Kerry O'Brien (Tasmania, Australian Labor Party, Shadow Minister for Transport) Share this | Hansard source

The opposition appreciates the sentiment that lies behind these amendments and the concerns that Senator Fielding expresses, which are concerns held within the community, about market control and market dominance. With this legislation we are dealing with the removal of legislation that effectively capped site control. On the one hand, we have taken the cap off and, on the other, this amendment seeks to reinstitute a cap of perhaps a different nature. We also looked at the amendment in the context of the practicality of how it would operate. We have seen a reduction in the number of sites from 20,000 to about 6,000 over the last recognisable period of change in this industry. We perceive that there are a couple of problems with this approach. Let us say that there was not a massive dislocation when you put this into effect—and that is a big ask—and you did not force the closure of sites with this proposal, which is a distinct possibility. If then there is a further rationalisation, a player could find themselves holding more than 25 per cent without acquiring additional sites simply by holding onto the sites that they had.

Another concern would be that, in those circumstances, which sites would those who dominate the market hold onto? It would be the sites that were the most profitable and serviced the biggest markets. Perhaps Senator Fielding might say, ‘If you roll Senator Joyce’s amendment in with mine and you control volume as well, then we might be able to deal with that problem.’ But if you have the two limiting factors in the market and a player has to say, ‘I can’t have more than 25 per cent of the sites by number and I can’t have more than 25 per cent of the volume of fuel sold but we would determine that on a month by month basis,’ the mind boggles when you think of the sites that might have to close because volume has changed over months. I am not sure how the amendments would handle that.

I apologise to Senator Joyce for in part dealing with his amendment at the same time as Senator Fielding’s. The point that I am making is that there is a distinct problem with giving effect to the sentiment that he proposes. I am not saying that we should rule out the concept of devising a mechanism to ensure that market dominance does not completely take hold in the petroleum retail market, or whatever fuel market we ultimately end up with, given that we are talking about a model which, in essence, should go for a decade or more into the future. We have looked at the legislation and we have seen that there are some very serious practical difficulties with giving it effect.

In saying that we have sympathy with the idea that market dominance ought to be prevented, we are not certain that this is the best mechanism with which to do it. I suppose if the amendments that we all supported had been carried last night, it would be easier for us to have an expectation that the ACCC might have played a role in that. That not being the case, it is going to be incumbent on this government or a government in the future to come up with a workable solution and to work with industry on this matter.

The other concern we have is with the proposition that the legislation would compel the promulgation of a regulation which would compel an annual review, which is a somewhat clumsy way of going about it. If you wanted to require a review, why would you then ask the regulation to require a review? You would put it in the legislation. But, as we understand it, the Oilcode contains provision for a five-yearly review. We think that, if there were an annual review of the Oilcode, there would be a distinct lack of certainty in the market, given that there could be an expectation of change on an annual basis because of that factor.

So we are not comfortable with the idea that there ought to be an annual review. We were comfortable with the idea that there ought to be annual reporting, which would have given the parliament the option to accelerate the review if circumstances justified it, but to require a review on the basis of nothing other than a desire to be kept up to date with what was occurring in the market we think would give the industry the idea that the review would, almost of necessity, lead to almost annual change in the industry. I do not think that sort of uncertainty is necessary.

We are comfortable with the review proposed in the Oilcode. We would be more comfortable with a Treasurer who was keen to look at imbalances in the industry and to empower the ACCC to do the work that it can do to investigate fully the operation of that market and to report publicly, and we will continue to pursue that. Clearly the government has the majority in this place, and even if all the other senators vote together, and even if we see what occurred last night when Senator Joyce crossed the floor, we still cannot carry the amendment. So, if the government wants to proceed down this path, of course the amendment will succeed. But we think that the appropriate course of action in relation to this is that we look at the implementation of the Oilcode and we will continue to pursue the amendments to the Trade Practices Act which the Senate narrowly failed to support last night.