Mark Bishop (WA, Australian Labor Party) Share this | Hansard source

I rise, proudly, in support of the National Fuelwatch (Empowering Consumers) Bill 2008 and the National Fuelwatch (Empowering Consumers) (Consequential Amendments) Bill 2008. As a Western Australian, I believe I can speak with some authority on the intent of these bills. The reason for that is that Fuelwatch has operated in metropolitan and regional areas in Western Australia since January 2001, so we have had almost seven years of comprehensive experience of how Fuelwatch operates and the benefits it provides to consumers in Western Australia. Fuelwatch in Western Australia was introduced by the Court Liberal government in response to a select committee report. Since that time it has been supported by both the Gallop and Carpenter Labor governments and it will be maintained by the Barnett Liberal government.

So how does Fuelwatch work? At 2 pm petrol retailers are required to provide a price at which they will sell petrol the next day. At around 4 pm that information is available on a website. Fuelwatch also operates a personalised email service. On evening news bulletins, information on the cheapest petrol prices and the suburbs that have the cheapest petrol prices is listed for viewers. The information is also available regularly and readily on radio, and the next morning the daily paper also lists the daily petrol prices. It is an extraordinarily popular scheme. Why? Because motorists know what petrol prices will be for that day. If there is going to be an increase, they have 14 hours to decide whether they need petrol and to take advantage of the lower price. Consumer surveys have reported that over 90 per cent of Western Australian motorists are aware of Fuelwatch. A Royal Automobile Club of WA—the RAC—survey shows that 57 per cent of motorists use the service. Over 32,000 motorists receive daily emails on petrol prices. The point is that almost all motorists are generally aware of the range of petrol prices on any given day.

Much has been made about how supplying pricing information to motorists will lead to a reduction in competition, but that has not been the experience in Western Australia for the last seven years. Pricing information in the eastern states is available but you have to pay for it. Large petrol retailers subscribe to a company called Informed Sources, which collects information on petrol prices in defined geographic areas. Updates are then provided to large retailers several times a day. Informed Sources was not willing to disclose the cost of collecting data on retail prices throughout the day or what it charged its clients for the service. I would imagine that it is rather an expensive service. Apparently the company relies heavily on people driving from service station to service station to get the information. So what we have are large petrol retailers with information on competitors’ prices throughout the day. If their competitors are cheaper, they drop their prices. But what if their competitors have a higher price? Do they maintain the price advantage they have or do they make a decision to maximise profit? It is a fair question that is difficult to answer because petrol prices can change throughout the day.

I understand it is common for someone who is looking for the best price on their way to work to find that the same retailer is not the cheapest on their way home. Receiving updated information on petrol price fluctuations throughout the day is not an illegal practice; however, the ACCC has described it as being ‘as close to illegal collusion as you can get’. Fuelwatch, by comparison, will provide retailers and motorists alike with up-to-date and accurate information on petrol prices in their particular suburb. The information would also be available to independent retailers who, I understand, are not regular subscribers to Informed Sources. It is my understanding that independents drive around a few times a day and do their own research on local competition. However, by far the greatest advantage is that Fuelwatch will provide motorists with information on what petrol prices will be tomorrow, not what they were half an hour ago.

There is considerable merit in a national Fuelwatch scheme. The Senate was not so sure about that and referred the matter to the Senate Standing Committee on Economics back in June 2008. Unusually, the committee was told not to report until 29 September 2008, and that report was tabled around the middle of October. The report properly recommended that the Senate support the introduction of a national Fuelwatch scheme. It also recommended that a review of the scheme be undertaken 12 months after its introduction and the data collected by Fuelwatch be released to independent academic researchers.

But, in what has become common practice, those opposite have chosen to issue a dissenting report. Their main opposition to the plan is that watching fuel prices will not bring them down. What an obvious comment to make. What an obvious theme to have in their report. Clearly the opposition do not understand the intent of the bills, which is to provide consumers across Australia with information on the price of petrol at each service station in the metropolitan and major regional areas every day.

