Robert Oakeshott (Lyne, Independent) Share this | Link to this | Hansard source

I am pleased this morning to support the Fuel Quality Standards Amendment Bill 2009 and to raise several related issues within the bill. In an area like the Mid-North Coast of New South Wales, petrol generally is a contentious issue at the best of times, particularly the pricing of retail fuel. On a more general basis, fuel quality is also a contentious area of public policy in regard to issues such as ethanol blends and various mandates that are or are not being implemented throughout states such as New South Wales.

The purpose of the bill is to amend the Fuel Quality Standards Act 2000 in order to implement the recommendations of the first statutory review of the act, conducted in 2004-05, and I note that that process was undertaken by the previous government. In particular, the bill will improve the process for granting approvals to vary fuel standards by providing for a wider range of conditions that the minister can apply to approvals, including the power to require that companies take certain action to minimise the effects of supplying substandard fuel, and will simplify the procedures when approval is required urgently to avoid a fuel supply shortage. As well, it provides for more effective and efficient monitoring and enforcement powers—and I will come back to that—including the introduction of a civil penalty regime and the establishment of an infringement notice system. Thirdly, it addresses a number of issues that have arisen from the practical application of the act and its subordinate legislation.

Going back to the issue of monitoring, in the short time that I have been in this place, I have had the opportunity to meet with the ACCC Petrol Commissioner, Joe Dimasi. He has confirmed that on the Mid-North Coast there are regional towns that are included in the daily monitoring that is done. There are 110 regional centres throughout Australia which are monitored daily by the ACCC. My response to him—and I hope that the ACCC consider it—is that on their website it is only prices in the capital cities that are posted on a daily basis, so for anyone who wants to follow what is happening in regional Australia the ACCC website at this stage is not relevant, despite the work being done on a daily basis by the ACCC’s monitoring. So there is great contention in our area as to why petrol prices fluctuate so much and why there are large differentials between petrol prices in metropolitan areas and non-metropolitan areas such as the Mid-North Coast, and that debate will continue.

I seek from the ACCC that they be incredibly active in monitoring and from government that they resource the ACCC appropriately so that that monitoring can be as vigorous as possible. If discrepancies are picked up through that monitoring process then proper enforcement can be done by the regulatory authorities. There was a good example a couple of months ago. All the retail outlets in the Taree area received a letter from the ACCC. Either by design or by coincidence there was a reduction in the prices within that community at pretty well exactly the same time as those letters hit the letterboxes. If anyone is in any doubt as to whether monitoring and subsequent enforcement by government regulatory authorities—in this case the petrol commissioner—make a difference, there is a living and breathing example from the Taree community and the Manning Valley.

The second point I want to make on the bill is on fuel blends. That is an issue of contention. I think it is folly that the government is encouraging various mandates with regard to ethanol blends. I do think the science is not in. I have said previously in this House that for any West Wing fans there is a fantastic episode called ‘The Pledge’. All the various candidates have to stand up and talk about how they love ethanol, when in the back rooms they are sitting with their advisers and their staff talking about why on earth they are being forced in the public arena to stick up for the ethanol industry and ethanol blend in fuel. I would encourage everyone in this place to watch that episode when they are considering this topic.

The parliament of New South Wales recently debated the issue and following that will mandate a 10 per cent ethanol blend by 1 July 2011. I think there were four people in the parliament who opposed that, and they were four of my Independent colleagues. I think that says something about the claws of the vested interests digging deeply into the political process. I know there are many members of both political parties who question privately the issue of ethanol blends in fuels. Neither the environmental outcomes nor the impacts on farmers are necessarily good. Many farmers argue they are bad. In fact, the Australian Lot Feeders Association is on record saying that it is concerned about feed grain prices. The Australian dairy committee has expressed concerns about impacts on prices and the ultimate impact on consumers when you go down the food-for-fuel path. I hope all of us as members of parliament feel a moral obligation to our neighbouring countries. The general issue of turning food to fuel when we have a world food crisis emerging should prick the consciousness of everyone within the public policy arena in Australia.

