added to its reserves, so this is a huge national problem. Conversely, for the last 20 years, Australia has been finding gas faster than it is consuming and exporting it. I believe we could turn that natural gas into products like clean synthetic crude oil and diesel and jet fuel, which are all in demand in Australia. Australia’s competitors in the gas industry are way ahead of us in this area, particularly in the Middle East, where countries such as Qatar already have major gas-to-liquid projects, making ultra-clean diesel for the global market. Why can’t Australia do it?

The same applies to the coal industry. Labor’s climate change blueprint identified clean coal technology as a vital part of the climate change solution and, of course, coal-to-liquids technology is central to the economics and efficiency of a cleaner coal industry.

I point out to the House that it is now four years since CSIRO proposed a strategy for Australia’s transport future, a strategy that recognised gas to liquids and coal to liquids as the key to the future. Four years on, the Howard government yet again has done nothing about securing Australia’s future in the energy debate. It is about transport energy for a country which is dependent on the transport industry. For at least four years CSIRO has known that Australia needs to take action, but the Howard government has done nothing.

Further, it is five years since Senator Minchin, then minister for resources, appointed a task force to investigate the feasibility and benefits of establishing a gas-to-liquids industry in Australia. The task force highlighted the potential significance of a gas-to-liquids industry for Australia’s economy, saying it could underwrite offshore gas supply infrastructure to bring forward the possibility of major new domestic gas pipelines to connect the national market, increase domestic gas competition and energise gas exploration—all key components in Australia’s future—not to mention the most pressing of problems: our future transport fuel security. It is not about self-sufficiency; it is about security of supply. But, five years later, the government is still sitting on its hands hoping the petrol price problem will soon disappear.

I commend the member for Holt for bringing this motion forward for debate in the House. We are all concerned about high petrol prices, but the debate is bigger than the questions of excise and global demand. The debate is about our national government seizing opportunities and working out how we encourage industry by putting in place an investment regime which will force downstream processing in Australia. It is about gas to liquids, not just the export of LNG to China. It is about processing in Australia and creating further jobs. I say to the government: front up to the challenges and stop running away from your responsibilities. (Time expired)

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

I rise to contribute to the debate on petrol prices. I had hoped to hear from the members who spoke before me some policy on how they are going to reduce the price of petrol. The inference in the motion is that there is somehow a magic way in which the government can reduce the price of fuel for the general public. At this stage, I have heard nothing from the member for Holt. We at least heard a bit of policy from the member for Batman, but we have heard nothing about the real issues. It is fairly clear to anyone who knows anything about this that it is all about supply and demand. At present, supply and demand is so tight that any disturbance on the world scene anywhere near an oil producing nation increases the fluctuations in price. Of course that hurts the travelling public and the budgets of Australians; there is no argument about that. But, if you are honest and have a look at prices around the world, you will see that Australia still has the fourth cheapest petrol in the world and the sixth cheapest diesel in the world. We are not up there with the extremely high price countries. If you lived in Argentina, for example, you might have something to complain about, because they certainly have a high price for fuel over there—and very low per capita income. Australia is certainly not up there.

The member for Batman seems to think the magic bullet is to suddenly jump into alternative fuels. Of course we are interested in alternative fuels. Because I represent a rural electorate, I am very interested in alternative fuels. But you cannot artificially create a market. I think the market is adapting. We are seeing more and more of these fuels being produced, more ethanol plants are being built around Australia and, as the market works, we will start to see alternative fuels come into play. I am sure that the oil producing nations of the world are quite concerned about this. One of the real issues is the refining capacity in the world at the present time, and efforts are being made to try and overcome the problems with refining capacity. The oil producing nations of this world are not stupid. They know that, if alternative fuels start to get into the marketplace, they will sell less oil. So they will be looking very closely at how they can keep balance in the price. They are well aware of the effect of the oil price on international markets and international economies. I am sure that, given a bit of time—and it might take a couple of years to do it—we will see extra refining capacity in the world, and I think we will probably see a bit more balance in oil prices.