The value of the scheme comes from its utility. The utility lies in the fact that every evening on each of the major news bulletins there will be 30 seconds in which the price of petrol by suburb and by retailer will be disclosed. The price will then be fixed for a 24-hour period so that we as consumers will know that, for example, tomorrow the cheapest fuel will be available from Caltex in Belmont. The utility, the drive, lies in the disclosure. Disclosure leads to price competition, price competition leads to consumer choice, and consumer choice leads to maximisation of welfare. The benefit of disclosure is that it is an aid to effective price competition. Consumers will be able to ask the most obvious of questions: why? Why are petrol prices 20c a litre higher in an outlet 300 yards away from another? Why is there a 20c a litre differential? This in turn will require responses from major wholesalers and fuel companies to justify to the public their price settings and margin settings. Again, it will assist in the elimination of hyperbole, disinformation, misinformation and outright lies about a product critical to industry and households alike. The bills will also give compliance and enforcement powers for the scheme to the ACCC.

There are many critics of this scheme. They are found only on the benches opposite. However, there is no—and I quote from the dissenting report—‘overwhelming evidence that it provides a greater certainty of higher prices’. The truth is that price volatility does not equal competition, that weekly price cycles cannot guarantee motorists get the best price if they fill up on a Tuesday and that supermarket shop-a-docket discounts have not led to a measurable increase in competition in petrol prices. I quote from the dissenting report:

The evidence also suggested that a national scheme would adversely affect the position of independent retailers, making the market less competitive.

The truth is that there is the same percentage of independent retailers in the Perth market as in other capital cities and that they are not disadvantaged by fixing petrol prices for 24 hours. Motorists and independent petrol retailers in my home state support Fuelwatch and want it to continue. And, in the Western Australian experience, the Fuelwatch scheme has received for the last seven years, with different governments, bipartisan support.

Coalition members recommend in their dissenting report that the bills be opposed. My question to those opposite is: why is it only motorists under a Liberal government that are permitted to enjoy the benefits of a Fuelwatch scheme? This is a scheme that will empower motorists to make informed decisions about where and when they fill up their cars. It will increase the reliability and certainty of fuel price information for motorists every day of the week, and it has done so every day of the week for the last seven years. It will also provide motorists with information that in most Australian cities is only available to large petrol retailers.

In summary, Fuelwatch is a scheme that was championed by the Court Liberal government in 2000. It was supported by the Gallop and Carpenter Labor governments. And in the lead-up to the last state election, barely two months ago, Mr Barnett—now the Liberal Premier for Western Australia—said he would not tamper with the existing state Fuelwatch scheme. As late as 3 October 2008, the daily paper in Western Australia reported the Liberal state Treasurer as saying that he had received advice from his department, the Department of Consumer and Employment Protection, that Fuelwatch in Western Australia was working successfully. He went further and said to the West Australian that allowing petrol stations to lower their prices on the same day to match those of their competitors would ‘undermine the integrity’ of the system. He also said:

What Fuelwatch does is provide information to consumers to allow them to make decisions as to where they buy their petrol …

That is precisely what the national scheme is intended to do, it is precisely what the national scheme wants to do and it is precisely what the national scheme, if enacted, will do. It will provide information on a website and through reports in the media on the price of petrol for the next day. It will allow consumers to identify when and where to buy fuel at the lowest price.

It is incomprehensible to argue that competition will be eroded by fixing the price of petrol for a 24-hour period. It is incomprehensible to argue that a motorist who stumbles across a retailer offering a lower petrol price at, say, three o’clock in the afternoon is participating in a competitive process. Fuelwatch will provide a competitive environment because it will allow motorists to buy the cheapest petrol at the cheapest petrol stations at the cheapest times. You cannot ask for a better scheme. There will be no guesswork involved in picking the best time and place to get the best price. Fuelwatch is not a silver bullet that will lower petrol prices, but it will ensure that drivers do not pay one cent more than they have to or one cent more than they choose to. The government has committed to a review of the effectiveness of the national Fuelwatch scheme after 12 months. I am betting that consumers across Australia will be as supportive as those in Western Australia. I commend the bills to the Senate.