Patrick Secker (Barker, Liberal Party) Share this | Link to this | Hansard source

Transport is very much an important part of any rural electorate. It is also very important for the cities, because of the transporting of goods all across this country. In my electorate of Barker, we have some very large transport firms—for example, K&S Corporation and MacKenzie Freight Lines at Mount Gambier. Interestingly enough, both of them are about halfway between Adelaide and Melbourne. The transport industry is what really makes Australia tick. Without an efficient transport industry, we would not be able to get goods from A to B. We would not be able to get goods from the farms or the factories to the manufacturers and then to the wholesalers and retailers. It really is an important part of the Australian economy.

Reflecting that the new government’s main mantra is reducing inflation, we have seen stunts and suggestions they are going to reduce their expenditure on airfares by $15 million and take away $100 million in drought relief. Things like the rural apprentices program and the FarmBis program are all being cut. Unfortunately, most of these programs have been cut in rural areas, which, as a representative of a rural area, I find very concerning. In the scheme of things, they really do not cost all that much. The government will probably have a budget of something like $260 billion this year, so a few million here or there out of $260 billion is not all that much.

The government suggest that they are going to bring in a budget with a surplus of at least 1.5 per cent of GDP, which is not all that amazing, really, when you consider that the budget surplus last year was 1.6 per cent and the year before was 1.5 per cent. So to reach their goal of a surplus of 1.5 per cent of GDP is really not all that extraordinary. This is all aiming to fix up the bogeyman of inflation. I do not have a problem with any government trying to ensure that we do not allow inflation to get out of control, but what we have here is legislation under which fuel prices and registration costs for transport will actually go up, increasing Australia’s inflation rate. The Interstate Road Transport Charge Amendment Bill 2008 and related legislation will have a greater inflationary effect than any other bills brought before this parliament by the new government. It has been suggested to me that milk will ‘only’ go up 17c a litre. I think 17c a litre is just indicative of all the other food and grocery prices that will go up as a result of this legislation.

For example, B-doubles with three axles will incur nearly $6,000 in extra registration costs. A firm like Scott’s Transport in Mount Gambier would have at least 600 trucks. Six hundred trucks at $6,000 per truck is more than $3½ million each year. Those costs have to be passed on to the people who need to transport goods from the farms to the factories and from the factories to the retailers and wholesalers all around Australia. It will be a government induced inflationary cost. It will be a direct cost to the CPI and, as a result, it will have a pretty serious effect on inflation in this country. It is amazing that this government has not done some modelling to work out the extra costs on inflation caused by not only the CPI increases in fuel excise on trucks but also by this proposed act and the road user charges. It will be much higher than CPI because they will be using a different indicator. This bill increases the registration charges for heavy vehicles registered under the Federal Interstate Registration Scheme, or FIRS. These are heavy vehicles which transport goods interstate. Another problem with this is that it will deter transport operators from moving up to the B-doubles and road trains because the semis and the single- or double-axle trucks, the ordinary heavy lorries—for want of a better term—will not have those increased charges. So there will be disincentive to go to the more efficient B-doubles and road trains.

Transport is a major industry in my electorate of Barker, and the road network is a challenge across the whole region. The city of Mount Gambier, in my electorate, is situated midway between Melbourne and Adelaide and is the centre for a large transport industry—in fact, it is a transport hub. It is the transport hub for Scott’s Transport, K&S Freighters, South West Freight—SWF—and other trucking companies. All of Mount Gambier’s industries rely heavily on incoming or outgoing freight services, not only for what would be termed ‘traditional agricultural production’ but also for the very large forestry industry, which relies heavily on the transport industry. There is no capacity to move over to rail because railway lines cannot be moved very easily to different areas, so the truck industry will always be needed to service that industry. Transport is very much an expanding industry elsewhere in Barker. There is lots of heavy transport because of the wine grape industry, the timber industry, the wine tourism industry and the fish industry. Several hundred kilometres of coastline act as a boundary to my electorate, and there is a very large rock lobster and fishing industry. Whilst the Howard government investment in AusLink and Roads to Recovery improved the conditions of major roads of the electorate, a few years ago a road study of the south-east of South Australia reported a real need for future planning for roads in that area. The issue is not only the major interstate routes, as heavy vehicles need roads to the blue gum plantations—which are about to come on line and are all over the place—and providing a temporary road network, and one that is capable of carrying heavy vehicles, will always be a challenge.

Tourism is also a major industry in the electorate so another challenge is the integration of heavy transport and tourism, with the need to share the road network and to make it safe. That goes to the need to build bypasses such as we have in Millicent, which the Howard government provided funding for; the Worrolong Road bypass in Mount Gambier; and the proposed Penola bypass, which will pass right through the greatest industry in the country—the wine industry—and one of the greatest wine areas, the Coonawarra. It is very important that we do not have transport traffic interfering with the tourism industry because of safety problems. Anyone who has been through the Coonawarra will know that the existing trucks and the tourists can sometimes be a dangerous mixture.

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

And is the mill is going to be built?

