Chris Bowen (McMahon, Australian Labor Party, Shadow Minister for Climate Change and Energy) Share this | Link to this | Hansard source

The Labor Party will be supporting the Fuel Security Bill 2021, and I've indicated to the government that we will facilitate appropriate passage through both houses of parliament to ensure that it can start on time. The reason it needs to start on time is that the government have failed on the matter of fuel security. They've been all announcement and no delivery when it comes to fuel security. They promised, with great fanfare, to protect 1,000 new jobs and secure fuel supply, but they've overseen 950 job losses, and fuel supply has been threatened, not enhanced. On this government's watch, half of Australia's fuel refineries have closed.

A secure fuel supply is vital for a number of reasons. Most Australians would understand why. We live in uncertain times. This is important for our economy and it's important for our national security. It's important for production. It's important for our economy that our production lines aren't threatened by a lack of fuel security. We've seen over the last 18 months just how insecure some supply lines are. We talked about this before the last election. The member for Maribyrnong talked about fuel security. He was mocked by members opposite for even raising the matter of fuel security in Australia. But these clouds have been brewing for a number of years, and we've seen announcement after announcement, and broken promise after broken promise, from this government.

A Senate inquiry in 2015, some six years ago, recommended that the government undertake a comprehensive review of Australia's fuel security. It took the government three years, until 2018, to even announce they would do this review, with a due date of late 2019. Fuel security and the job security of thousands of refinery workers, like everything else with this government, get a call-up only when there's a bad front page afoot. The interim report on liquid fuel security was delivered to the government over two years ago, in April 2019, and the government still hasn't released the final report, which was due in late 2019. This is a government that has delayed and neglected the basics we need to keep this country running. The government chose not to act then, not even to deliver the final report. Thanks to its failure to act then, we've been left almost completely reliant on global supply chains for one of our most critical economic inputs.

The interim report identified a number of things that could have been acted on over two years ago. It identified serious noncompliance with international energy obligations for domestic fuel stocks. Our requirement is to have 90 days of fuel stocks domestically available, to help protect against global and domestic oil shocks. We weren't compliant then and we're not compliant now. In not one year of the last eight long years of this government have we been compliant, leaving us open to fuel shocks and leaving our national security vulnerable. We're currently at 58 days, still a huge 32 days short of the 90-day requirement.

This is very significant for the Australian economy and for our national security. On average, the Australian household spends the same amount of money on fuel as it does on electricity and gas combined, so it's critical that we have secure supplies, to prevent against price shocks. You can just begin to imagine how much the price of fuel would rise in an uncertain international geopolitical environment where our international supply was threatened. As I've said, it's also critical to our national security. We need fuel stocks for industry, defence and aviation in an increasingly volatile world.

We have a government that likes to talk big about national security—and the Prime Minister was out there last week misleading Australians about the role of this House and the role of the opposition on national security. Apparently this was going to be 'national security week'—when they were going to put through all this national security legislation—and 'a big test to Labor'. It has now been postponed until further notice because the government doesn't have its ducks in line; it doesn't even have one of the pieces of legislation out of the security committee of the parliament, the PJCIS. The Prime Minister was out there misleading Australians about national security last week, but his government is asleep at the wheel when it comes to national security and fuel supply.

In among the government's view on fuel security is their view on electric vehicles. The penetration of electric vehicles in the Australian market will very much change Australia's fuel market. I hope that happens sooner rather than later. The rest of the world is leaving Australia behind when it comes to electric vehicles. We lead the world in rooftop solar, which is being driven by Australian households. But because of this government's complete lack of framework and understanding and knowledge of electric vehicles we are being left behind when it comes to electric vehicles, with just 0.7 per cent of vehicle sales last year being electric vehicles. It was 60 per cent in Norway, and four or five per cent is quite common around the world, but it is less than one per cent in Australia—because this government doesn't get it.

More and more, we see states catching up, Labor and Liberal, with incentives for people to buy electric vehicles. But without a national framework we will continue to fall behind. Recently, the Leader of the Opposition and I announced our policy when it comes to the cost of electric vehicles: abolishing the tariff on electric vehicles below the luxury car tax threshold; and providing an FBT concession for employers who provide their employees with electric vehicles. These are necessary steps to incentivise the take-up of electric vehicles. Electric vehicles are good for the environment, coupled with the transition to a more renewable economy and renewable electricity generation. With the right policy framework, electric vehicles are potentially good for jobs in Australia.