One aspect of the Fuel Quality Standards Amendment Bill 2009 is proper labelling of various blends, including ethanol blends. I throw it to the minister to put a label on those E10 blended fuels that says, ‘Don’t buy,’ or, ‘It’s furphy fuel.’ It is a questionable product being pushed by public policy makers to the detriment ultimately of consumers. I would ask this government to consider the actions that the various states are taking with regard to this and where within the authority and the jurisdiction of the Commonwealth action can be taken. I would hope that, whether through this or similar legislation, it can be considered. I do not oppose this bill, but I flag that fuel is a contentious and continuously contentious issue in my community. It is contentious because of the pricing at the retail bowser, because of the emerging issue of fuel quality and because public policy makers are prioritising vested interests at the expense of consumers. I hope both of those issues are considered by this place in future policy.

Amanda Rishworth (Kingston, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to speak in favour of the measures that ensure fuel standards around the country. The purpose of the Fuel Quality Standards Amendment Bill 2009 is to amend the Fuel Quality Standards Act 2000 in order to implement the recommendations of the first statutory review of the act, conducted in 2004-05 and released in 2005. I note that there will be another review, which will be undertaken at the end of this year, and I hope that it will allow for some reflection on the new provisions before us today.

The most important new provisions are the improvements to the process of granting approval to vary fuel standards, particularly because the bill simplifies procedures when an approval is required to urgently avoid a possible fuel supply shortage. The bill also provides more effective and efficient monitoring and enforcement powers by introducing a civil penalty regime and an infringement notice system. The act currently allows the minister to approve the variation of fuel standards and impose conditions on the approval. Currently, those conditions must relate directly to the supply of fuel. This bill broadens the scope for imposing conditions. This increased scope means that negative impacts of the supply of substandard fuel can be offset by other actions of the corporation applying for a variation of the standard. Such flexibility allows for a holistic determination of the effects of an approval on human health and the environment. Offsetting projects could include paying for the monitoring project or other investments that ensure that emissions from such fuel are not dangerously harmful.

The bill also allows the minister to consider the circumstances in which fuel is supplied as one of the matters that constitute a fuel standard. The provision will assist in addressing issues related to the complexity of defining fuels used for different purposes and the management of blends—for example, diesel blended with biodiesel. Beyond improving the process for approvals in regular circumstances, the bill also establishes a streamlined process for an emergency situation and, under these new provisions, an emergency approval to avoid a potential fuel supply shortfall as exceptional circumstances are provided for. In addition, the minister will now be able to grant an emergency approval for a maximum period of 14 days and is required to notify the decision to rather than consult the Fuel Standards Consultative Committee. This measure expedites the process without risking an abuse of power in this area.

Finally, as a reform to the approval process under the act, the bill allows for the minister to delegate the power to grant approvals to the secretary or the SES officer, except in relation to emergency approvals, which the minister may delegate only to the secretary. This is an important efficiency measure that will allow the more routine approvals, such as those relating to racing fuels, to be handled by the department. It will also provide some flexibility for the department in those situations where an emergency approval is required to address a potential fuel supply threat and the minister is unable to make an immediate determination for some reason.

The bill also provides for important changes to the monitoring and enforcement regime of fuel standards. Under the act currently, inspectors are required to obtain the consent of a fuel retailer before exercising monitoring powers which are quite broad. This limits the efficacy of some monitoring activities, and the changes in the bill address this and will allow inspectors to enter the public area of a business premises to exercise a limited range of monitoring powers without either the consent of the retailer or a warrant. Importantly, the retailer’s right to refuse to allow an inspector to enter or remain on the premises, as is the case with any member of the public, will not be affected. This measure simply makes monitoring more effective and will also mean a better outcome for everyone.