Patrick Secker (Barker, Liberal Party) Share this | Link to this | Hansard source

The member for Batman raises an interesting question about the mill being built. This is a Labor state government project and I support it being built, but we would have to wonder sometimes at the delays that have been happening as to whether it will occur.

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

Or the commitment of the proponent.

Patrick Secker (Barker, Liberal Party) Share this | Link to this | Hansard source

That may be so.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

The minister will cease interjecting.

Patrick Secker (Barker, Liberal Party) Share this | Link to this | Hansard source

The minister may be right but, in the end, I will not be deciding that, nor will the federal government be deciding that. Members of both sides would support that happening but whether or not it does will not be up to this government or this opposition; it will be up to the proponents and whether they come up with the money. So I certainly will not be blaming the federal government if it does fail.

Heavy transport, in particular, is an industry which has successfully reversed many of the negative perceptions the public had about it. It is certainly a much better and safer industry than it was perhaps 10 years ago. People often associated the industry with road deaths, long hours and drugs, but fortunately that image has changed. There has been over the past five years a decrease of about 22 per cent in fatal crashes for articulated trucks. While one death is always one too many, there has been a great rate of improvement in conjunction with high productivity in the industry, and we should always welcome that. If we had the same sort of reduction in road deaths in ordinary cars in Australia, I think we would all be very thankful for that. Heavy vehicles already pay registration charges, which vary by truck type and axle loads, and a diesel fuel excise.

Australia’s national freight load is expected to double by 2015. That is a very large increase. The road transport share of that compared with rail’s share is expected to increase. It follows then that it is important to keep the trucking sector cost efficient to support Australian industry’s international competitiveness. The Howard government went a long way to keeping the transport industry efficient and competitive by maintaining and extending the on-road diesel grant and keeping the indirect tax burden low on trucking. Under the Labor government, this is not so any more. The decision by state and federal transport ministers to increase truck charges is short-sighted and counterproductive. It does not make sense in the face of growing freight volumes. The Labor government will be solely responsible for the inevitable serious damage to Australia’s exports and the economy as a result of these ill-considered increased charges.

Trucking operators currently manage the freight task on very limited profit margins and are not in a position to absorb additional costs. This bill will put pressure on freight rates, which will now rise. When I was doing my economics degree, the transport industry was often cited as a near perfect industry in its pricing structures because of the competitiveness in the industry. Customers will feel the impact of increased freight charges and, accordingly, consumers will feel the impact through increased costs of consumables such as food products, white goods and building materials—everything that Australians use daily. Supermarkets will raise their prices and this will further contribute to inflation.

The reduction in charges for smaller trucks will mean that the general public will now have to share the road with one-third more trucks than is necessary. We have a state Labor government in South Australia which turns a blind eye to road infrastructure in rural and regional areas. The addition of more trucks will have an impact on the overall safety of road use in the future and will significantly increase carbon emissions. Again, this goes against the grain of what this government professes to be trying to reduce: carbon emissions and inflation. So these measures are counterproductive with regard to these two so-called goals of this new government.

The increased revenue will not be returned to road upgrades where it is collected and will simply disappear into the black hole of consolidated revenue, where it will be eventually lost through Labor’s economic mismanagement at a state government level. There is no hypothecation, there is no guarantee and there is no instruction to the state governments that they must spend that income on roads. Why can’t the federal government insist on state governments spending that increased income from these taxes and registration fees on roads where it is sorely needed? State and federal Labor ministers have ignored the views of the trucking industry and the impact of higher charges.

The Howard government’s introduction of the GST and removal of sales tax had a significant impact on reducing the indirect tax burden on the trucking industry. We all know that batteries and tyres became cheaper as a result of that tax system, and many other areas of the transport industry also became cheaper. Even when there were costs, they became an input tax credit. It was actually very good for the transport industry, given the lack of increases over recent years in transport industry charges. The only real increases have been due to world oil prices, which have increased the price of diesel.

It is very important that we have proper planning for our road needs. Developments like the Alice Springs to Darwin railway line, particularly the development from Alice Springs to Darwin—some 90 years late many South Australians would believe, but it came eventually; again, an initiative of the Howard government—took some pressure off roads, but road transport is a growing need. This bill makes no attempt to fairly attribute road costs. In addition to freight services, road networks provide local access as well as significant services for passenger transport.

In a true user-pays system, road costs could reasonably be attributed to home and business owners. Some costs of road infrastructure also can be attributed to passenger vehicles and, I agree, to some trucks, and some costs inevitably are common to all users. What does not make economic sense is to attribute the need for road capital spending only to heavy vehicles, when there is no viable alternative means of transport. Heavy vehicles already pay their share of road spending through registration fees and a net fuel charge. The trucking industry believe in paying their fair share and do not shrink from the principle that the vehicles should pay their fair share of road construction costs as well as for the damage that they do to the road network. But the industry should not be loaded with more than its fair share. The increase in the road user charge does not ensure parity of road use with fair charges and will have a major impact on a vehicle’s operating costs. Registration charge increases, coupled with an increase in the road user charge, will impose heavy costs on the trucking industry, and these costs will have to be passed on to Australia’s dispersed communities and trade competing industries.