Having said that, the opposition give the government no credit for what it has already done. I think it was in 1991 that fuel excise was capped. At present, fuel excise is 38.3c. If fuel excise had not been capped, with natural inflation it would now be somewhere around 60c a litre. That would have been a huge impost over and above the already high price of fuel. I have not heard any policy from members of the opposition as to what they might do to reduce the price of fuel. If they suggest that, in government, they are going to take off some of the excise, what government programs are they going to cut? Excise is collected by the government to pay for pensions, health and education, which are very important areas of government. What programs are they going to cut if they are going to cut the tax intake? It is very important to have a look at all these things. If you are going to raise this in a debate, you need to look closely at what the effects are going to be, one side or the other, and not just get up in a political stunt and talk about the price of fuel. You need to look very closely at the cause and effect—what is going to happen if you do these types of things. I do not think the opposition have really thought this through.

The government is well aware of the problems people are presently having in coping with the increased price of fuel. We have had 44 inquiries into fuel prices since 1983. I used to be in the New South Wales government and I can tell you that we had several inquiries there into the price of fuel. If the member for Holt is concerned about this, why doesn’t he write a letter to the ACCC? Why doesn’t he refer it to the ACCC to see whether they will investigate it? He does not have to wait for the Treasurer. Instead of coming in here with a political stunt, he can write to the ACCC and ask them to investigate whether the oil companies are engaged in price gouging and not handing on the true costs to the community. Let us do the hard work and see what we can do. (Time expired)

Ms Anna Burke (Chisholm, Australian Labor Party) Share this | Link to this | Hansard source

I also support the motion on petrol prices before the House. I am pleased to see that the next government member speaking in the debate, the member for Deakin, almost comes from the south-eastern suburbs of Melbourne—at least someone in the ballpark of Melbourne will talk about petrol prices; his two colleagues who spoke earlier represent regional Queensland. It is quite nice that one Liberal Party member representing the burbs in the Melbourne will also speak about this issue.

The Howard government has failed to keep petrol prices on hold and, as a result, Melbourne families are struggling to make ends meet. Only yesterday the Melbourne Herald Sun headline screamed at us ‘How higher petrol prices hurt’. A snippet from that opinion piece, which touched on the problems of various motorists, was very interesting. It read:

A 25 per cent jump in the cost of running her car in the past year slugged pizza delivery driver Charlyn Winslow. ‘It used to cost about $28 to fill my car. Now it’s at least $35 and you get fewer trips. Overall, I’m earning less,’ she says. The Port Melbourne pizza shop owner for whom she drives has bumped his delivery charge to $1.50.

Here a young person—a university student, I suspect, who is probably earning her way through uni by delivering pizzas—is copping the petrol price increase with no additional remuneration. The extreme industrial relations legislation that is now in effect, as the member for Holt mentioned, will probably impact her earning ability even more dramatically.

While regional and rural Australians are suffering because their car journeys are usually so lengthy, so too are Melbourne families, who rely heavily on the many short trips they have to make each day. Families are paying record petrol prices. Since the 2004 federal election, the extra cost of filling the tank each week has risen to $84 per month, which is a lot of money for families on fixed incomes to find. As our shadow Treasurer recently pointed out, petrol prices for the average Australian family have skyrocketed by over $400 over the last two years. On top of the recent interest rate rise, families are really feeling the pinch.

While some people are opting to use public transport or ride a bike, this is not feasible for a single working mother in Chadstone who has to drop her toddler off at child care, drop her children off at school, go to work and then pick them all up and shop for groceries at the end of the day—along with all the other chores she has to do on the way home. On average, Victorians drive 15,000 kilometres a year, using around 1,500 litres of petrol. The helpful RACV website clearly states:

Stop/start driving is much less efficient and more polluting than driving at a constant speed. In comparison, free flowing driving, such as uncongested country or freeway travel, uses the least amount of fuel. If possible, organise trips in advance to avoid congested areas and peak-hour traffic.