But we are being left behind—and not because of the views of the Australian people. It is not that the Australian people don't want electric vehicles; a majority of Australians say they would consider one for their next car. But in Australia no electric vehicles under $40,000 are available and just five under $60,000 are available. That's not the case around the world. The government says electric vehicles are more expensive. It is partly, at least, because they are making them so. There are eight models in the United Kingdom cheaper than the cheapest model available in Australia. The inaction and scaremongering by those opposite—never forget the Prime Minister saying electric vehicles will ruin the weekend and won't tow your boat. He always goes for the scare campaign, not the policy solution. And he recently denied ever criticising electric vehicles. In one of his 'triumphs of honesty', he said he would never criticise the technology of electric vehicles—which was patently untrue.

Labor will cut the cost of electric vehicles with our electric car discount. We will abolish the tariff and we will provide a fringe benefit tax concession for affordable electric vehicles. The fact that this government still has no electric vehicle strategy in 2021 is an embarrassment—an embarrassment which costs Australians money, because electric vehicles are cheaper to run, and exacerbates the inaction under this government when it comes to climate change.

Even with a greater take-up of electric vehicles, we are still going to need a fuel supply for the foreseeable future—for industry—and it will take a long time for the flow of electric vehicles to replace the stock of internal combustion vehicles in Australia. So we are going to need fuel supply and fuel security for some time. And that is why we support this legislation. It is necessary legislation which is now long overdue. I will give you a reminder of the time line. A Senate inquiry reported in 2015, a full five years before COVID. They can't blame COVID for their lack of action, they can't say they've been distracted by the pandemic, because this hasn't been going for one year or two years, it has been going for multiple years. It took the government three years, until 2018, to announce that they would even do this review. We finally got an interim report four years after it was recommended by a Senate inquiry in 2019 and we still hear crickets when it comes to action.

Then we saw, of course, the photo op from the minister and the government last September that delivered nothing in terms of fuel security and nothing in terms of job security for fuel sector workers. Since then we've seen two refineries shut on this government's watch. Only two remain, and it is vital that those two remain in Australia. It's vital that the refineries in Geelong and Brisbane remain operating in Australia, because we need fuel security. It's vital for the workers in those establishments that they remain, of course. Let me briefly welcome the preselection on behalf of the Australian Labor Party of one of those workers in the Brisbane refinery for the seat of Petrie. We look forward to him joining us in due course in this chamber.

This government has been asleep at the wheel when it comes to fuel security. They are finally catching up. This legislation is good legislation in terms of design. It is appropriate that we have payments not when the refineries are making large profits but only when they are making a loss, to ensure their continued operation. We have no quibbles with the design of the legislation, but this legislation could go a lot further. We could be talking about improving our fuel security by increasing reliance on electric vehicles and therefore reducing our fuel needs. That is something we could be doing. If less fuel is needed for the domestic car fleet then fuel security is stronger in those regions where we will continue to need fuel production and supply, such as defence.

After eight years of consistently not doing enough for our onshore fuel, after mocking the Labor Party at the last election both for the member for Maribyrnong's fuel security policy and for our electric vehicle policy, they finally come to the party with this legislation. This legislation is supported by this side of the House, but I do move the second reading amendment which has been circulated in my name:

That all words after 'That' be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House criticises the Government for its failures on fuel security, including the closures of half of Australia’s refineries since October".

I commend both the second reading amendment and the bill to the House.

David Gillespie (Lyne, National Party) Share this | Link to this | Hansard source

Is the amendment seconded?

Michelle Rowland (Greenway, Australian Labor Party, Shadow Minister for Communications) Share this | Link to this | Hansard source

I second the amendment and reserve my right to speak.

Julian Simmonds (Ryan, Liberal National Party) Share this | Link to this | Hansard source

I rise today to speak in support of the substantive Fuel Security Bill 2021 and speak about its importance to securing our long-term fuel security. It is a very important bill, as the previous Labor speaker, the member for McMahon, has pointed out, and we are pleased that the Labor Party is supporting it today.

I did note from the previous member's speech that Labor is having a bob each way, as they always do, and that the member spent more time trying to defend his failed electric vehicle policy from the last election than he did supporting the legislation. It just goes to show that the member opposite in particular and all those Labor members opposite still don't understand why they lost the last election and still want to prosecute this idea that somehow the voters got it wrong. The voters didn't get it wrong. Could it just be that, rather than sitting around in their homes, waiting for the member for McMahon to tell them that they had to take up an electric vehicle by a certain date, they might just like to make the choice of which vehicle they drive for themselves? I think the member for McMahon probably needs to jettison his failed policy, move on and support this particular legislation wholeheartedly, which he had the opportunity to do.