In January of this year, independently verified analysis undertaken by the Australian Trucking Association showed that heavy vehicles are currently overcharged by $130 million a year for road infrastructure spending and not undercharged as Labor has put forward. There is more to road usage than simple axle size and weight. The significant increases in registration charges for highly productive multi-combination vehicles, such as B-doubles and B-triples, do not make sense when compared with their record of delivering greatly enhanced safety and environmental performance. The registration charge increases carry the very real prospect that industry productivity, safety and environmental performance will stall as trucking operators revert back to greater utilisation of the semitrailer configuration and slow the uptake of B-triples.

It will be an unfortunate situation if the first significant road transport deliverable on COAG’s national reform agenda detracted from the productivity of the trucking industry. This will increase inflationary pressure in the community and reduce the competitiveness of Australia’s trade-competing industries. These changes might be more palatable if they were delivered in conjunction with a commitment to expand and improve routes such as Melbourne to Adelaide via the Dukes Highway, in my electorate, or Adelaide to Sydney via the Sturt Highway, also in my electorate. There is no such commitment other than that which was given by the Howard government; therefore, there will be no gains in productivity. The simple outcome is that the cost to consumers will be greater. It will certainly put up the price of groceries, as well as everything else that households buy. Truckies will struggle to maintain their businesses, and struggling farmers and low-income families in my electorate will be hit as increases flow through to them. (Time expired)

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

I listened very closely to the honourable member for Barker’s contribution to debate on the Interstate Road Transport Charge Amendment Bill 2008 and the Road Transport Charges (Australian Capital Territory) Repeal Bill 2008. I am sure he, like me, was pleased to see so many people in the gallery to listen to his contribution today.

The transport industry is obviously critical to our economy in many areas but none more so than in regional Australia, and the member for Barker spoke of some of the issues in that regard. What I think we are seeing today—I hope we are not but I suspect we are, even though it is under the auspices of the COAG process and a national agreement—is another attempt to extract funding from country people, because that is where the major part of the roads network is, where most of the road transport activity occurs and where the least amount of money has been spent on improving the capacity for roads to handle heavy vehicles. The situation in the country is not the same as in city areas, which have a number of options and distances are obviously much shorter. The trucking industry is absolutely critical not only in terms of exports but also in getting the various imported inputs that are required for our industries into the towns.

There has been much discussion. I am pleased that the Minister for Resources and Energy is at the table today because he has had a great deal of involvement in a number of transport issues and this debate has been more wide-ranging than just this specific issue. I would like to take advantage of that if I could and talk about a few of the other issues in terms of costs, particularly those relating to rail and road.

As you would be aware, Mr Deputy Speaker Scott, there is a truckies memorial in Tamworth. Probably one of the most, if not the most, moving function that I have attended as a member of parliament was the first truckies memorial function when the memorial was first opened. I know there is a memorial at Tarcutta, and I presume there are some in other parts of the state. I would suggest to the minister that it would be well worth attending one of those functions, if he has not done so in the past, because he will see the spirit of the people who drive the trucks and provide that very important artery to our communities, and the relationships they share with their families. I pay tribute to those who have been badly injured or killed in accidents on the road.

Many members of parliament who have spoken in this debate have expressed great concern about this legislation’s impact on country people. I share that concern but I would just reflect on a number of issues: firstly, I do not think this is the time to be changing the status of the charges even though I fully believe that if the Howard government had been re-elected it would have done the same thing. If you look at some of the objectives of the current government’s policy on inflation and interest rates, a change in the charging regime will no doubt have an impact on a range of cost structures in terms of not only the trucking operators—those small business operators—but also the people that they supply. It is not the time to impose that sort of cost impact. Transport costs have a massive impact on the economy. If we are serious about grocery prices and those sorts of things, we should be looking very closely at any impacts that the government’s policy has on the cost structure of those businesses.

Here we see another opportunity taken to garner more funds from an otherwise productive sector. A litany of events have occurred over the last two decades in respect of fuel, which is the lifeblood of many of our productive industries—in fact, all of them—which is now a source of taxation income. Fuel excise was introduced by Liberal Prime Minister Malcolm Fraser many years ago for a variety of reasons, but the most obvious one at the time was that the government of the day was worried about an oil shock; Australia needed to maintain some sort of parity arrangement so that, when that oil shock arrived, the economy could withstand it. Subsequently, fuel became a source of taxation which was then indexed. Fuel excise has become a massive source of revenue that is running at about $14 billion annually now.

