Jim Turnour (Leichhardt, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to support the National Fuelwatch (Empowering Consumers) Bill 2008 and related bill. This is an important measure as part of the Rudd government’s overall plan to ease the pressure on family budgets and on those like pensioners and carers who are doing it tough. Fuelwatch is a very important measure that I strongly support, and I know that consumers and residents in my communities in tropical North Queensland are looking forward to its introduction later this year. I would like to congratulate the Assistant Treasurer for the work that he has done on this bill and for the efforts that he has put in over an extended period of time and to thank him for the work that he has done with me on what we can do to tackle the rising cost of fuel and the pressure that that is putting on family budgets.

I note that we have introduced a Petrol Commissioner and given them formal monitoring powers. I am very pleased that the commissioner also has the option of looking at LPG and diesel and advising the Assistant Treasurer in relation to whether they need more powers there. The stance that the Assistant Treasurer and the Rudd government have taken, which Fuelwatch is a very important part of, stands in stark contrast to what the opposition did when they were in power. When the ACCC was looking for more powers, they did not give them more powers. They basically said that petrol prices were not a problem, that there was no issue, that families were not under pressure. It has only really been over the last six months—or, effectively, the last few weeks in response to the budget—that the Leader of the Opposition has taken any real interest in the problems associated with rising fuel costs and the pressure that is putting on family budgets. If we look at the opposition’s budget response we see that responding to the challenges of rising fuel prices is not really supported by the opposition. It was a political statement about supporting and maintaining the Leader of the Opposition’s position within this parliament rather than a serious response to the challenges facing the family budget due to rising fuel costs.

Families are doing it tough out there, particularly families in the mortgage belts across the country and particularly in places like the southern suburbs and northern beaches of Cairns. Fuelwatch will save motorists a couple of cents a litre based on the Western Australian experience, where FuelWatch has been in operation since 2001. That is important in itself: it will on average save a couple of cents a litre. That is based on the ACCC’s econometric modelling that underpins the government’s decision to introduce Fuelwatch. But the really positive outcome in terms of Fuelwatch is that it empowers consumers so that, rather than guessing the best time and place to buy petrol, consumers will know where and when they can buy the cheapest petrol in town. They will be able to map out their travel plans to take advantage of discount fuel. So, somebody living in the northern beaches of Cairns will be able to get on the internet or get an SMS and know before they leave home whether they should buy fuel in the northern beaches of Cairns or wait and get it in town. Similarly, people in the southern suburbs will be able to get information about where the cheapest fuel is in town. The opposition want to deny consumers this information. They want to deny consumers the opportunity to find the cheapest fuel in town.

There are significant savings to be made in terms of that opportunity. We have already heard that on average there is a couple of cents per litre to be saved by introducing Fuelwatch. But, by allowing consumers to get out there and find cheaper fuel, I am sure there will be significantly greater savings to be had by people in my local community when Fuelwatch is introduced. And we need the support of the Senate to do that. I am very concerned that the opposition is going to prevent that happening and potentially delay the introduction of Fuelwatch.

I have talked about some of the benefits in regional Australia but, you know, in the cities there are potentially even greater benefits. In capital cities there is an average variation of 15c per litre—up to 30c in some situations—between the cheapest and the most expensive fuels. So it simply makes sense that, if you need to fill up your tank, with Fuelwatch you will be able to find the cheapest price in your area and take advantage of those savings.

According to the WA experience the rewards for using FuelWatch can be significant. In fact, according to a recent independent survey in Western Australia, where FuelWatch is in operation, people who subscribe to the email service said they had saved between $2 and $20 a week, as much as $1,050 a year. It is no wonder I have had constituents contacting my office supporting the introduction of Fuelwatch and wanting to know which fuels are covered. Fuelwatch will apply to petrol retailers that offer motor fuel for retail sale. Fuels covered by this scheme are those defined as suitable for use in an internal combustion engine. As the government has already announced, this would include unleaded petrol, premium unleaded petrol, LPG, diesel, 98 RON and biodiesel blends.

The crux of the Fuelwatch scheme is the requirement for petrol retailers to notify the ACCC of their intended price for the next day. This must be done by 2 pm on the immediately preceding day. Petrol retailers will be required to maintain this notification price for a 24-hour period commencing from 6 am the following day. However, if a petrol retailer has not changed their price from the previous day, they will not be required to notify the ACCC of their price—the bill deems this price to be their notified price automatically.