With that, I want to acknowledge the work done by Minister Taylor in putting together this particular piece of legislation. I know that he's passionate about keeping power prices down and providing certainty in energy markets. He's also a keen advocate for renewable technologies. He understands, as the government does, that for us to be able to back jobs, keep prices low and invest more in new energy sources we need a technology approach, not a taxes approach—the very opposite of what the member for McMahon and Labor propose. I thank the minister very much for the work that he's done in this space. The past 18 months have shown us why this bill is so important. The unexpected can happen. Our global supply chains can come to a halt for reasons beyond our control, and we have to have plans in place to secure the resources that we need, in this case our fuel reserves.

While many of us were forced to work from home during the pandemic, many were out on our roads delivering the essential services that we needed. If anything, the COVID-19 pandemic has allowed us to truly appreciate those essential workers—the truck drivers that delivered to Woolies and Coles and made sure that people had the food stocks that they needed, the farmers that made sure that our shelves were stocked, and the many fuel-dependent industries that kept on trucking so that we could keep going through the COVID-19 pandemic. It is with them in mind that we approach this bill. We know that fuel is crucial for the security of those truckers, farmers and tradies and the everyday commuters, and it must be secured in order to protect Australian jobs. Australia has shown that we can be self-sufficient in tough times, but to continue to do so we must have the legislative framework in place that locks in our sovereign capacity.

The measures in this bill will secure our fuel stocks, protect motorists from future high prices and recognise the fuel security services provided by our Australian refineries and the importance of having Australian based refineries. The bill addresses this in two important ways. Firstly, there is the fuel security services payment. As a proud Brisbane local, I'm pleased that this agreement also includes the Ampol refinery in Brisbane, which supports hundreds of local jobs. Backing both the Ampol refinery in Brisbane and the Geelong facility means securing our domestic refining capability into the future. These facilities will receive a variable payment to ensure they can continue operation, but, importantly, only when they need it. These facilities will not be paid when making a profit, only when the payment is needed to secure their ongoing capacity. When the Prime Minister visited the Ampol refinery recently, in my wonderful state of Queensland, he spoke on our commitment to fuel quality. We're working with refineries to bring forward our fuel quality improvements, from 2027 to 2024, by co-investing with them to ensure they can make the necessary infrastructure upgrades for low-sulphur fuel production. In the Geelong facility, in Victoria, that investment in the upgrade will see another 1,750 jobs for the local economy.

The second measure in this bill, which I think is just as important if not more important, legislates a minimum stockholding obligation. That is the baseline level of fuel that will be required to be held at all times. Commencing from 1 July next year, Australia will have a reserve level of fuel for our domestic needs at all times, futureproofing us against the unexpected global shocks that we now have a greater appreciation for, having been through the COVID-19 pandemic. This will apply across all major fuel types and enable the minister to set targets for fuel types at appropriate levels for Australia's sovereign needs. It is important we protect our fuel stocks. If we don't, those hardest hit will be Australian families and the essential workers that we rely on. I want to quote Dan Walton, the national secretary of the Australian Workers Union. It's not often that I quote the Australian Workers Union, but you know you're onto a good thing when even some of the most strident critics of the government can see the virtue in what you're doing. His quote was pretty simple:

We are extremely satisfied … The security of the production payment provision, along with the investment to make cleaner fuel, will underpin longevity for both refineries. Today's announcement will save thousands of jobs, both directly at the refineries and indirectly through jobs supported in the community.

It's not often I agree with the AWU, but I have to say that on this occasion they are spot on. That is what the outcome of this piece of legislation will be. We've also seen endorsements from across a range of stakeholders, including the Federal Chamber of Automotive Industries, the Australian Trucking Association, Volkswagen and many more.

I spoke earlier about the minister's commitment to a range of different energies, including renewable energies, and it is important that we speak to those in the debate today. As part of the announcement, we have reaffirmed our commitment to work with both of these major refineries on their plans to consider future fuel technologies. We want these refineries to play a role in the rollout of fuels like electric vehicle charging and hydrogen infrastructure.