To my knowledge something like $2 billion—maybe $2½ billion, depending on how many railway shelters you take out of the equation—is being spent on roads in some shape or other. Probably one of the better programs of the previous government was the Roads to Recovery program, and that is under some degree of doubt at the moment. I would imagine that the Minister for Resources and Energy, who is at the table, would be very supportive of that particular program. I think many country people are waiting with bated breath, because it is one of the few things where there is a direct link between Canberra and local government decision making. In my view, local governments are far better situated to make some of those decisions, rather than having a centralised basis for decision making in terms of road funding. There is a flow-on effect into communities, so it is not just about 0.8c per litre which goes to Roads to Recovery—which is trivial, when 38c a litre is excise and then another dozen or so cents is GST. Local government almost genuflects for 0.8c. It should be doubled or trebled to really have a significant impact on local roads et cetera. The motorists are paying for it—$14 billion and they are getting about $2 billion back. This is another example of where some degree of extraction from road users will take place again.

I interjected when the member for Barker was speaking, when he was making a point about how the new government was going to extract money from regional people. I would agree with him, but his government was part of what was probably history making when it created a two-tiered tax system in relation to fuel taxation and the way in which country people are taxed. I refer to the Fuel Sales Grants Scheme. If you ever wanted an example of something that has disappeared into a black hole somewhere—or consolidated revenue, as the member for Barker referred to it as—and has never been seen again, have a look at the Fuel Sales Grants Scheme. You were a member of this House when the goods and services tax came in, Mr Deputy Speaker Scott, and you would remember that it was shown that, because the retail price of fuel in the country was higher—for a number of reasons, including retail margin, throughput, capacity et cetera—the impact of a 10 per cent charge on a retail price was going to have a disproportionate effect on country road users.

The member for Grey said yesterday—and I agree with him—that some people in the north of South Australia are paying $2 a litre for fuel now whereas in some parts of Sydney they are paying $1.30. There is a 70c disparity. You can just see what a 10 per cent charge on those two numbers means. It is quite a substantial amount. One cent per litre across Australia is equivalent to $360 million of revenue raised. At the time the GST came in, the disparity in retail price was 10c to 30c. Now it is probably 10c to 70c, depending on where you are located in Australia. On top of that is 10 per cent GST. That means that because of the impact of the GST country people are currently paying more fuel tax than their city counterparts.

When the Howard government recognised that particular problem, they said they would implement the Fuel Sales Grants Scheme to compensate for that two-tiered tax system that they were going to impose on those downtrodden country people that they were so sympathetic towards. They did that, and a whole range of statements were made at the time by the Treasurer, by the Leader of the National Party and by others who said, ‘The implementation of our tax reform package will not cause petrol prices to rise.’ John Laws asked the Treasurer at the time, Peter Costello:

Do you still believe that there are limits to compensating country people for the GST hike in fuel?

Mr Costello said:

No, no. What I’ve said in this, the government policy is, the excise will be reduced so that with the application of GST the price is the same.

That did not happen. They introduced a policy to compensate country people for the higher price and then removed the Fuel Sales Grants Scheme sometime later. So to this day, country people, because of their location, suffer a higher taxation regime in terms of fuel than do their city cousins. And here we have a piece of legislation which builds on that. Because country people have to use those road systems, they have to have distance as a disadvantage, they will suffer another double whammy.

Another issue that I would like to raise—and I think the current minister needs to play an active role in this—is climate change, global warming and those sorts of issues. The current government is, to its credit, actually making a lot of noise about these things. Obviously fuel emissions are part of the problem, as are fossil fuels, and there are a whole range of other health and environmental issues that the member for Kennedy is somewhat of an expert on. I am hopeful that he will make a contribution to this debate shortly. The previous government encouraged renewable energy targets, and the reality is that there is less renewable energy now than there was in 2001 when they instigated the program, even though they put in place a series of incentives to create renewable energy.

I think the new government are a bit more serious about it. They are saying that they are going to embark on a whole range of renewable energy targets. I refer the minister at the table, the Minister for Resources and Energy, to the biofuels targets. We have a set of circumstances at the moment where, if you are a biofuels producer, in 2011 you will be taxed at the same rate as for fossil fuels. In 2011, it will start to phase in and, by 2050, the excise paid on biofuels will be the same as that paid on fossil fuels.

I am pleased that the Minister for Infrastructure, Transport, Regional Development and Local Government is here as well, in front of this large gallery, to listen to this because it is very important. The government has to make clear whether or not it is serious about renewable fuels. If it is serious about renewable fuels, particularly about the biofuels contribution that could be made, it cannot use them as a source of tax revenue. The message that is sent in terms of the broader policy is a nonsense, if you maintain the position had by the former government that renewable fuel, biofuel, was seen as a source of taxation. All of those messages that you are trying to send out to the community—whether they be about plastic bags, solar, wind, geothermal, conservation or carbon storage—will be at risk if you use renewable energy as a source of revenue to be used in other areas. So I urge the minister for infrastructure and transport to pay some attention to that anomaly. It was created by the former government but it is still sitting there. People are quite willing to make an investment in a whole range of renewable energy areas, not just in the biofuels area, but they are fearful that, if they do, the dab hand of Treasury will at some time move and use them as a source of revenue.