That would be lovely, but when you are live the suburbs of Melbourne it is virtually impossible. You are constantly stop-start driving. You are stopping and starting at traffic lights and in the traffic, but, more importantly, you are stopping and starting for the 500 different trips you have to do just to get through your day.

Not just families are feeling the pinch. Many small businesses are experiencing severe drops in sales—couriers, independent petrol station owners, delivery services and so on. Indeed, the highest number of people in history have been driving off without paying for their petrol. A lot of people are actually filling up and taking off without paying their petrol bill because they literally cannot afford to.

When Labor was last in government petrol prices were at 70c a litre. Today they have doubled. Those opposite are always citing what we did, but they have doubled petrol prices. The fact is that the Howard government has failed to keep petrol prices low and they are now out of control. The government has failed to address Australia’s dependence on foreign gas, it has failed to encourage our biofuels industry and it has failed to give the ACCC the power to formally monitor petrol prices. We are not talking about another inquiry; we are talking about the ACCC monitoring petrol prices.

While the President of the United States, George Bush, is holding an inquiry into the possible practice of petrol price gouging in the US, his good friend John Howard, our Prime Minister, who is normally more than happy to follow in the President’s footsteps, refuses to allow an ACCC inquiry into alleged price gouging in Australia. This is another broken promise from the Prime Minister. On 7 April, journalist Neil Mitchell asked the Prime Minister whether he would formally direct the ACCC to monitor fuel prices under part 7A of the Trade Practices Act. The Prime Minister responded:

Yes I will. I will ask them to have a look at it...

It must have been a ‘non-core’ promise because, within a week, he had reneged on his word. Not that his word has meant anything for some time.

Phillip Barresi (Deakin, Liberal Party) Share this | Link to this | Hansard source

I am pleased to be able to speak on this motion on petrol prices as it gives me the opportunity to set some facts straight in this debate and to identify the long-term solutions available to us to better manage the cost of transport fuels, some of which were identified by the member for Batman in his contribution. There is no doubt that petrol prices are high and, as members of parliament, we are aware of the difficulty that petrol prices cause for home budgets and in the running of small businesses. If we are not aware, we should be getting out more often and engaging with our constituents or family members and friends, who are never backward in telling it as it is.

It does concern me to see petrol prices at their current high levels, with expectations that they will go even higher. In saying this, it is also important for us to understand the real cause of these increases, not simply respond to the political rhetoric of those who look to the short-term fix for every problem we confront. Implicit in the motion moved by the member for Holt is a belief that the Howard government is responsible for the high petrol prices facing Australian consumers. This is simply not the case. The real reason for the high cost of fuel facing Australian motorists has been clearly stated by the member for Holt’s Labor colleague the member for Rankin, who wrote in the Canberra Times last year:

Australia’s record petrol prices have one cause and one cause only—high world oil prices. The OPEC oil-producing countries are pumping oil out of the ground as fast as they can, but not as fast as the world wants to use it. China is burning oil products for its industrialisation as if there is no tomorrow.

Unfortunately, there are high petrol prices all around the world. The fact that we are ranked fourth lowest for petrol and sixth lowest for diesel among the OECD nations is no cause for celebration. However, it does place into perspective the fact that, as a government, we do not control that price; the price is determined by the cost of crude oil on the world market.

Australia is not self-sufficient in oil; we are now importing about two-thirds of our oil and we are at the mercy of world oil prices. In fact, the federal government is the only government in Australia that has taken action to reduce the cost of petrol at the bowser—we reduced the excise on petrol from 44c to 38c a litre and, furthermore, capped the excise at that level. Since that cap, the price of petrol has risen from 80c to $1.40 a litre. What is often not mentioned is that the 38c excise does not increase as prices increase. I acknowledge that the GST collected on behalf of the states also forms part of that cost, and that component does increase with petrol price rises. If criticism needs to be made, then let it be levelled at the state premiers.

David Hawker (Speaker) Share this | Link to this | Hansard source

Order! It being 1.45 pm, the debate is interrupted in accordance with standing order 34. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting. The honourable member for Deakin will have leave to continue his remarks when the debate is resumed.