The Morrison government has already committed over $1.2 billion to increase the uptake of low- and zero-emission vehicle technologies, including $74 million through its future fuels package. Research on hydrogen fuels and hydrogen technology is being done in my own electorate of Ryan, in the suburb of Pullenvale, with local residents leading the way in Australia for that research. We understand that the future is renewables but we will not devastate industries or burden taxpayers—as those opposite will—without a transition plan. That's the path that we are on, a path that backs jobs and families and protects our environment, with a technology-not-taxes approach. It's a path that also ensures that we have the sovereign capability that Australia needs, that Australia's essential industries are protected with the fuel security that they need. That's what this bill will do. I commend the bill to the House.

David Gillespie (Lyne, National Party) Share this | Link to this | Hansard source

The original question was that the bill be now read a second time. To this, the honourable member for McMahon has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. If it suits the House, I will state the question in the form that the amendment be disagreed to. I call the member for Lalor.

Joanne Ryan (Lalor, Australian Labor Party) Share this | Link to this | Hansard source

I was fascinated to listen to the member for Ryan demonstrate to us, in this House, his complete lack of understanding of this government's failure in fuel security and what it has meant for the west of Melbourne. I find it astonishing that we're here today to support a piece of legislation that is, absolutely, long overdue. It is incumbent upon us to remind this House, through this second reading amendment, of the incredibly poor history this government has in this space and that those outcomes and what they mean, in reality, to Australians, including those I represent in the seat of Lalor—the absolute loss of jobs in the west of Melbourne as a direct result of the inaction of this government—are beyond consideration. It is an absolute indictment on this government that they have sat on this necessary move for such a long time.

Let's look at the history of this, because it was not unforeseen. The clouds have been brewing for many years under this government. We have had eight years of this government and a Senate inquiry in 2015—let's just check that. It's 2021, nearly the end of the financial year. A Senate inquiry in 2015—six years ago—recommended that the government undertake a comprehensive review of Australia's fuel security problem. But this year I stood outside the Mobil refinery in Altona, with the member for Gellibrand and the member for Corio, to decry the fact that this government's inaction has caused that facility to stop refining and has cost 350 direct jobs. Lots of those people have lived for a long time in the electorate of Lalor. This was not unforeseen, yet here we are. Despite this government's inaction, we got too little too late. It has meant not just the closure of Mobil in Altona but also the closure in Kwinana.

When this sorry affair began, this time last year, we had four refineries operating in this country and we're now down to two. We have seen the closures of major refineries. Despite that Senate inquiry, it took the government three years, until 2018, to even announce they would do the review, with a due date of late 2019. Fuel security and the job security of thousands of refinery workers, like anything else with this government, gets a call-up only when there's a bad front page. The interim report on liquid fuel security was delivered to the government over two years ago, in April 2019. The government still hasn't released the final report. It was due in 2019. This is a government that has delayed and neglected the basics we need to keep the country running.

Even when there was action taken, the government were in such a desperate state that their failure to act meant that we were not meeting our requirements to have 90 days of domestic fuel stocks. We have got to the point now where we have 58 days. We're still 32 days short of the 90 days required. It's about fuel stocks and our being able to keep this country moving, but it's also about industry and local jobs in my electorate. This government's inaction means that Qenos, operating in Altona, have closed parts of their operation in Victoria, which has cost 150 jobs.

I can't stress this enough. I grew up in the electorate that I serve. I went to school with kids whose dads—it was generally dads at that time—worked at Mobil or at Qenos. They worked in refining and petrochemicals. They were good jobs. They built homes. They fed families. They kept a roof over people's heads. There are some people in my electorate who are the third generation of young people working in the petrochemical industry in the western suburbs of Melbourne. We know today that those people's children will not have those good operator jobs or be engineers in these industries, because of the eight long years and the failures of this government, and those opposite have absolutely ignored that. I had to sit here and listen to the member for Ryan talk about the fabulous jobs in oil refining in Brisbane. He is completely oblivious to the fact that we've just lost hundreds of jobs in Melbourne. We've lost them: engineers, operators, tradesmen and electricians. They are all out of work because of the failure of this government to do its job. It is an absolute shame that we have to stand here today and do this.