I would also like to reflect on the inland rail debate. I know that the two ministers at the table are well aware of that debate, and that, as we speak, another study is about to be performed. About seven years ago there was a stake driven into the banks of the Macintyre River near Goondiwindi, which was supposedly the start of the inland rail, and nothing has happened since. It was a lot of hot air. Irrespective of where that actually goes—it should go where it is best for the nation—I encourage both ministers to expedite activity on that. We say we are serious about some of these trucking issues. The member for Barker, who has now assumed the chair, was most concerned about the interaction of the trucking industry and tourism. If we are serious about those issues, we should look at rail. If we are serious about energy usage, carbon emissions et cetera we should look at the rail issue in conjunction with the freight issue.

We have an absurd arrangement in New South Wales at the moment. As we are speaking about changing the Wheat Marketing Act in this parliament, in New South Wales we do not have any trains to cart wheat to the port. We will have a massive influx of trucks to move the next potentially very large harvest in New South Wales to the port. Pacific National has said it will not cart grain anymore. That used to be a publicly owned instrumentality and now it has sold out on the people that the whole network was developed to service, so there will be much more pressure on the trucking industry.

An issue in relation to the transport industry that I reluctantly take the opportunity to raise today is the recently reported incidences of child sex at Moree and Boggabilla. The allegations are that some truck drivers are paying, with either money or drugs, children as young as eight years old for sex in their trucks. The police say they know about this. The local state government member, Kevin Humphries, has said he knew a year ago and reported it to the police. Many community members are saying that they are aware it has been going on for many years. If this is the case, there needs to be an investigation into what these people are saying. How do they know? What have they been told? What reports have actually gone to the police? Some members of the federal opposition have said that we need a Northern Territory style intervention in Moree and Boggabilla. We have the police there, and they are saying that they cannot do anything about it. This is rape. Regardless of whether or not money or drugs are changing hands, it is statutory rape for anybody to interfere with a child given the nature of these allegations which have been made. I urge the federal minister to look closely at this issue and carry out an inquiry into some of the information that has been given to police previously but may not have been taken forward in the appropriate fashion.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

In the state of Queensland, we have five centres of population of well over 100,000—some of them are over 300,000—that are 300 kilometres from the nearest city. In fact, a million people live 2,000 kilometres north of Brisbane. Even though we produce about seven per cent of Australia’s fruit and vegetables in North Queensland, they have to travel 2,000 kilometres down to Brisbane to the nearest markets and back again. That to me is extraordinary, but that is what happens. For those of us who live in North Queensland, for example, our fruit and vegetables have to be transported, under refrigeration, 4,000 kilometres at the very least. Under the Interstate Road Transport Charge Amendment Bill 2008, the increase in costs to us will be huge, but the increase to those 1½ million people in a decentralised state like Queensland that live in those five centres over 300 kilometres to the nearest city will be enormous. Even in New South Wales, there are two million people living 200 kilometres away from Sydney. If you increase the cost of transportation, which is built into every single item you purchase in regional New South Wales or regional Queensland, and you then add the GST, you have an enormous inflation of the price of everything in rural and regional Australia, where some two or three million—maybe even four million—people live. Some 300,000 to 400,000 Australians live in north-western Australia, in Darwin, Kununurra and the northern Pilbara, and those people are 4,000 kilometres away from anything at all. Every single thing they buy has built into its cost structure 4,000 kilometres of transportation costs, and on top of that goes the GST.

I remember a famous address by one of our vice-presidents in the early days of the National Party, when we were still the Country Party. He said, ‘The cost of a loaf of bread in Jambin is twice the cost of a loaf of bread in Bundaberg,’ and he went into why that was so. We can see that clearly in the price of petrol. In Townsville, we have about 10 petrol outlets. They are huge outlets and there are about 10 of them for 240,000 people. Each of those service stations services 24,000 people. There are three service stations in Charters Towers servicing 15,000 people. There is one service station in Julia Creek servicing 700 people. The cost structure on a service station is much the same whether you are servicing 24,000 people or 4,000 people. Obviously, the price must be higher to carry the overhead costs in a service station or in any other facility in these places.

We did a very in-depth study when I was the secretary of the Chamber of Commerce in Cloncurry. We got the James Cook University to do a CPI cost comparison in food items between the mid-west towns of North Queensland and Brisbane, and the difference was 22 per cent. If there are any doubts about that, the teachers union commissioned a study at the same time and it was 22.5 per cent. So I think we can safely assume there was a 22 per cent difference between the price of food and grocery items in the mid-west towns of North Queensland and Brisbane. At the time in that area the cost of transport was 60 per cent of the price of the potatoes. The cost of transport was over 60 per cent the price of cement. In motor vehicle parts, it was over 60 per cent. There was almost a doubling of our costs in these areas as a result of transportation costs. So, when you come in here to increase our transportation costs, we must fight tenaciously against it. If we want to be internationally competitive, then the cost structures created by government must be cheap.