For its part, the ACCC will be required to publish notified prices from petrol retailers on a dedicated website. This information will be publicly available each day by 4 pm. The bill enables the ACCC to approve other methods of publication of this price information so consumers will be able to receive emails and text messages, call a toll-free number or check the Fuelwatch website, as I have described earlier, to find the cheapest fuel in their area. Civil penalties will apply if a petrol retailer notifies the ACCC of a price but does not sell fuel at all times during the fixed price period or if a petrol retailer notifies the ACCC of its price for fuel but sells that fuel at another price.

The opposition have put forward some spurious arguments in relation to Fuelwatch and are potentially denying consumers the opportunity to actually get further information about where they can find cheaper fuel. They are not on the side of motorists and are not interested in taking serious action to reduce the price of fuel. I think it is very important that we understand that the ACCC has done significant modelling on this proposal for Fuelwatch and is fully supportive of it. On 29 May last week the chair of the ACCC said on ABC Radio:

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.

So arguments are being put forward by the opposition that this will increase prices. Are they greater experts than Graeme Samuel and the ACCC? Do they claim to be bigger experts than the organisation that has done the detailed econometric modelling? I put it to you that they know they are not the experts in this area. As I said earlier, the Leader of the Opposition’s engaging in this debate is as much about maintaining his position as it is about looking after the interests of consumers.

Currently the big oil companies have this information but consumers do not. The Rudd government, unlike the opposition, believes that consumers should have this information. Why should big oil have this information and not the consumers? Why is the opposition on the side of big oil and not on the side of consumers? We believe this system will increase competition by providing consumers with information and forcing oil companies to compete further on price, effectively forcing oil companies and retailers to tender their price.

There is no truth to the argument put forward by the opposition that Fuelwatch will reduce the number of independents. This is another spurious argument that has been put forward by the opposition. In fact, the evidence from Western Australia is that the number of independents has actually increased since FuelWatch was introduced. The opposition is trying to mislead the public by suggesting that FuelWatch reduced the number of independents. Over the period from March 2001 to June 2007, following the introduction of FuelWatch in WA, the proportion of branded independents—service stations owned by an independent operator but having the branding of an oil company or independent chain—has increased from 34 per cent to 36 per cent; and the proportion of general independents has increased from two per cent to five per cent, based on the Western Australian experience. The sad thing is that the opposition are opposed to this measure not because they do not believe in Fuelwatch, as we know that at least three Liberal leaders at the state level support it—including Mr Mark McArdle, the leader of the Liberal Party in my home state of Queensland. He has come out in support of this measure.

We know that this is all about the Leader of the Opposition maintaining his position, not about any response to consumers or protection for consumers. Mr McArdle made it very clear that he thought Fuelwatch certainly had some benefits and he really wanted to see it introduced later this year, from comments he has made. I would ask for Queensland members opposite, like the member for Herbert and the member for Dickson, to continue to look at the way that they support Fuelwatch. I believe that Fuelwatch is a very important measure for working families that will provide an easing of cost of living pressures for those families, and I strongly support it. I know that members of my community are looking forward to it being introduced.

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

I remind the chamber that it has been agreed that this be a wide-ranging debate.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the National Fuelwatch (Empowering Consumers) Bill 2008 and related bill and on what will be the abject failure of Fuelwatch to provide cheaper fuel for general motorists and the transport industry. It has failed in Western Australia, where it is now in operation, and it will fail throughout wider regional Australia subsequent to the rollout of Fuelwatch. Regional Australians have an equal right to benefit from any federal government initiative to reduce fuel prices. How does and how will Fuelwatch benefit regional and remote Australians? There is no doubt that we have some extremely efficient and committed small, medium and larger operators in a very competitive transport industry in Australia. It is an industry that delivers 1.69 billion tonnes, which is over 70 per cent, of domestic freight throughout this country. I would like to put this in perspective. I spoke to one such company in my electorate of Forrest this morning. Since the election their fuel bill has gone from $5 million a month to $7 million a month, from 17 per cent of their input costs to 23 per cent of their input costs. As we know, transport companies cannot absorb these additional costs. The increased fuel cost has to be passed on to the end user: Australian farmers, consumers, families, businesses and individuals. Increased transport costs also make Australian exports less competitive, and one in four jobs in regional areas is dependent on exports. Most agricultural exports start their journey by road.