We support this legislation and, as the member for McMahon said, we support the notion that the refining industry needed support, but it needed it prior to now. It needed it before Kwinana and Altona closed. We are now left with two refineries in this country. What this government's failure to act on energy means for manufacturing in Victoria is extraordinary. We've got petrochemical industries operating there which, down the chain, so many industries are reliant on, including agriculture, water and road building. Those opposite have left the country at risk. Once those jobs in Melbourne are gone and once the jobs down the pipeline in Melbourne are gone it will mean that we are importing more products into this country when we should be manufacturing products for ourselves. And let's not get started on what the pandemic taught us.

The pandemic taught us very loud and clear that we are in at the end of the global supply chain, so the risks, we're now aware, are much deeper than we might have thought eight years ago. But now we're putting at risk not just our capacity to refine and to create skilled jobs but our capacity to keep other industries going onshore in this country, particularly in Melbourne's west, which has taken hit after hit since this government was elected. There were Toyota and Mobil, and now Qenos is closing parts of its operation in Altona. It's a shameful history. The member for Hume, who supposedly gets this, fails to act. Understanding is one thing, Member for Hume; action is another, and you have been too late to this party. You are too late for Melbourne's west, too late for the families in my electorate who were relying on those jobs, too late for the young people in my electorate who might have aspired to those jobs, too late for the apprentices they might have trained and too late for the supply chains further on to be able to continue to buy Australian products into their manufacturing, which also is further at risk.

I want to go to great pains here because, like the member for Gellibrand, I have met with many of our petrochems locally over the years as a representative here, and there's an important time coming right now. There may be those who think that this fuel security debate has nothing to do with an Australia with a renewables future, but it really isn't that simple. Part of a cleaner economy and a greener world will come when we're at the position where we can undo the chemistry that goes into plastics creation. The experts in this area tell me the world is on the brink of finding that chemical answer. If our petrochem industry isn't here when that happens, we'll have missed another opportunity to be part of the global solution. We'll be shipping plastics offshore again for somebody else to recycle, rather than building that capacity in this country and being part of the solution.

The clock is still ticking for this government in terms of energy security and ensuring that manufacturing can continue in this country. Despite the unedifying position we find ourselves in, where late last year the Prime Minister and the member for Hume were hailing their 'terrific fix' for our fuel security and for refining in this country, we found two refineries closed—all those skills, all those workers, all our capacity—and the creation of a reliance on other countries to provide us with what in manufacturing terms are staples. The government went out and had a photo opp—the Prime Minister, the member for Hume—to say, 'We've fixed it.' Yet we find ourselves here today looking at the legislation that we should have been looking at during the past eight years. Today it is too late for those workers I represent in the electorate of Lalor, it's too late for the families, it's too late for those industries and it's too late for us to rebuild our refining capacity, and it puts us at risk every day.

So, although Labor supports this legislation, we do have to make the point that it was too little, too late and that this legislation should have been here a long time ago. There should be absolutely no surprises for the members of the government, so it is a shock to me to listen to the member for Ryan speak today on this legislation, because it smacks of the absolute lack of understanding of those opposite on the importance of secure, permanent jobs. We are postpandemic, in a situation where recovery is potentially very patchy, and I don't think people opposite understand that either—that for all the good news in some suburbs, there is bad news in others. The 500 jobs lost in the west of Melbourne won't be replaced with permanent, secure, well-paid jobs that would build a home, feed a family, educate a family. That won't be happening.

The loss is felt very deeply in my community, because it's loss upon loss upon loss, and eight long years of a government that has no plans for jobs for Melbourne's west, no plan for secure jobs anywhere, and no plan for manufacturing in this country—absolutely no plan. As the member for McMahon said, we can look to renewable energies, which are linked to the notion of electric vehicles. And we remember the last election campaign, where the Prime Minister decried—and those opposite ran a campaign deriding—the notion that electric vehicles would be coming to Australia and suggested that electric vehicles are somehow an inferior product that won't tow your boat and that will wipe out weekends. This is what's important for those opposite to understand, and for people in the community to understand—because I know that even in my community there are those who say, 'Well, if the refining stops, that's good; we'll all go to electric cars.' That transition will take time. It will take a long time. In most cases, it will probably be those on the least income who will be last to afford the electric vehicle; therefore, those people need price security around the petrol that they're putting in their cars now.

So it isn't an either/or comparison and we are a long way from not requiring petrochemicals. We are a long way in so many areas from being able to create things using clean energy that this is not an either/or scenario and it is important people understand that we still need these industries. I certainly don't want to see the plastics industry only operating out of Sydney, the refining only operating out of Brisbane and Geelong. Because one of the other side effects of Mobil closing in Altona is that there were pipelines there into the petrochemical sites in Altona that will now be relying on truck transport from Geelong. So, for every good thing, there's a bad thing. I reiterate that Labor supports this legislation but we decry the fact that it has taken so long and that this government delivers too little, too late.