If you want to be internationally competitive, your cost input items have to be at a very low price. If you look at what is carted in Australia, one of the really huge items that is carted in bulk is mining product. Unfortunately, and sadly, the vast proportion of our product from north-west Queensland is carried by road transport instead of by rail, reflecting the incompetence of the state government in Queensland. Whether we like it or not, it is being carried by road transport. The cost structure for the mining industry is in part the cost of road transportation.

Probably the biggest single item carried in Australia is cattle. The Road Transport Forum of Australia was chaired for many years by the presidents of the Livestock Transporters Association because they were the biggest operators. I cannot help but pause for a moment and pay tribute to Australia’s livestock hauliers. Kevin Pattel—the Pattel families probably own one of the biggest combined livestock hauling operations in Australia—constantly said in his heyday, ‘What industry in Australia had the same charges at the end of the war as we are charging today?’  My old dad charged a pound for a mile per deck—or per K wagon as they were called then. I think Kevin made this statement in 1978. He said, ‘Today we are charging a dollar a kilometre, which is much the same charge as we charged at the end of the war.’ What a great tribute to the competitiveness and the efficiency of the operations of these heroes.

Today I rang the Curley Transport people—Michael and Stephen Curley. Curley Transport are one of the two or three biggest operators in Australia. I asked them what the industry charges are today. Since 1978, they have gone up to only $1.25 a kilometre. So, despite a tenfold or twentyfold rise in the CPI since 1945, the industry’s charges are not much higher than 1945. But government cost burdens keep being added. Let me give one example. The member for Batman will be very interested in this. I know that he has a great interest in energy and a very receptive and questioning intelligence on it as well—and I will ask him for some things afterwards! I served on a committee with him and I say that with all sincerity. We are well aware of the price of energy. I carry around with me and I have in my office a picture of me filling up a Holden motor car in Sao Paulo in Brazil for 74c a litre. Ethanol there retails at the bowser for 74c a litre! In the United States, where 15 per cent of all gasoline is ethanol, it is 80c a litre—that is, 80c Australian. If they can get it for 80c in the US and Brazil can do it for 74c, why are we in Australia paying $1.40? Because we are in the grip of the oil companies; that is why.

If the government feels it has to go down this path, please give us some relief. The oil companies do not buy at spot market prices. They own the wells. They have a cost of production price which is exactly the same now as it was five years ago, when the price of a barrel of oil was $35. It is now $100 and the cost of production is exactly the same, so I leave to your imagination the sorts of profits these people are now making.

But let me return to the cattle industry. I have had cattle since I was about 20 years of age. I have owned cattle all my life. My daddy never owned any cattle or anything, so I have had to make my own fortune and my own way in the world in the cattle industry, and I know it intimately. The Americans are killing us in cattle. The reason is that they buy their grain for $150 a tonne. Even in North Queensland we need this grain, and we pay $250 a tonne for our grain plus $200 freight. I will tell you why they pay only $150 a tonne. It is because the grain they feed to their cattle is distillers grain, which is a by-product of the ethanol industry. By the end of next year the United States will have 200 ethanol plants, each of them producing around 250,000 tonnes of distillers grain, which is $150 a tonne. How can we compete against that? We have to pay $250 a tonne, and in North Queensland we have to add onto that $200 a tonne for freight. So how can our cattle industry compete against their cattle industry? And the PR of the oil companies is so magnificent that I have had people come up to me and say, ‘Jeez, it’ll put the price of meat up, won’t it?’ It puts the price down, not up! The honourable member for Wide Bay thinks it is funny. I do not know that there is anything funny there, but he is laughing at it. These things obviously bring him mirth. He was in government for 12 years and did nothing about ethanol, but now he thinks it is funny that we should have to pay what we have to pay.

The cost of freighting cattle was $60 a head for us in North Queensland. Perhaps a third and certainly over a quarter of Australia’s cattle industry is in Northern Australia. We paid about $60 to get our cattle down to the major markets in Brisbane or points south. If you are in Western Australia or the Northern Territory you freight them to Adelaide or Perth, and it was $60 a head. But the average cost of cartage has gone up to $100 a head. That is really to do with government charges and allowing the oil companies to run rampant and charge what they please. That has been very serious for the competitiveness of the beef industry, which at this stage is still our fifth biggest industry. So we are suffering very badly as a result of inaction by the previous government.

But the current government are not starting off well by increasing the infrastructure costs. The member for Wide Bay is laughing again. I would like that to be put in the Hansard. He obviously thinks these things are funny. I applaud the new government on their rhetoric, which has been marvellous. They say the last government handed out money on the basis of winning votes. With all due respect, the railway line from Darwin to Adelaide was done on the eve of the South Australian election. It is a railway line that runs from nowhere to nowhere through the biggest desert on earth. Who knows what it is going to carry. At dinner one night a number of Liberal members explained to me that it would help in lowering the cost of imports. So it was a $500 million subsidy for importers. I do not know whether anyone realises how ridiculous that is, but that was their argument.

