Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Hansard source

I did answer a similar question from Senator Fielding last week and I will, for his benefit, simply repeat that the government have made it clear from the outset that, while we are very concerned about the impact on Australian families of the rise in the price of petrol at the bowser, there is only so much that can realistically be done—and I think that is acknowledged on both sides of this chamber—and that anything that the government could do would be at the margin. The government, like every other government in the world, are dealing with the reality of the explosion in the price of crude oil and, as Senator Fielding would know, that is a result of the very significant economic growth in China, which is causing massive and unprecedented demand for crude oil right around the world. We have the Indian economy experiencing similar growth and putting similar pressures on demand for crude oil. We had a long period where crude oil prices were relatively low and that led to a decline and a vacuum in investment in refining capacity. So you had the combination of a significant increase in demand with inadequate supply capacity. That has caused a real spike in the price of crude oil. It is not possible for any government around the world to deal with that reality other than, in reality, at the margin.

The package that we announced earlier this week I think is a very good package. One of the critical things is to ensure that there is diversity in the supply and use of transport fuels in this country. It is no good just significantly damaging the revenues of the government by putting a $3 billion per annum hole in our revenues from excise on petrol, which, of course, would have the impact of affecting demand for petrol and do nothing to encourage diversity in the supply of transport fuels. What we are doing most sensibly, I think, is encouraging that diversity. We are doing what we believe to be appropriate to encourage the use of renewable fuels like biodiesel and ethanol.

I acknowledge the enthusiasm of my National Party colleagues for encouraging the use of ethanol and biodiesel, and commend them on their sterling efforts to encourage consumers to take up those alternative fuels.