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

I rise today to speak on the Fuel Security Bill 2021. This incredible commitment by the Morrison government not only locks in Australia's sovereign refining capability and our long-term fuel security; it backs local jobs for local families in my electorate of Bonner. The Morrison government is taking strong action to support the Australian economy and is ensuring our critical services can keep running. The bill includes two key measures of the Morrison government's fuel security package—the fuel security service payment and the minimum stockholding obligation.

Fuel is crucial across the economy and, through these two key measures, this bill will champion our fuel-dependent industries—our truckies, our tradies, our farmers, our commuters, our miners and of course everyone who travels within Australia. This bill will help secure our sovereign fuel stocks and back local jobs and this bill will protect families and businesses from higher fuel prices, ensuring that Aussie families can keep more of what they earn.

Australia continues to lead the world in our comeback from the COVID-19 pandemic and we aren't slowing down. Our Prime Minister has made a commitment to maintaining a self-sufficient refining capability in Australia, a commitment that has been applauded by the fuel industry and by peak industry bodies. Locking in Australia's fuel security will deliver benefits for all Australians. Traditional fuels will continue to be the dominant fuel source for transport beyond 2030. We cannot be complacent about fuel security because of this.

The Fuel Security Bill supports the Ampol refinery in Lytton in my electorate of Bonner and Victoria's Viva Energy refinery in Geelong. This bill will lock in these refineries until 2027 and safeguard levels of key transport fuels through the minimum stockholding obligation measure. This is critical for our farmers, our emergency services, our truckies and our industries who rely on diesel to keep Australia moving. Without the passage of this bill, it is likely Australia's remaining refineries would close within the next five years. Between these two refineries, this would mean losing 1,250 direct jobs and that's 1,250 families. It would mean forfeiting 1,750 new construction jobs. The fallout would have a devastating impact on jobs in all fuel-dependent industries. The ramifications would be catastrophic for our local economy. That's why I was extremely pleased to welcome the Prime Minister and the Minister for Energy and Remissions Reduction, Angus Taylor, to Bonner for the announcement of this bill recently.

As part of the fuel security services payment measure, the refineries will be paid a variable production payment. What this means is, if there was a time either of these refineries was not making profit, they would be supported. It means our taxpayers are only supporting the sector when it is needed. On a local level, this support equates to 550 direct jobs in Bonner—550 highly skilled workers who can keep their jobs—and over 500 indirect jobs as well. The flow-on effect of this certainty in the local community cannot be underestimated. This is a government that is backing jobs.

When I joined the Prime Minister and Minister Taylor on a tour of the refinery, we walked past a worker who was holding up a handwritten sign which read, 'Thank you for supporting our refinery.' I was beyond humbled to read this, because this is exactly why we do what we do. These are real people—people with families and loved ones and people with passion for their work. These are people with incredible skills, which we absolutely must harness to ensure our sovereign capability. Ensuring our sovereign capability is essential. It means that we can prepare for any crisis and protect our families and businesses from higher prices at the bowser. This is where the minimum stockholding obligation measure of the bill comes into play. The Australian fuel market operates on a near just-in-time basis and is heavily reliant on global supply chains operating under normal conditions. Yes, this helps keep operational costs low, but it means the market is less prepared for disruptions. Implementation of the minimum stockholding obligation will provide certainty to fuel consumers that there is a baseline level of liquid fuel available in Australia at any point in time.

I say again: locking in Australia's fuel security will deliver benefits for all Australians. Fuel is what keeps us and the economy going. That is why the Morrison government is backing our refineries, and that's why the passage of this bill is essential.

Matt Keogh (Burt, Australian Labor Party, Shadow Minister for Defence Industry) Share this | Link to this | Hansard source

Back in 2011, Australia had a liquefied fuel reserve well over the 90-day International Energy Agency requirements, but, over the last 10 years, Australia's seven fuel refineries have dwindled down to just two. Three years ago, with Australia's reliance on imported fuels increasing and about 45 tankers on their way to Australia every day, the Turnbull government announced that it would start meeting its IEA obligations through stockholding agreements with foreign entities—for example, that fuel being available offshore. Concern was felt by many in this parliament that this approach was leaving Australia vulnerable to supply chain shocks. COVID-19 has demonstrated that such supply chain disruptions are not just a theoretical possibility.