The bill also introduces a more comprehensive range of enforcement measures to our national fuel standards regime. To complement the current criminal provisions in the act, this bill, as I have mentioned before, does include a civil penalties regime so that there will be for each offence an equivalent civil penalty provision. Other enforcement measures include the ability to issue an infringement notice and, if appropriate, accept an enforceable undertaking. The regulations may make further provision in relation to infringement notices. We all know that having this civil penalty provision will allow for more expedient penalties to be imposed for those retailers that do the wrong thing. These measures will ensure that appropriate action can be taken in respect of breaches of the act. There is also one new offence introduced in the bill. New section 65D provides that the secretary can require a person, other than the person who is suspected of contravening a civil penalty provision, who may have information relevant to an application for a civil penalty order, to provide all reasonable assistance in connection with the application. An offence applies for failure to give assistance as required. While this offence is a new offence under the act, it is a procedural offence common to other Commonwealth legislation.

The bill before the House today reflects a common-sense approach to Australia’s fuel standards regime. The bill introduces several new elements to the act, which has, for the most part, served the nation well. With the bill the government is ensuring that the process of granting approvals to vary fuel standards is simplified and made more effective, particularly for emergency situations. The government is also strengthening and monitoring an enforcement provision to consolidate the integrity of the fuel standards regime. Therefore, I commend the bill to the House.

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

The Fuel Quality Standards Amendment Bill 2009 standardises the quality and improvements of fuel being distributed in Australia in order to regulate fuel quality for environmental improvement, the adoption of better engine and emission control technologies and more effective engine operation. The Fuel Quality Standards Act 2000 was introduced by the coalition to provide a national framework for controlling and improving fuel quality. The act established for the first time in Australia a national regulatory regime for fuel quality that was backed up by a comprehensive monitoring and enforcement program. In 2003 the coalition successfully implemented amendments to the act that were necessary to enable the Commonwealth to impose requirements for labelling of fuels at the point of sale and to make a number of existing offences under the act strict liability offences.

In 2004-05 an independent statutory review of the Fuel Quality Standards Act 2000 was undertaken by the Fuel Quality Standards Act Review Panel with assistance from Economic Associates Australia Pty Ltd and SWB Consulting Ltd. It concluded that the overall policy objectives of the act were being met and should not be altered. Minor recommendations revolving around three areas were made to ensure nationally consistent standards; improvements to monitoring, compliance and enforcement; and improvements to the administration of the act.

This bill aims to make administrative amendments and implement the recommendations of an independent statutory review, conducted under the coalition, which found that these objectives are being met. The coalition supports the minor administrative amendments to improve the bill by amending the process for granting approvals to vary fuel standards by wielding the conditions that the minister can apply to approvals, by simplifying the approval procedures when a decision is urgently required to avoid a fuel supply shortfall and by enhancing monitoring and enforcement powers, including the introduction of a civil penalty regime and the establishment of an infringement notice system.

Amendments to the bill will improve the efficiency and effectiveness of the Fuel Quality Standards Act. In particular the amendments will improve the development and enforcement of fuel standards, which will benefit the public and the environment through cleaner fuels and reduced vehicle emissions. Through this bill the government will impose a new petrol tax under the ETS within one year for commercial transport and within an electoral cycle for passenger vehicles. This will be a new tax law and a new tax for motorists and all fuel users.

Further concerns I have relate to the Rudd government’s emissions trading scheme. There is no doubt that the government’s proposed legislation is seriously and fundamentally flawed. To use one example, it assumes that Western Australian energy production is connected to the national grid. We all know that Western Australia is basically an energy island. With the planned introduction of the government’s Carbon Pollution Reduction Scheme, I am concerned about the impacts a future emissions trading scheme will have on Australian industry across the board. It will impact on the transport sector, the mining sector and the farming, agriculture and forestry industries, and there will be a cost to every Australian community, individual and family. Fuel is and will continue to be a very important component in Australia’s productivity and commercial ventures, as well as an ongoing component of our energy balance.

