Brendan Nelson (Bradfield, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

My question is to the Prime Minister. Does the Prime Minister agree with the chairman of the ACCC, who stated this morning that FuelWatch may result possibly in higher prices?

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

If we go to exactly what Mr Samuel said today on ABC radio 774 with Ali Moore this morning, he said:

FuelWatch will not in our view lead to an increase in prices. It will, based on our analysis of the Perth situation, lead to a statistically significant reduction in prices. But there is a far more important element of FuelWatch—it is about giving consumers the power to determine when to buy petrol and where to buy it at the lowest possible price.

The choice in this House is very simple: either we vote for additional information to be provided to Australian motorists and consumers or we vote for a cosy, continuing deal with big oil companies.

Janelle Saffin (Page, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Prime Minister. Will the Prime Minister outline to the House the impact that rising global oil prices are having on Australian motorists? What is the government’s response, and are there any obstacles to that response?

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

Look around the world today. We are confronting the full dimensions of the global oil crisis, which has seen global oil prices go up by 400 per cent since the Iraq war. As we know, the Iraq war of itself represented an enormous impediment to the successful continued flow of oil onto the global market. But it is just one element. There are other supply-side factors, including supply-side constraints in Nigeria and huge demand-side challenges which come from the rise of China and the rise of India. With the Indian economy booming, you are going to have another one million-plus Indian motor vehicles on the road each year. Look at the rise of China and the projections out from where China was just a few years ago onto 2010, 2020 and beyond, and the total proportion of world oil consumption which China will represent is a huge new demand factor in overall global oil prices. China’s global energy demand means that we also see, through Australia’s resources boom in the coal sector and the resources sector more generally, that that demand is leading to an acceleration of our own terms of trade. On the question of supply and demand, the other responses which are important in terms of global oil deal with what we are going to do in terms of alternative fuels into the future. This government is embracing that as a strategy for the future through work being done by several of my ministerial colleagues.

On the question of fuel-efficient cars, Australia needs its own manufactured hybrid car. That is why we have put money through a half billion dollar green car fund to assist Australian motor vehicle manufacturing to bring onto the streets of Australia our own hybrid car so that Australian consumers can go out there and buy with confidence, knowing they are supporting Australian manufacturing jobs when they buy that vehicle and at the same time contributing to a better outcome for themselves in terms of what they pay at the bowser, not to mention a better outcome in terms of the environment.

Beyond these measures—how we deal with the demand-side and supply-side factors, how we deal with alternative fuels and more fuel-efficient cars—is the great challenge of public transport investment. Historically the government which has preceded us has said, ‘That this is not our zone; we don’t go there.’ In fact they have said that this is exclusively a responsibility for the states. We have said the reverse. If you look at urban congestion in the major cities of Australia up the east coast—in Brisbane, Sydney and Melbourne—and the fact that we still, in the 21st century, do not even have the beginnings of anything that looks like a comprehensive metro system in these large cities, surely that is an indictment on us all that we have failed to act. We are facing gridlock in Sydney, gridlock in Melbourne, gridlock in Adelaide and gridlock in Brisbane and in other cities because of this: an absence of effective measures to deal with public transport. That is why we have, in part, a Building Australia Fund: so that we can investigate these sorts of proposals for the future and, if they pass muster, to get behind them to get people out of cars, into decent public transport and to work on time so that they can also contribute to the overall challenge of reducing demand on global oil.

Of course, the other thing which governments can do is to make sure that the family budget is assisted to the greatest extent possible. What we have done through this budget is to make sure that through the tax measures, through the childcare tax rebate and through the education tax rebates that we are providing, we are also delivering extra dollars into the family budget each week. Let me give you one example: a family of four with a combined income of $87,000, one full-time worker $60,000, one part-time $27,000, two kids, one in child care and one at school. What do they get as a consequence of the budget that we have just passed?

Brendan Nelson (Bradfield, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

What about cars?

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I will come to the cars question in a minute. It is worth actually calculating the quantum here. Through the tax cuts, a family of that nature—that is, with a $60,000 full-time worker and $27,000 part-time worker and two kids, one in child care and one in school—are delivered an amount equalling $1,050 per year for the 2008-09 year, that is $20.19 a week. That is the first thing. The second thing is that the childcare rebate delivers $1,255 for the year, $24 .13 a week, and the education tax rebate $375 per year. Add those together and that is $2,680 a year in extra disposable income delivered by the measures which have been introduced through this budget. That is what we mean by practical assistance to the family budget to assist them in dealing with all the challenges coming about through increase in the price of petrol, increase in rents, increase in mortgages, increase in grocery prices and the rest. That adds up to an extra $52 per week.

What have those opposite offered in this respect? If you are to believe that those opposite are serious about their policy on excise, given that the member for Wentworth has said he cannot guarantee that they would actually implement this policy if they were elected at the next election, on 30 litres being consumed a week that means you are adding $1.50 extra per week to the family budget, in contrast with $52 per week that we are delivering through these budget measures. Can I say that at the end of the day it is one family budget and the question is: where do you find the extra disposable income to help on these critical cost of living pressures? That is what shapes so much of our determination in this budget to make sure that we could deliver extra to the budget table. In the bill currently before this House, which I think has just been voted on, the Medicare levy surcharge alone assists families in the bracket of $50,000 to $100,000, who are currently regarded by those opposite as high income earners, because that was the basis on which it was established—high income earners. We do not have that view and we think it is better that we allow those individuals to have some choice when it comes to how their precious family budget dollars are spent.

So through the tax measures, the education tax refund, the childcare tax rebate and the measures which have just gone through the House of Representatives on the Medicare levy surcharge, we deliver extra real dollars to the family budget. It is $52 per week extra based on the cameo I referred to before against $1.50 a week extra on the basis of the excise promise which those opposite do not have sufficient confidence to say to the parliament they would actually deliver when they are in government.

I conclude on this: at the end of the day it is about responsible economic management, and responsible economic management means that, if you are putting downward pressure on inflation and downward pressure on interest rates, you have got to deliver a decent budget surplus. We have done that with a $22 billion surplus. Those opposite have conducted a $22 billion raid on the surplus, and what that is going to produce is upward pressure on inflation, upward pressure on interest rates and therefore upward pressure on prices when it comes to those in the Australian economy currently doing it tough.

Brendan Nelson (Bradfield, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

My question is to the Prime Minister. Prime Minister, will you rule out a cut in the petrol excise?

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

First of all, I ask those opposite to commit to whether they will rule in a cut to the excise, given their position—

Opposition Members:

Opposition members interjecting—

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! Those on my left will come to order.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

that the member for Wentworth refuses to commit to honouring the commitment publicly given by the Leader of the Opposition. The Leader of the Opposition says, ‘I’m going to give you a 5c cut in the excise on petrol.’ The member for Wentworth gets asked, I seem to recall, at the National Press Club and says that he won’t give that commitment.

Brendan Nelson (Bradfield, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

Mr Speaker, I raise a point of order. Simple question, simple answer: will you rule out a cut in petrol excise?

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The Leader of the Opposition will resume his seat. The Prime Minister.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

We have made it clear through the statement delivered by the Treasurer and by the Assistant Treasurer that when it comes to the Henry commission of inquiry into tax, income support and retirement income, they will of course consider the GST implications which flow from excise, and we will await the outcome of that report.