Unfortunately, the solution offered up by the Morrison government was to acquire fuel reserves stored in the United States. In September last year, the Prime Minister and his energy minister, Angus Taylor, announced that they would design a system for a production payment that would recognise fuel security benefits, improve our sovereign onshore refinery capability and secure the viability of that industry. Of course, this followed because, after the United States solution, Australians were concerned that that would be entirely ineffective. To quote him directly, the Prime Minister said:

Fuel security underpins our entire economy. Not only does it keep Australia moving, the industry supports thousands of people across the country and this plan is also about helping keep them in work.

Like all sectors of the economy, the COVID-19 pandemic is having an impact on Australia's fuel industry. The events of 2020 have reminded us that we cannot be complacent. We need a sovereign fuel supply to shield us from potential shocks in the future.

I couldn't agree more, but the government's proposal was already being criticised as too little too late. With an announcement by BP Kwinana, Australia's largest refinery, that it was due to close shortly thereafter, it was quite literally too little too late. It was all photo-op, no follow-up—in fact, it didn't even get there in the first place.

This isn't a new issue. Menzies identified the importance of sovereign fuel supply all the way back in 1949. He said:

In truth, petrol is vital to Australian production and transport. Having regard to our vast area, distances and needs, it is more important here than in most other countries of the world.

The recent announcement from this government in relation to the legislation before us today, the Fuel Security Bill 2021, means that Australia will be able to retain the capacity to produce its own fuel, which is absolutely critical for our national security. We've only got two refineries left. It's not even close to being satisfactory. The closure of refineries has had a huge impact on local economies, our national economy, national security and our way of life. The funding in this legislation seeks to maintain our remaining two refineries until at least 2027. While welcome, it will not combat the issue completely.

In May this year, following an announcement for additional support for fuel refineries, the Australian Workers Union released a statement:

It's extremely disappointing to see so many refineries close in the past decade—including BP Kwinana, and ExxonMobil in Altona, in just the past 9 months.

They went on to clarify that, yes, indeed, if the government had acted sooner, these closures could have been avoided. Dan Walton, the national secretary of the AWU, said:

Importantly for the national interest, the ongoing viability of our refineries mean the skills of highly specialised technicians will be preserved—skills that will be needed—

moving forward in our energy mix. He went on:

Being able to make our own fuel is a critical sovereign capability. Without it, our national and economic security are completely at the mercy of trade routes that are threatened by potential international conflict or—

as is now all too familiar to us all—

pandemics.

We've already seen supply chain disruptions through COVID-19 and vaccine nationalism. There is no doubt that, if push comes to shove, other nations will restrict fuel exports to us if they need that fuel. But it's not just about supply, it's not just about jobs, it's not just about the economy, but it's about our national security, our sovereign integrity and our ability to look after ourselves.

Retired Air Vice-Marshal John Blackburn AO has been very vocal on this matter, criticising Australia's approach to ensuring national liquid fuel security. I tend to agree with him. It seems the member for Canning, now the Assistant Minister for Defence, agrees too. In 2018, when he was the Chair of the Parliamentary Joint Committee on Intelligence and Security, the member for Canning told The Australian that 50 per cent of our imported diesel and 60 per cent of our jet fuel comes through the South China Sea. He said, 'That leaves Australia very vulnerable to coercion through a disruption of our liquid fuel supply'. That same year, the member for Canning said, 'You can have the best military in the world but it's futile if you can't fuel it'. The member for Canning and I disagree on many things, but we completely agree on this.

The COVID-19 pandemic has exposed significant vulnerabilities in global supply chains. Importing more than 90 per cent of our fuel stocks means we are absolutely at the mercy of overseas supply interruptions. Our oil refineries, of which we have only two left, both in the eastern states, are very much being kept on life support. We need to think about what happens next. What happens after the 2027 guarantee? The warning signs have been there for years, but it seems we are either complacent or in denial or both. We need to approach this not just from an economic perspective but also from a scientific, a business continuity and, perhaps most vitally, a military defence approach. We cannot forget that fuel access and supply is a fundamental defence industry input to defence capability.