I have mentioned many times in this chamber that my electorate of Forrest not only is the south-west food bowl of Western Australia but also contains major mining and resource activities. Transport and fuel are integral components of these industries. The transport industry itself has faced major cost increases recently. Fuel is also a major operating cost for forestry contractors. Most are small businesses and most are concerned that this government will exclude them from compensation arrangements for extra fuel costs under the proposed CPRS. It has been estimated that the result will be a cost of $14,000 a year for additional fuel charges, and most contractors are already on very narrow margins and will not be able to absorb these increases. In my electorate, this is on the back of the impact of the Varanus gas explosion. The log haulers were parked up almost immediately. We have lost contractors, and some of the remaining operators have had to sell assets just to survive.

We have seen the failed introduction of Fuelwatch, which was supposed to put competition into fuel prices. But the days of real fuel competition have been compromised by the strong position of supermarket chains in the petrol market. Consumers cannot necessarily plan ahead, as they are expected to with Fuelwatch, as to where the cheapest fuel is supposed to be, particularly in regional areas. Generally all they can do is watch the prices remain high.

According to the CSIRO’s June 2008 report entitled Fuel for thought, Australia is more vulnerable to changing market circumstances than other countries due to its relatively high vehicle use, the relatively high fuel consumption by vehicles, the almost 97 per cent reliance on oil based fuels for transport and the declining domestic reserves of conventional oil. About 41 per cent of final energy consumption is used in the transport sector, and demand has grown by 2.4 per cent per year. The vast majority of domestic passenger and freight trips are undertaken in road vehicles, which account for 75 per cent of transport fuel use. Air transport is the second highest user, at 16 per cent, then water, at four per cent, and rail transport, at two per cent. The high level of car ownership in Australia means that transport accounts for 14 per cent of Australian’s total national greenhouse gas emissions, which is roughly equivalent to the emissions from agriculture.

There is no doubt that the price of fuel will increase under the emissions trading scheme. Those with low incomes will be most vulnerable to rising fuel costs, as spending on fuel represents a greater proportion of disposable income. In addition, there is a tendency for this group to own less fuel efficient vehicles and have fewer resources to invest in alternative fuel or more efficient vehicles. Regional communities and those located on the urban fringes will also be disproportionately impacted upon, owing to their higher fuel use and fewer options for reduced motor vehicle travel or public transport.

The increased cost of oil based fuels will filter through the economy, increasing the costs of all goods and services. The mining and metal-manufacturing sectors are amongst the highest users of transport as an input to production. According to the 2005 ABS report, the transport of food to retail outlets accounts for between one and six per cent of the cost of grocery items. The impact of the ETS on local and regional producers getting their products to markets will result in higher cost increases both to the producer at the farm gate and, through the food supply and value chain, to the consumer. An emissions trading scheme that does not include international emitters will represent a serious threat to food security and to our home-grown regional food producers, food manufacturers and exporters.

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

The member for Forrest is talking about fuel quality. She has strayed quite a lot on the ETS, and I have allowed it, but I think we would like to get back to the actual bill before us.

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

As I said, I support the bill and recommend it to the House.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

It is with great pleasure that I rise to speak on the Fuel Quality Standards Amendment Bill 2009. This legislation will implements the recommendations of the first statutory review of the Fuel Standards Act 2000, addresses a number of administrative issues and provides an independent review of its operation every five years. The next review is due to commence late this year. The amendments to the act will improve development and enforcement of the fuel standards, which in turn benefit the public and the environment through cleaner fuels and reduced emissions.

I have noted what a number of members making contributions to this debate have said. The member for Lyne raised a number of valid issues. Members on the other side tended in their contributions to stray—as you pointed out, Madam Deputy Speaker—from the actual ambit of the legislation. I support this legislation. With those few words, I hand over to the Parliamentary Secretary for Regional Development and Northern Australia to sum up.

