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

My question is directed to the Prime Minister. I refer the Prime Minister to his refusal on 8 June to give the ACCC further powers to scrutinise petrol prices. Why won’t the government get serious and act on the crippling and unexplained spikes in petrol prices, particularly on long weekends, by writing to the ACCC chairman to initiate formal monitoring of petrol prices under part VIIA section 95G of the Trade Practices Act? Why does the Prime Minister keep telling us that the ACCC has ‘all the power in the world’ when it is obvious to everyone that it does not?

John Howard (Bennelong, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

I say in reply to the member for Bendigo: it is not correct to say that we do not have monitoring. We do have monitoring and there was, in fact, monitoring that was carried out in the lead-up to the Queen’s Birthday weekend. That monitoring produced the outcome that was consistent with monitoring of similar events on other occasions, and that is that the discounting of the retail price which takes place during the week because of the higher volume demands at the weekend disappears. That results in the alteration in the price.

I know, as the member for Bendigo knows and I think everybody in this country knows, that the price of petrol is painfully high. It is, however, of no help to sensible debate and no help to the hard-pressed Australian motorist for false claims to be made and false dawns to be offered in relation to how you can cut the price. It is due overwhelmingly to the high price of crude oil. If there had been a solution, that solution would have been lighted upon and implemented with enormous enthusiasm long before now. But I can assure the member for Bendigo that, if there are other productive things that can be done in relation to price monitoring, the government stands ready to do so.

Jason Wood (La Trobe, Liberal Party) Share this | Link to this | Hansard source

My question is also to the Prime Minister. Can the Prime Minister inform the House of the government’s actions affecting GST and reductions in fuel excise?

John Howard (Bennelong, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

I thank the member for La Trobe for his very important question. It is a very relevant question in the light of an article that appeared on the front page of the Melbourne Herald Sun today, apparently based on a claim made by the member for Wills, which in turn was in part informed by some research carried out by the Parliamentary Library. In essence, what was claimed in the article was that, since the introduction of the GST, some $10 billion in GST revenue has been collected yet only about $4.6 billion has been forgone in excise; whereas the government claimed in 2001 that, when introducing the GST, it would adjust the excise so as to ensure that there was no additional revenue collected.

The claim being made is false. It is false because, in the calculations that have been made, no allowance has been made for the two discretionary reductions in fuel excise that were made in 2000 and 2001. There was a reduction in excise of 6.7c per litre on the introduction of the GST and there was a further reduction of 1.5c in March 2001, which produces a combined reduction of 8.2c a litre. In addition to that, the abolition of fuel excise indexation in March 2001 has resulted in cumulative savings in relation to excise of something in the order of $1.4 billion.

So when you carry all of that together, when you allow for the two discretionary reductions and the removal of the excise, you have a situation where the excise forgone is about $11.5 billion. The estimate in the Herald article of GST is $10 billion. So, on the basis of that, there has been no overcollection, and in fact the government has kept faith with its commitment that the introduction of the GST would not result in an increase in the overall tax collected on petrol.

I end my answer by making, in any event, the observation that if people, including the member for Wills, believe that too much GST is being collected from petrol, they might like to drop down to Treasury Place—not the Commonwealth end of Treasury Place but the Victorian government end of Treasury Place—and have a word with Mr Bracks about coughing up some of that $1.5 billion extra that the states appear to have got.