The ACCC report on unleaded petrol states that a number of issues need to be considered before taking Fuelwatch national. One of those issues to be considered is whether regional and country markets are sufficiently competitive to benefit from increased price transparency. Let us look at FuelWatch in some areas of my home state of Western Australia. There is no evidence that watching fuel has actually reduced prices, and in actual fact recent evidence shows that weekly prices are generally higher in WA than in other mainland states. Monitoring shows that prices are consistently higher in Perth than in other capitals. Interestingly, the weekly price cycle under FuelWatch has lengthened to a two-weekly cycle. Motorists who fuel up their cars weekly are forced to buy at a higher price every alternate week. That affects 76 per cent of motorists, who fill up at least on a weekly basis. ACCC Chairman Graeme Samuel has said that Fuelwatch is not about saving motorists money; it is not a process whereby consumers might be able to save 1c or 1.5c a litre off their fuel costs. In fact, the ACCC has been reluctant to attribute any downward pressure over time on WA prices to FuelWatch, pointing out that other forces are at work in the market. An editorial in the West Australian said:

Fuelwatch, at best, helps people to find where the lowest prices are, but it doesn’t come close to doing anything about the petrol-price cycles used by the big companies. Any savings it may help motorists to make are at the margins.

If the intention of Fuelwatch is to increase competition, what will the impact be on small independent retailers across Australia? What have the effects of Fuelwatch been on the independent retailers in Western Australia? There are many who say that Fuelwatch is driving them out of business. There is evidence that Fuelwatch has given motorists even less choice. Recently the member for Cowan, Luke Simpkins, asked the Prime Minister:

Is the Prime Minister aware of the case where a Perth service station owner was fined almost $5,000 for the crime of simply dropping his petrol prices during the course of a day?

The member for Cowan then asked:

Can the Prime Minister confirm that his legislation establishing the failed FuelWatch scheme nationally will contain similar penalties as those in WA?

I, like the member for Cowan, would ask: how can it possibly be more competitive and in the best interests of motorists and the transport industry to prevent service stations from lowering their fuel prices during the course of any given day? The regulation impact statement, tabled in parliament, clearly states that independent service stations are at a competitive disadvantage under Fuelwatch. The report notes that FuelWatch in Western Australia has:

... harmed the competitive position of independents as it allows large operators to adopt a strategy of rolling price leaders. Operators with small networks are less able to employ this pricing strategy and are therefore placed at a competitive disadvantage in the market.

Further, it appears from this report that the Australian government will actually be funding anticompetitive activity by funding Fuelwatch. The report notes:

... the provision of this taxpayer funded service creates greater opportunities for price co-ordination amongst retailers, especially in more concentrated markets.

Here there has always been increased concentration in the fuel market. We also know that Treasury advised that Fuelwatch would cost small business $4,000 a year to implement and that it would disadvantage small independent fuel retailers—those working hard day in, day out to compete with the majors and clearly losing the battle. There was no consultation with small business prior to Fuelwatch being considered by cabinet. We also know that the Prime Minister has ignored top-level advice. Four of the government’s own key economic departments advised against the Fuelwatch scheme and expressed concern that it might actually push petrol prices up instead of reducing them. That cabinet ignored such strong warnings from the Department of the Prime Minister and Cabinet; the Department of Finance and Deregulation; the Department of Innovation, Industry, Science and Research; and the Department of Resources, Energy and Tourism totally undermines the government’s claim relating to Fuelwatch.

According to FuelWatch in Western Australia, unleaded petrol in Perth today is $1.56 a litre; diesel is $1.84. In my electorate of Forrest, unleaded petrol in Walpole is $1.66; in Karridale, it is $1.71; in Manjimup, $1.64.5; and in Northcliffe, $1.76. Diesel is $1.69 in Manjimup and $2 a litre in Northcliffe. That is FuelWatch working in regional areas.

How, then, is FuelWatch benefiting regional and rural areas of the south-west of Western Australia where there is limited competition? And how will Fuelwatch benefit remote areas of Australia where there may be only one fuel supplier? Australians deserve a fuel initiative that is not based on a postcode. How does Fuelwatch assist small fuel buyers in isolated rural and regional towns where there are only one or at best two fuel suppliers? Do they have to get into their vehicles and drive to the nearest major centre to fuel their cars up on each alternate cheap Tuesday? What type of false economy would this be when you live 100 kilometres or several hundred kilometres from a major centre?

During the last election campaign the now Prime Minister and Labor government promised Australian motorists lower petrol prices. I call on the Prime Minister to deliver on his election promise and guarantee that the introduction of Fuelwatch will provide motorists and the transport industry with lower fuel prices right across Australia.

Debate (on motion by Mr Albanese) adjourned.