Gary Gray (Brand, Australian Labor Party, Parliamentary Secretary for Regional Development and Northern Australia) Share this | Link to this | Hansard source

I acknowledge the excellent contributions of all speakers in this debate and rise to sum up. The Fuel Quality Standards Amendment Bill 2009 will improve the efficiency and effectiveness of the Fuel Quality Standards Act 2000. In particular, these amendments are needed to improve the development and enforcement of fuel standards, which in turn benefit the public and the environment through cleaner fuels and reduced vehicle emissions. The measures contained in this bill will help the government stamp out unscrupulous dealers who illegally supply substandard fuels to Australian motorists, in breach of national fuel quality standards. The act currently allows for approval of the variation of fuel standards and the imposition of conditions on the approval. However, such conditions must relate to the supply of fuel. The bill will broaden the scope of the conditions that can be applied to approvals to vary fuel standards. This will allow for a company that has just been granted an approval to be required to take measures to offset the adverse impacts of any supply of substandard fuel.

The approvals process has also been streamlined in relation to variations of a minor nature and for the addition to the approval of other suppliers, who are referred to as ‘regulated persons’ under the act. The bill will allow for these sorts of minor decisions to be made by senior departmental officers. A key feature of the bill is the introduction of the power to grant approvals in emergency situations to avoid a potential fuel supply shortfall without having to consult the Fuel Standards Consultative Committee. In these circumstances, where time is very limited before the threat of the fuel supply shortfall is realised, the committee need only be notified of the decision. An emergency approval can only apply for 14 days, after which the committee must be consulted on any proposed extension of the approval. The bill will also allow the circumstances in which fuel is supplied to be included as part of the fuel standard. This provision will allow the inclusion or exclusion of certain end uses, where appropriate, from the application of fuel standards, and it will assist in addressing issues relating to the complexity of defining fuels used for different purposes and the management of blends. This is particularly important for biofuels, where different blend ratios with petroleum fuels will have implications for vehicles. This change will allow for fuel standards to be set for fuels blended with biofuels such as biodiesel and ethanol at different percentages and for clarification in the blend standard of the types of vehicles the fuel is suitable for.

The bill will introduce a more comprehensive range of enforcement measures, including a civil penalties regime, so that there will be for each criminal offence currently in the act an equivalent civil penalty provision. Other enforcement measures include the ability to issue an infringement notice and, if appropriate, accept an enforceable undertaking. These measures will ensure that appropriate action can be taken in respect of breaches of the act. The bill will allow inspectors to enter the public area of business premises during normal hours of operation and exercise a limited range of monitoring powers without the consent of the retailer or without a warrant. Entry to other areas of a business premises or entry outside normal business hours will, as currently applies, require the consent of the retailer or a warrant. The bill will expand current information-sharing powers to allow the secretary to share information obtained under the act to assist in the administration or enforcement of various laws—for example, the Energy Grants (Cleaner Fuels) Scheme Act 2004 and the state and territory fair trading laws. This will facilitate communication with other regulators to increase the intelligence base on potential offenders. It will also assist in addressing gaps in the act’s coverage of the industry.

There is only one new offence in the bill. As a consequence of the addition of a civil penalties regime in the act, a new section 65D provides that the secretary can require a person, other than the person who is suspected of contravening a civil penalty provision, who may have information relevant to an application for a civil penalty order to provide all reasonable assistance in connection with the application. An offence applies for failure to give assistance as required.

The act, as currently written, is difficult to enforce. This bill will make the legislation much more robust to ensure that the quality of fuel supplied in Australia is of the high standard required for new advanced engine technology in vehicles. This will be important to enable us to respond to new fuels and vehicle technologies as they emerge. In closing, let me make clear that this bill will help to stamp out dodgy dealers who supply substandard petrol to consumers and will give Australian motorists confidence that the fuel they are paying for is of the high standard they expect. I commend the bill.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Ordered that this bill be reported to the House without amendment.