If, as my colleague from New England has pointed out, we had gone with the route of the great inland railway line, which was the dream of Everald Compton and Donny McDonald up in my area—God bless them—then that expenditure would have been very logical for all of our export industries. There is one million tonnes of phosphate coming out of Mount Isa and all the minerals from Mount Isa Mines and all of that huge mineral belt. There is the giant cattle industry of North Queensland. There is the huge grain production area all the way down to the New England area and through the back of Queensland and the back of New South Wales. And then there is the wool production that we have still got—and it is no thanks to deregulation that we still have half a wool industry. All of those things could have been exported out of those areas quickly and speedily if the rail line had instead come across to North Queensland.

The point made by the government that has come in, the current government of Australia, is absolutely true: the giant spending by the previous government was on the basis of winning votes; it was not on the basis of lowering our infrastructure costs. Today we find an increase in our infrastructure costs. We plead with the government: listen to your own rhetoric; you want the savings of the Australian people to be injected into infrastructure items. Heaven only knows that we need a giant power station for North Queensland to help us to process our metals and we need a port at Karumba to facilitate export product. We need this giant inland railway to connect Mount Isa to Tenant Creek and then there is some logic in having a line south from Darwin—for a line from Tennant Creek to Darwin at least there is huge logic for this section. We are halfway to getting down to the member for New England’s area so we can take the giant export wealth out of Australia at cheap cost. That is not happening today.

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

Tinkering at the edges.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

We are increasing infrastructure costs, with all due respect. I take the interjection from the member for New England. We are actually increasing infrastructure costs. You can redress this by introducing ethanol. You could reduce our infrastructure costs by at least 40c a litre, maybe 60c a litre. I am not saying we are going to be able to get down to Brazil’s price of 74c but no doubt we will go very close to it. There is also an increased benefit when we produce it from grain. We get benefit out of sugar cane too, I must say. The member for Wide Bay is in the House. His government told us that you could not mix petrol with ethanol. You people should be ashamed of yourselves. I went to a seminar after that statement was made. A bloke said: ‘Yes, it’s very difficult to mix them! That’s ethanol, that’s petrol and you mix them.’ He poured one into the other and said, ‘Mixed.’ That was the first lie. The second lie was that it caused cancer. They dropped that one pretty quickly. The third lie was that it was going to break your motor—

Warren Truss (Wide Bay, National Party, Shadow Minister for Infrastructure and Transport and Local Government) Share this | Link to this | Hansard source

Mr Deputy Speaker, I rise on a point of order. The honourable member for Kennedy has accused me of lying and I ask him to withdraw.

Patrick Secker (Barker, Liberal Party) Share this | Link to this | Hansard source

The member for Kennedy?

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

I withdraw, Mr Deputy Speaker. We had lie upon lie. Remember, it was going to cost more.

Warren Truss (Wide Bay, National Party, Shadow Minister for Infrastructure and Transport and Local Government) Share this | Link to this | Hansard source

Mr Deputy Speaker, I rise on a point of order—

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

He is just trying to use up my allotted time because what I am saying is very detrimental—

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Kennedy does not have the call. He will resume his seat.

Warren Truss (Wide Bay, National Party, Shadow Minister for Infrastructure and Transport and Local Government) Share this | Link to this | Hansard source

The honourable member for Kennedy has again accused me of lying and I ask him to withdraw.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

Mr Deputy Speaker, I have accused his government of saying these things, each of which is clearly untrue. I completely withdraw the statement implying that he is a liar. Do not let him use it as a tool to take up my time, because that is all he is doing. I do not blame him, because what I am saying—

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Kennedy will withdraw unreservedly.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

Each of these things was said in this place. The latest one to come out was the increase in costs for cattle. I have indicated how ridiculous that is. (Time expired)

Anthony Albanese (Grayndler, Australian Labor Party, Leader of the House) Share this | Link to this | Hansard source

in reply—I thank those members of the House who have contributed to the debate on the Interstate Road Transport Charge Amendment Bill 2008 and the Road Transport Charges (Australian Capital Territory) Repeal Bill 2008. I wish to make some comments on their contributions. According to opposition members, you would think that the previous government had no role at all in developing this legislation. That is not so. This is yet another example of a coalition that has lost its way, saying one thing when it was in government and the opposite since it has been in opposition. Indeed, you can trace the genesis of the legislation back many years. The 2004 energy white paper endorsed by the Howard government as its policy framework for securing Australia’s energy future has the following to say at page 100:

The transport sector has long argued that the current excise arrangements for heavy vehicles, defined as those with a gross vehicle mass of 4.5 tonnes or more, are inefficient and need reform. The government has listened and will introduce reforms to remove inefficiencies and ensure the excise system plays a more positive role in supporting Australia’s transport task.

The existing partial excise applying to fuel used in heavy vehicles will be formally recognised and set as a non-hypothecated road user charge from 1 July 2006. The value of the charge will be set in accordance with the National Transport Commission’s heavy vehicle charging determination process. This cooperative federal-state process assesses the impact of heavy vehicles on road costs, and is used by the states and territories to set and adjust registration charges for these vehicles. The excise-based charge will be adjusted annually in the way that the states and the territories adjust registration fees. Changes to the charge will be made by the varying level of effective excise through adjustments in the level of the excise credit paid for fuel used in heavy vehicles.

The 2006 Productivity Commission study into road and rail infrastructure pricing commissioned by the Howard government found under-recovery of infrastructure costs occurs in the heavy vehicle industry. In April 2007, COAG, under the Howard government, required the Australian Transport Council to devise a new charges determination that did three things—fully recovered the costs from the heavy vehicle industry, ended cross-subsidisation between heavy vehicle classes and indexed charges. The National Transport Commission devised a determination and commenced consultation with the industry in 2007.

In a speech given on 28 June 2007 entitled ‘The coalition government’s transport reform agenda’ the member for Lyne, the then federal transport minister and Leader of the Nationals, said:

The National Transport Commission will develop a new heavy vehicle charges determination to be implemented from 1 July 2008. The new determination will aim to recover the heavy vehicles’ allocated infrastructure costs in total and will also aim to remove cross-subsidisation across heavy vehicle classes.

That was the coalition policy. The difference between the coalition policy and what is in this legislation is that this legislation delays the charge until 1 January 2009 and we have a safety and productivity package. We have listened to the industry and responded accordingly. The opposition are simply not fair dinkum in saying they oppose these bills. They set up the processes. They said it was their policy. This bill of course allows for a change in cost and cross-subsidisation. At the moment the smaller of the heavy vehicles are subsidising the larger vehicles. Common sense tells you that the smaller vehicles tend to be operated much more by smaller, family owned businesses and often owner-drivers.

Opposition Member:

Opposition member interjecting—

Anthony Albanese (Grayndler, Australian Labor Party, Leader of the House) Share this | Link to this | Hansard source

The member opposite says, ‘That’s right.’ He should vote with us on this legislation because it is outrageous that owner-drivers and smaller operators are subsidising the big companies, and that is the situation at the moment. This bill removes this anomaly. The opposition understood it when they were in government. Now in an opportunistic move they say they are opposed to it. Twenty-five per cent of the fleet currently pay too much. Twenty-five per cent of the fleet—one in four heavy vehicles—will get a reduction in their costs as a result of this determination. The increase, which is substantial, will only apply to six to seven per cent of heavy vehicles, on the basis that the heavier the vehicle, the greater the cost on the roads and therefore the greater the cost to the taxpayer.

The other comment that was made by the opposition was that somehow the fact that this was a determination of the ATC on 29 February showed that the Commonwealth was adopting charges forced on it by the states. We know that the blame game simply gets us nowhere. The coalition’s chest beating and posturing in dealing with the states was nothing more than rhetoric and they did not get things done. Good government is about working together and getting results. The Federal Interstate Registration Scheme and state registration charges are correctly pegged at the same rate. The opposition should think about this: if they block this legislation, it will lead to different charges at the state level and for those vehicles which are federally registered. Is there a serious argument that that is sensible economic policy? That would lead to a substantial regulatory burden and a substantial increase in costs.

The member for Wide Bay has also said that indexation arrangements will be higher than inflation. That is simply not the case. The indexation is linked to historical road funding. This is about full cost recovery. What it does is look at the actual costs, so there is nothing hypothetical about the way that this will operate. The other extraordinary fact is that of all the opposition members who spoke not one mentioned the safety and productivity package, the $70 million commitment proposed by this government which will trial new black box technologies, facilitate better speed and fatigue management, provide more heavy vehicle rest stops and provide for increased expenditure on infrastructure to strengthen bridges. The fact is this package has been warmly welcomed by industry. In 2007, tragically 1,611 people died on our roads. Accidents involving heavy vehicles account for nearly 20 per cent of these deaths, with speed a factor in around 30 per cent and driver fatigue a factor in up to 60 per cent of cases, but the opposition has remained silent about this important reform.

Warren Truss (Wide Bay, National Party, Shadow Minister for Infrastructure and Transport and Local Government) Share this | Link to this | Hansard source

It is not even in the bill.

Anthony Albanese (Grayndler, Australian Labor Party, Leader of the House) Share this | Link to this | Hansard source

The shadow minister says it is not in the bill. There are a lot of things that are not in the bill. This is about registration charges. The changes in excise that you spoke about are not in the bill either. This debate is about two things. One is the Interstate Road Transport Charge Amendment Bill. This adopts new heavy vehicle charges for vehicles registered under the Federal Interstate Registration Scheme from 1 July 2008. It ensures that federal charges are consistent with state and territory registration charges. They will go ahead anyway, so let us not create a two-tiered system. The second is the Road Transport Charges (Australian Capital Territory) Repeal Bill 2008, which repeals the 1993 act and allows the ACT government to introduce new heavy vehicle registration charges into its own legislative arrangements in the same manner as other states and territories. In total the bills deliver the road transport reform requested by the Council of Australian Governments with broad agreement from the industry. The reform follows the self-evident principle that the heavy vehicle industry should pay for its share of the infrastructure costs incurred by governments. I commend the bills to the House.

Question put:

That this bill be now read a second time.