Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Resources and Energy and Minister for Tourism. Would the minister kindly inform the House about the purpose of the Saudi oil conference to be held in Jeddah next Sunday, 22 June? Has the Australian government received an invitation to attend and, if so, what involvement is proposed?

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

I thank the member for Moreton for what is a very serious question going to the heart of the global oil crisis, which is impacting on not only Australia but also the global community. In that context I am pleased to say that, given the growing concern about the global petroleum market, the decision by the kingdom of Saudi Arabia to call together oil-producing and consuming nations and the industry in Jeddah this coming Sunday is most welcome. I am also pleased to advise the House that the Australian government has received an invitation and the Prime Minister has requested that I represent the Australian community at that very important global meeting.

As we all appreciate, Saudi Arabia is seeking to play a constructive role to encourage all the stakeholders to work together in an endeavour to stabilise the world petroleum market and, in doing so, to mitigate the damage to the global community, especially to the economies of developing countries. I take note of its decision of the last couple of days to increase oil production from July by about 500,000 barrels a day as a further important step forward, building on a decision last month for an increase of about 300,000 barrels a day. I indicate to the House that this latest increase will take Saudi Arabian oil production to its highest level since 1981. But I also indicate that those who are prepared to have a serious debate about this issue—unlike the opposition—appreciate that there is no simple solution to the problem of record oil prices and that no one nation can shoulder the burden on its own.

There are many factors to be addressed, and the conference in Jeddah this weekend is a constructive start to addressing what is a highly complex issue. The factors include not only issues of supply and demand but also the role of traders and speculators in the market, and problems on the demand side as well as on the supply side. The issues in this debate include global fears about energy security, one of the major issues debated by all communities throughout the world at the moment. They include a focus on such complex issues as instability in exporting nations; the threat of terrorism and infrastructure sabotage—and, just by way of example, in the Niger Delta at the moment production has been reduced by 20 per cent per day because of terrorism, which clearly impacts on global oil supplies; the unfortunate emergence of resource nationalism; a lack of investment; unprecedented global growth; a scramble for resources; a tight oil market with, as I have indicated, less supply than demand; and the fundamental desire of nations to protect their own economic future.

When it comes to energy, particularly oil and increasingly gas, the world is unfortunately retreating from the open markets and free trade that we have worked so hard to achieve since the Second World War. On the supply side, for example, more producing countries are nationalising their oil industries and sending away vital foreign investment and industry capability, which is impacting on the global oil price at the moment. As a result, there is limited access to over 85 per cent of the world’s oil reserves at the moment. In our own region, 55 per cent of Asian consumption is in markets with some form of subsidy.

I hope the conference in Jeddah this weekend enables the global community to start focusing on some of these very serious challenges. We also appreciate that this is important not only to the global community but also to Australia in the fight against inflation—something that unfortunately does not occupy the minds of the opposition, as reflected by their lack of attention to serious budgetary considerations in the Senate at the moment and their desire to destroy the Australian government’s endeavour to do the best by the Australian community in the fight against inflation. Unlike the opposition, the Australian government, like the global community, appreciates that the inflation risk is not just of concern here at home but was the main concern for the world’s economy discussed by G8 finance ministers in the last couple of days.

I say in conclusion: an international effort is going to be required if the market for oil and petroleum products is to accurately reflect demand and supply issues, and the Australian government intends to play a constructive role in this process. We welcome the invitation to attend this very important Jeddah conference. I simply say to the opposition: it is about time you understood that it is a serious debate confronting not only Australia but also the global community.

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

Before calling the member for Sturt, I was wondering if the member for Oxley might, as an appropriate mentor to newer members, apologise to the House about his telephone.

Bernie Ripoll (Oxley, Australian Labor Party) Share this | Link to this | Hansard source

I apologise.