In recent years, this government has admitted imports are cheaper than maintaining the refining industry. But can you really put a price on our sovereign integrity? Many of the fundamental assumptions about our nation's security need to be revisited, and, with that, the assumptions that we have made regarding our supply chains and, in particular, fuel supply. The security of critical supply chains is something that can't simply be left to the market or big business. The government needs to take a leading role to ensure our nation's ongoing security. We need to ensure that we have a defence strategy and a plan to have adequate fuel security to ensure that, whatever the next crisis we encounter is, we are ready for it.

The closure of all bar two fuel refineries will leave the nation more vulnerable to a global crisis. We must safeguard our nation's liquid fuel security. The announcement earlier this year that will ensure two refineries can stay open in Australia is welcome, but, really, it only just scratches the surface. Basically, everything that moves in this country is fuelled on diesel or avgas. The WA resources industry—the one that keeps our entire nation's economy going—would literally stop without these fuels. Yet now, without the BP Kwinana Refinery, there are only five days of avgas storage in Western Australia and about three weeks of diesel. Reliant on imports, many of which traverse northern Asia, we are now without an option for refining our own from more abundant crude imports from around the globe. Remember, you cannot truck these fuels across the Nullarbor. We can have the best weapons, missiles, tanks and technology, but, if we've got no fuel to run these things, we're just providing really expensive target practice to our enemies.

Australian Strategic Policy Institute's executive director, Peter Jennings, said recently that Australia is closer to being utterly dependent on imported fuel. Surely, if we have learnt anything in the last year, it's that overdependence on just one-time supply is a massive strategic risk. In September last year the Prime Minister and his energy minister announced a fuel security package as part of the 2020 budget. Just six weeks later, BP announced its Kwinana refinery would close. In December it was announced that support payments would be brought forward to January of this year, but that still wasn't enough, with ExxonMobil announcing its Altona refinery would close in February.

Let me spell this out very clearly for the government: since this government announced their plan for fuel security in Australia, two refineries—that is, half of the remaining refineries that were left—closed. That's hardly instilling any confidence, is it? In fact, it's not even distilling any confidence. Even with the recently announced support measures, a result of this legislation we are due to pass here, Australia will remain non-compliant with our international energy obligation to hold 90 days of oil reserves. In fact, we only have about 65. We're not even getting close, meaning we will depend disproportionately on imports.

We also still don't have a strategic fleet. We are reliant on foreign owned and operated tankers to move fuel to our country. That's an absolute risk to our sovereign integrity. Our nation's fuel security should be at the forefront of our Defence, defence industry and national security conversations. We don't have another option. It's not like our Defence vehicles are running on hydrogen or are electric. Imagine what the government would say about that. If Labor's electric vehicle policy was going to kill the weekend back in 2019, then a hydro defence vehicle policy in 2021 surely would go the same way as the Hindenburg, according to this government. We need to be serious about this. We need to be backing our Aussie refineries, just as we need to be backing local jobs in our Australian defence industry and in our fuel networks. We need to be backing our national economic security and our national security. We need to be getting more Australian businesses in our defence industry to deliver essential capability that our defence forces rely on, including fuel.

In fact, fuel is an essential capability itself yet, under this government's own policies, half of the refineries in Australia have closed. What a great policy that is! This Liberal government in that context continues to bang the drums of war, but their rhetoric doesn't meet their action in supporting our defence industry, our defence forces or our sovereign fuel reserves. We need to make sure we have no capability gaps. Just as submarines not being in the water in a timely fashion will see a capability gap develop, so too will little more than a week or so of fuel supply in the nation at any given time. There's no point in having great new submarines if we don't have fuel to run them on.

We can't afford to put our nation, our personnel or our people at risk. It's not good enough for this government to be bargain hunting on fuel. COVID has proven that our friends around the world are going to look after themselves before us in a crisis situation, and we should hardly be surprised by this. We need to back ourselves and invest in our fuel supplies and our refineries and the jobs, the technology and the intellectual property that comes with that. If this industry dies out, our nation will be going nowhere on an empty tank.

Rick Wilson (O'Connor, Liberal Party) Share this | Link to this | Hansard source

Given that there is a very short period available to me, I'll just make some introductory remarks. Hopefully I'll have the opportunity to continue later on this afternoon. I rise today to support the government's Fuel Security Bill 2021. One of the key components of the bill will be a fuel security services payment, which will incentivise the existing refineries to continue production until at least mid-2027. This fuel security services payment is, in effect, a subsidy of up to 1.2c per litre, under a collar system.

David Gillespie (Lyne, National Party) Share this | Link to this | Hansard source

The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour.