Ursula Stephens (NSW, Australian Labor Party, Shadow Parliamentary Secretary for Science and Water) Share this | Link to this | Hansard source

This disallowance motion regarding the Petroleum Retail Marketing Sites Amendment Regulations 2006 relates to the government’s downstream petroleum reform package and the introduction of the Petroleum Retail Legislation Repeal Bill 2006, which has the effect of repealing the 1980 sites and franchise acts.

As part of the process of introducing the reform package, the government has made regulations to omit regulation 3 of the Petroleum Retail Marketing Sites Regulations 1981. The effect of this amendment is to suspend the reporting and compliance obligations that currently apply to the major oil companies under the Petroleum Retail Marketing Sites Act. This act is therefore effectively inoperative unless the regulations are subsequently withdrawn or disallowed. That is the context of the disallowance motion standing in the name of Senator Joyce.

Labor is supporting this disallowance on the government regulation. It has the effect of removing the four major oil companies from the scope of the Petroleum Retail Marketing Sites Act. Labor’s principal argument with the government on this issue is one of process, not substance. Before I go to the issue of substance, I want to reiterate the point that the regulation has the effect of repealing the sites act before the parliament has had the opportunity to consider the merits of the repeal bill. We on this side of the chamber see this as an unacceptable abuse of power and an attack on parliamentary democracy. Labor is very concerned about when the government might choose to use this method next: perhaps on matters of national security or immigration. Who knows? But on the substance of this issue, which is where we really do feel at odds with the government, Labor is prepared to repeal the sites act provided that the government strengthens section 46 of the Trade Practices Act to maximise competition by protecting small and independent petrol station owners. We heard from Senator Joyce this morning how important it is to do that.

While Labor and the government disagree on the scope of the amendments necessary to section 46 of the Trade Practices Act, the government has not even agreed to bring forward the amendments it said it would in response to the March 2004 recommendations of the Senate committee. When the Senate Economics Legislation Committee considered the Petroleum Retail Legislation Repeal Bill 2006, Labor senators, in our additional remarks, called again for those recommendations in relation to section 46 of the Trade Practices Act to be brought on as part of the oil code and the new bill.

Senator Joyce certainly acknowledged section 46 in his speech today, but it is our argument that he needs to do much more than support the disallowance. He must call for reform of section 46 to be included as part of the government’s reform package. I must say that on process the government has got into a mess of its own making. Despite Senator Minchin’s contribution this morning, when he tried to defend the process, the problem is quite simply that the government has had three years to reform the 26-year-old regime which regulates the retail petrol industry. Because it has been incapable of producing an acceptable model, it wants to repeal the sites act through the back door. To do so would offend the rights of the parliament and would risk putting upward pressure on petrol prices.

The government should immediately bring on the repeal bill for debate. We have asked for it, we have prepared for it and we are ready to support it—but only if we can actually see it, and the proposed oil code—so that we can see whether the government is prepared to strengthen section 46 of the Trade Practices Act to maximise competition by protecting small and independent petrol station owners. Instead, the government has sought to undermine the sites act and the will of the parliament by undeclaring, by regulation, the major petrol retailers from the operation of the sites act.

Labor cannot support this late and unilateral act, which does not provide the Trade Practices Act protection that small service station owners need. It does not even meet the need for improved Trade Practices Act protection that the government has accepted is necessary. That is why Labor is supporting this disallowance motion. In doing so, Labor appreciates this puts one of the major retailers, BP, in an unenviable position. BP has many licence agreements with small service station owners that are due for renewal. If the sites act is not repealed, BP may be forced to enter into new five-year licence agreements in order to continue supply to the motoring public. Clearly, BP would prefer not to be forced into this position in relation to some licences. But BP’s problem is entirely of the government’s making. It could have fixed it two years ago. The government’s actions in undeclaring the major petrol retailers are simply not appropriate, for both process and substantive reasons. They are not even consistent with the government’s stated policy.

Petrol market reform is about enhancing competition and putting downward pressure on petrol prices. As it stands, the government’s package could lead to the demise of many independents, a reduction in competition and higher petrol prices. Senator Joyce went to that issue very clearly in his contribution to this debate. To resolve this matter once and for all, the government should bring on the legislation to repeal the sites act and the amendments to the Trade Practices Act. Only this would give operators in the market the certainty and protection they need. The government could easily achieve this before the parliament rises next week.

Barnaby Joyce (Queensland, National Party) Share this | Link to this | Hansard source

We have heard today the debate with respect to regulations that get rid of the Petroleum Retail Marketing Sites Act 1980 and the Petroleum Retail Marketing Franchise Act 1980. A couple of clear issues have been illustrated throughout the debate. What has happened with these regulations is that the intent of a piece of legislation that has not yet been debated is about to be put into place. This Senate has not had the chance to debate the issue that there has been a regulatory change that has brought about the intent of a piece of legislation that we have not yet had a chance to see.

Going back to the issue, everyone acknowledges that the current oil code is flawed. There is no argument that the current oil code is flawed. The problem with the current oil code has been brought about by Coles and Woolworths circumventing the intent of the 1980 act. However, there is nothing in this regulation or the proposed legislation that deals with the fact that Coles and Woolworths have circumvented the intent of the act. We have basically found the people who have broken the intent of the act and let them off the hook. We have done nothing to actually address the problem. Instead, in some obscure piece of logic, rather than addressing the problem we are going to affect an innocent third party in this: the independent branded and franchisees, the mum-and-dad operators. They are going to have to suffer the slings and arrows of the fact that Coles and Woolworths have circumvented the intent of the act.

The intent of 1980, when the coalition government initially brought in this piece of legislation, is still as good now as it was then. The world has not changed that much in 26 years. The government’s intent then was to keep wider participation in the retail market to prevent vertical integration. And now we are about to bring in a piece of legislation that is going to bring a narrower participation in the retail market and create vertical integration. I do not see the logic of how we have managed to do that complete 180-degree turn on what has always been a strong small business intent.

A lot of people have had to deal with the bluff of the major oil companies. We have had the major oil companies saying, ‘If this doesn’t go through, we’re going to pull out of Australia; the world will collapse.’ I think that is a load of rubbish. They have been doing very well for themselves and they will continue to do very well for themselves—and we want them to do very well for themselves. But it is a sign of the sorts of tactics they use, the standover tactics: ‘You’—that is, the parliament of Australia—‘will do this or else.’ I take with a grain of salt the predictions by one oil company in particular, which said to my office that they had an intention, if this did not go through, to leave Australia. How ridiculous is that?

I also acknowledge that in the National Party we have a clear intention to try to get ethanol out into the market. Everyone clearly states that, if this goes through in its current form, it is going to be an inhibitor to getting ethanol out into the market. Getting a biorenewable fuel alternative out into the market that basically makes Australia a benefactor of the biorenewable fuel industry rather than a casualty of it will be affected by the fact that the independents are not in the market. They will be under undue pressure because of this, because all of a sudden you are going to have the supplier of the independents’ product also being a competitor in the retail market. We have some obscure belief that somehow their major competitor is going to look after them. Of course they are not. As soon as they prove themselves a viable threat, they are going to put them out of business. Since the Boral case and the running down of the predatory pricing laws, they have every ability to do that. That is another issue that connected to this.

I agree with Senator Bartlett and Senator Stephens that we should be dealing with section 46 of the Trade Practices Act. That is a big issue and it needs to be brought forward. It is a protection for small business. There is a government approved form of section 46. It has been there since 2004. It is just languishing; it is just sitting there. That piece of legislation should be enacted. It should be brought forward. I do not think even the oil companies would have a problem with that. If it were brought forward, we would have a mitigating circumstance that would allow a more relevant roll-out of this piece of legislation.

But this regulation is all one way. The way it goes, it is all in the favour of the incumbent oligopoly of the four major oil companies and Coles and Woolworths. Cole and Woolworths are, by default, Caltex and Shell. Sometimes they pose; Caltex and Shell will say, ‘We can’t do anything about Coles and Woolworths.’ Of course not! They are moving so much product through them that they do not want to do anything about them. They have managed to get about 52 per cent of the retail market in fuel, which links up with their control of the retail market in a whole range of other fields. Of course they are quite happy to move that product.

Then they put their hand on their heart and say, ‘We will deal with ethanol when it has a competitive advantage.’ The fact that ethanol is at about 80c at the terminal gate price and fuel is at about $1.40 does not seem to strike a chord. Of course there is an absolute competitive advantage of about 60c a litre to get ethanol out into the market, but they do not want to do it, because it does not fit their corporate plan. It does not fit their plan to roll out an alternative product to the product they are selling and they control from the oilwell to the bowser.

One of the main mechanisms that we have to do it in this nation is the independents. A clear example of that is here in Canberra. Four sites sell ethanol. Three of them are independent. And what are we going to do? We are going to pass a piece of legislation that those three independents say will work directly against their future in the market. We are passing a piece of legislation that does not promote ethanol; it inhibits it. You cannot say you want to promote a product if you are trying to get it off the market by taking away your mechanism of retailing it. That is another issue. The major oil companies’ move to not be proactive in pushing for the government’s policy of getting a biorenewable fuel industry off the ground will be enhanced because of the continued enactment of this regulatory instrument.

We have heard a lot today that there will be a strengthening of the lease agreements for these new franchisees and branded operators. But of course that avoids the crucial issue: that is only if the oil company chooses to renew them. It is like me saying to you: ‘I’m going to offer you a great deal on the lease of your house, if I choose to lease it to you. But, when there is a commercial advantage of me not leasing it to you, I’m not going to do it.’ The oil companies are not going to be renewing leases if they can make a greater margin out of operating it themselves. But, in these three by three by three year leases which have been talked about today, at the completion of that term they have two choices: to take over the site and operate it themselves or to lease it on to someone else under these new leasing arrangements.

That is the choice, and they can choose not to renew it. They can choose just to say: ‘We’ve thought about it. We don’t have to pay you anything for it. You’re out of there and we’re in there tomorrow.’ There is no protection against that. There is no mitigating measure against that. The protection in the past was exactly this regulatory instrument. They had to deal with it. They had to get their product moving. To get their product moving, they had to have the sites out there, and they were not allowed to own more than five per cent of sites. Now they are allowed to own the whole lot. There is nothing stopping them. The reason they are so absolutely enthusiastic about getting this through, and I know they have been lobbying in the corridors here flat out, is that that is exactly what they intend to do—take over these sites.

Who is going to suffer from that? In the short term it is going to be the mum-and-dad operators, the small businesses that we in this chamber are supposed to represent. They are the people that we are supposed to be looking after. They are the people who do not have the capacity or the lobbying ability to gather together in big numbers; put together a huge budget to come here and knock down every door; be the benefactors, if they have to be, of political parties; and do whatever else to achieve their objectives. Mum-and-dad operators do not have that capacity. What they have is the hope and the sense of goodwill that this place will protect their interests. That is not going to happen with this regulation going through.

We are going to make a clear statement today with this regulatory instrument about whether or not we believe there should be a protection for the smaller operators in the Australian market in general. There is no section 46 to go hand in hand with this. There is no section of the market that is going to be quarantined either volumetrically or by site numbers for smaller operators. It will be a further inhibitor on rolling ethanol out, yet we say that is what we want to do. I do not know how we are going to do it. Twenty million litres a year—that is how pathetic it is—is what the major oil companies have managed from 2001 to now, the year of our Lord 2006. They are managing to put 20 million litres into the fuel that we utilise. Their target is 350 million litres by about 2010. They are actually going down; they are not going up. They are putting less out, not more. They are going backwards in achieving their objectives. Even 350 million litres is only 0.7 of one per cent. It is so small. It is three-fifths of five-eighths of very little at all.

How are we going to try and deal with that? We are going to force them by giving them greater power to not achieve the objective that the Australian government has asked them to achieve. It is going to be interesting. In the future we are going to have major arterial roads with strangulated sites. That means sites on both the left- and the right-hand sides of the road owned and financed by the major oil companies. They are going to have the capacity to move huge volumes of fuel and they are going to have a close proximity to the refining capacity. It is a very efficient way to move the product. The purpose of the retailing arm is to move product. The margin is not made in Australia; it is made overseas. The purpose of the retailing arm in Australia is to move product. So you are going to have strangulated sites on the major arterial roads, and that is going to lead to the most efficient utilisation of refining capacity. There are no intended new refineries in Australia, so the refining capacity will have an absolute horizon of product that they can move.

When they move that refining capacity to the strangulated sites and the major sites they will own and control themselves, you will be left with other remote regional sites which will be very much at the bottom of the pecking order. There is nothing in this about guaranteeing supply. If they say they do not have the product, that is it—they do not have it. And they will probably be telling the truth—they will not have it. They will have utilised it in their own sites. They also, by the way, have a way of getting around that. They have categorisation of product. They have branded product for themselves and other product. Once the other product, which goes off to the independents, is out, that is it; it is game over. So you are going to have small town operators which they always had to rely on the past to get product out basically being left with a completely unaffordable product, which means they cannot pick up the passing trade, which means they are not a viable concern, which means they close down. When they close down, that is yet another service that gets removed from these areas.

I know this is an issue that does not ring bells. It is not going to claim the collective psyche of the Australian people like other issues. It is maybe a little bit dry. But the issue comes down to this—it will affect us all in the long term. In the long term, once there is vertical control, not only will you extract a greater margin on the product you sell—that is, not only will you put up the price of fuel—but you will have a commercial and corporate obligation to do exactly that. You have an obligation to get the best return for your shareholders. So, if there is the capacity for you to raise the price, that is exactly what you are going to do. Of course that is exactly what is going to happen here, and it is exactly what happened in the UK. But we all think there is something remarkable about Australia: ‘No, it’s not going to happen here. It happens everywhere else but it won’t happen here.’ Of course it will happen here. Look at the history and ask, ‘What was one of the greatest mechanisms of forcing a reduction in prices?’ Lo and behold, it was the independents. What are we going to do? We are going to take the independents out of the market.

In the short term it always comes to back to this: the purpose of the economy is not to create the lowest price product for the end consumer, but that is a consequence of a good economy and it has happened here; the purpose of the economy is to create the greatest connection between the wealth of our nation and its people. It does that primarily through small business, primarily by giving the people of Australia the ability to buy and sell a product in a retail fashion, and that is being lost in this nation. We have 73 per cent of the retail market controlled by Coles and Woolworths. They are the largest outlets for liquor, the largest holders of gambling licences and the largest retailers of fuel. These are two organisations. This is also an exacerbation of that process.

It is an issue that might be dry, it might be about a regulatory instrument and it might not have claimed the Australian psyche, but it is extremely important to where we go as a nation. We have heard, and I agree, that this would never be tolerated in the United States; there is no way in the world. They have antitrust legislation. The bastion of free market democracy would not tolerate this. We would, but they would not, and there is a reason for that—they believe that the American people have a right to participate in the wealth of America. It is fundamental. If you read Jefferson, he will tell you all about it. But we are moving away from that.

So there are other sides to this debate beyond the dry and dogmatic, beyond saying: ‘This is just a change in a regulatory instrument. It does not mean very much. It’s not that important. I don’t know what Senator Joyce is banging on about.’ There is a clear outcome for this and a clear reason. In this chamber we have to grab the agenda for small business again. We have to recognise the fact that they are not going to be knocking down the doors of this place. They do not have the capacity to do that. Today the Motor Trades of Australia body passed a unanimous resolution with the 130,000 members supporting that we find some protection for them, supporting that this regulatory instrument in its current form is a bad outcome for them.

It is interesting where the inspiration for this came from. I remember during the first campaign driving up the road at Gin Gin, I think it was, near Bundaberg, and stopping at a small petrol station to grab a sandwich. We introduced ourselves to the owners and said g’day to them—trying to collect their votes, as you all know you try to do. The owner almost jumped the counter just to explain the absolute frustration of his life, the fact that the corporate service station up the road was able to sell fuel at a price he could not possibly buy it at. Yet this is supposed to be a free market, an unregulated market. They were being forced out of a job. I thought about that. You can just walk out the door, think, ‘I’m not going to get his vote,’ and forget about it or you can try to follow the issue through and try to progress the issue. You can have it stored in the back of your mind that this is something that, if you ever got the chance to deal with it, you would deal with. Today is the chance to deal with that issue. I imagine I am going to fail, but the point is you give it your best shot and have a go.

I suppose it will come down to the vote. I implore people just to think about this. Think about this if you think about regional towns. Think about this if you think about small business. Think about this if you think about how our nation is developing—whether we are disenfranchising the Australian people from the wealth of their own nation, whether we are creating the overcentralisation and greater corporatisation of our nation, whether we are creating a mechanism where we are all going to end up as middle managers in business but never owning the business, whether we are creating a nation where what you achieve in life is to go up three or four floors in the building in which you work but you are never going to own the building. If you want to own the building then you have to create the environment for small business to prosper.

My colleagues, that is the issue and one item that we need to address. If we had section 46 on the table, then I suppose you could let this through. But it is not on the table. There is no prospect that we can see for that coming out. We are having the agenda run by people who are not in favour of small business.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

by leave—I apologise to the Senate for missing my place in the speakers queue. I would just like to congratulate Senator Joyce for the effort and research that he has put into this disallowance motion. The Greens support the position that he has put, and we do so for a number of reasons. The first one, which is highly significant, is in terms of procedure. It is totally inappropriate parliamentary procedure to bring in regulations before the parliament has had a chance to deal with the legislation that will govern petroleum retail into the future. It is bad process.

It was interesting to me that, in the energy efficiency opportunities consultation process, big business—the 200 largest energy users in the country—were not prepared to see the legislation come into the parliament until they had seen the regulations. But here, when the boot is on the other foot, big business is very happy to see the regulation come in before there has been any debate on the principle concerning the repeal bills and the proposed oil code. I am not prepared to do that. I think it is grossly unfair to small business in this country that we would have a situation where regulations pre-empt the decision of the parliament, because nobody can know at this point what the decision of the parliament is going to be. Secondly, the effect of this regulation would be to remove the four major oil companies from the provisions of the Petroleum Retail Marketing Sites Act, as I indicated, before the legislation and regulations are in. I understand why they want to do it. I understand that the entry of the supermarkets has created a perverse effect with regard to the petroleum retail industry. But that is not an excuse for dealing with the situation in this way.

The Greens will consider the repeal bill and the proposed oil code in the future provided that the government strengthens section 46 of the Trade Practices Act so that there is clear evidence of the way in which the government intends to protect small and independent retailers. We certainly take the point that, as Senator Joyce has outlined and as the Motor Trades Association has said, the service station operators looking at the proposed code as it now stands believe it is defective because it will not ensure a level playing field allowing small service station operators to be able to compete fairly in the market with the large supermarkets and oil companies.

Finally, I support Senator Joyce’s interest in maintaining a distribution network for alternative fuels into the future. He is right in saying that independent operators are our best hope in that regard. We know that 61 per cent of greenhouse gases are generated from the transport sector. I think there is a very important role for alternative fuels to play, not only in rural regeneration and jobs but in meeting our greenhouse gas emission targets. I am as keen as anyone to see a distribution network maintain jobs in rural areas and for small businesses to maintain their position in the market.

To that end, the Greens support the disallowance. As I indicated, we will consider the repeal bill and the proposed oil code into the future, because we certainly do not like the fact that the supermarkets have 73 per cent of the market. The situation as it is is unsatisfactory. We do want to support small business. We do want to support the roll-out of alternative fuels. We want to make sure that fairness is the principle that operates and not just effective competition for the majors in the retail petroleum trade.

Andrew Bartlett (Queensland, Australian Democrats) Share this | Link to this | Hansard source

I would like to seek leave to speak to the matter. I was also caught by an unanticipated collapse in the speakers list.

Leave granted.

In other circumstances I possibly would have let things slide, but I did particularly want to put a few things on the record from a personal point of view and specifically as a senator for Queensland. I also am prepared to support this disallowance of the Petroleum Retail Marketing Sites Amendment Regulations 2006 (No. 1), although not for all of the same reasons that have been put forward by Senator Milne and Senator Joyce. I think there are other factors and I take a different view on some of the issues involved in this matter.

It is a difficult issue and it is, as I think Senator Stephens said, a situation of the government’s making, and it is an unfortunate one where we have regulation in place in anticipation of legislation repealing the Petroleum Retail Marketing Sites Act but the bill to do that is not before the Senate. It is still before the House of Representatives and indeed, as I understand it, it is not even likely to be debated by the House of Representatives before the parliament rises next week.

I could see the rationale if there were a range of leases coming up. A brief exemption from the cap under the existing act in anticipation of the bill being debated might then be tenable because it does put BP—and it is predominantly BP we are talking about—in a difficult situation. It is the only oil major at the moment, as I understand it, which is operating at the cap of allowable sites under the existing act. But when the legislation is so far off in the distance it does make it difficult. You basically have a regulation that negates the existing law indefinitely. If there was a sunset clause in the existing regulation, then it may be more acceptable. We would all know how long we had before the legislation had to be debated. But there is no sunset clause. That is a serious problem that the government themselves have created.

The fact that this regulation exempts or makes the existing act not operational in respect of the cap has an extra problematic aspect in that the oil code is not operational as yet. That has not been gazetted so even the protections, such as they are, under the new oil code—and there are a range of opinions about how effective the new oil code may be—do not apply as the new oil code is not yet in place. That also creates a problem, particularly in terms of the very serious issue of subverting the will of the parliament, even if it was the parliament of the 1980s that passed these acts back in the Fraser era.

Nonetheless, I want to indicate that I also support the intent of my colleague Senator Murray and Senator Joyce—and others who have mentioned it—about the desirability of bringing on some of the changes of the Trade Practices Act that were reflected in recommendations of a previous Senate committee report—recommendations that were also supported by government senators. The committee was chaired by Senator Brandis as I recall. I believe the government have indicated their preparedness or their support for a number of those recommendations—indeed most of them—but as I seem to find myself saying repeatedly in this place about a range of issues, it is one thing to say you support a matter and it is another thing to actually do something about it. We have not seen any sign at all of movement from the Treasurer’s office about any changes coming forward. It is a problematic situation when we have a regulation that links to an act that has not appeared, which in turn relates to concerns that many in this place have regarding recommended reforms of the Trade Practices Act which also have not appeared yet. Unfortunately, these are not all coming together at once. They are coming together in different stages and we cannot see what the final total outcome might be. That is the reason it is appropriate to support this disallowance at this time.

However, I want to say a couple of other things. It is important to emphasise the role that the major oil companies can play and, indeed, to some extent are already playing in the roll-out of alternative fuels—biofuels and ethanol. I do not believe that it will be a range of small independent operators that are likely to be able to really break the back of getting ethanol or other biofuels into the market in a big way; it will need to have the involvement of one or more of the major oil companies. As I mentioned before, it is BP that is affected by this regulation. It also happens to be BP that has done the most that I am aware of—I am not saying that others have not done anything—in relation to producing and rolling out ethanol in recent years. In my own state of Queensland, BP has a refinery in Brisbane at Bulwer Island and BP also owns a significant number of sites in Brisbane, where I live. While I appreciate the importance of having competition in regional areas and the importance of trying to maintain petrol prices that are reasonable, it is also important to have an effectively operating market in the major cities as well. It does need to be acknowledged that if major oil companies want to go further, and BP for example wants to take biofuels further, then market reform is likely to be essential for them to be able to do so.

The Democrats have a record as strong as anybody in supporting small business. But the fact is that small business and independent operators in the petrol station field have been declining dramatically under the existing system for many years and they are particularly being crunched at the moment, as we all know, by Coles and Woolies. They are doing that in conjunction with some of the other major oil companies who have basically just gone around the existing act. The fact is the existing act’s time has passed us by. The market has changed so much that the act is not functioning. Ironically, it is allowing people like Coles and Woolies to exert unfair competitive practices and preventing the oil companies from providing competition to those retailers. Coles and Woolies are doing quite well on their own in eliminating independent players from the market wherever they think there is a market opportunity to do so; where they do not, they will leave them alone.

So a huge decline in the number of independent retailers has occurred under the existing system. It is likely to continue to occur wherever there is an opportunity for the major retailers to maintain pressure on them. Whether or not you have one or two more oil companies, such as BP, in there is not likely to make any difference. I do think it is important that independents have a level playing field, and the existing system does not provide that. That is why Trade Practices Act reforms are important and, I would also say, why a good oil code—I will not pass opinion on whether the oil code that is coming in is good or not—is important.

I have heard all the talk about small retailers and independent retailers being important to maintain lower petrol prices. If we are talking about protecting small retailers and doing everything we can to keep them in business no matter what, then—sorry to suddenly sound like an economic rationalist—it will probably actually mean higher petrol prices. That may be a good thing from an environmental point of view, I hasten to add, but I do think we need to be realistic about what the impact of what we are doing will be.

I did want to indicate that wider aspect of the debate, particularly because the regulations do specifically affect my own state of Queensland quite significantly. I know that Senator Joyce, along with the Democrats, has been pushing biofuels and ethanol very strongly. Indeed, I have to say the Democrats have been doing so for much longer, going way back even before I was in this place to the early 1990s, when very significant initiatives were introduced, because of agreements reached with the Democrats, to provide assistance to starting up ethanol in this country—assistance, I might add, that was completely annihilated by the Howard government when they first came into office in 1996 and totally undid that work. Now we have to start up again because of the actions of the Howard government, having lost 10 years and, as Senator Murray said, with $25 million down the drain. We lost a significant start-up in developing an ethanol industry because of the Howard government’s actions 10 years ago. So our record on biofuels and ethanol is second to none in this place.

I do believe that the major companies have a significant role to play in expanding the use of biofuels. This is not a promotional spiel for BP, but BP have not just made nice sounds about this but done something, unlike the Howard government. They have developed a roll-out of ethanol. They have already sold significant amounts of their E10 blend, through their own service stations in Australia. If they are able to roll that out through a larger number of stations through market reform, then that will lead to an expansion of the availability of ethanol. BP have also—and this is already on the public record—announced that they will be creating biofuels at their Bulwer Island refinery in Brisbane. It is a biofuel made out of tallow, so it actually creates a bit of a problem for me as a vegetarian: I do not like the idea of pouring dead cows into my petrol tank. I will not get into an argument about what should and should not be defined as a biofuel, but this is nonetheless a biofuel: it is renewable and you can put it in a tank and run your car on it. Vegetarians around the country will have ethical crises as a consequence, but that is another matter.

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

It puts a tiger in your tank!

Andrew Bartlett (Queensland, Australian Democrats) Share this | Link to this | Hansard source

A dead cow in your tank is not quite a tiger, Senator Murray, but I suppose it is getting there! So, significant amounts of biofuel are being developed at the Bulwer Island refinery in my home town of Brisbane. The CSR refinery at Sarina, near Mackay in Queensland, has a significant ethanol contract, as does the BP plant in Perth, which happens to be in my colleague Senator Murray’s home state.

Again, on a side issue, BP is the company that has produced Opal fuel, which is a very effective replacement fuel for remote communities to combat petrol sniffing. There are also market risks and price risks involved in developing that fuel, and there are cost issues in expanding its production. You cannot divorce those factors from the constraints that are placed on BP by the current inefficiencies of the existing sites legislation.

I say all that to put the debate in a broader context and to signal to others who, like me, have an interest in increasing the use of biofuels and ethanol, particularly in Queensland, that there is a direct link between the major players, who have to have a role in that, and current laws, which actually impede that. There are also related issues, as I stated at the start of my speech, such as the lack of progress with regard to Trade Practices Act reform. That is a much wider issue than just assisting small business and independent operators of petrol stations; it is important across the board. I completely understand and support the attempt to use this legislation and this situation to try to increase the pressure on the government to back up their words by taking some action for a change in this area—action for which there is widespread support and, I might say, almost universal support, at least verbally, from people on all sides of this chamber.

The primary legislation is still in the House of Representatives and has not yet been debated. If this disallowance motion is defeated, which I suspect it will be—just—then that still leaves us in this undesirable situation where the existing law is basically being negated via regulation which has no sunset clause on it. The oil code is not even operational, and there is even less incentive for the government to move on its repeal of the sites act, let alone the Trade Practices Act. That is an undesirable situation for pretty much everybody, whether it is the independent service station operators, the major oil companies or anybody else, because nobody knows what is going to happen. It is all just going to sit there pending, hanging over everybody, and it is not going to be resolved. That will create a situation of uncertainty for all players, and I think that is undesirable.

I have indicated here, on the record, my wider views about some of these issues. If the government would show some genuineness on this issue and even progress debate on the primary legislation and move it forward, then I might have a stronger belief that they are genuine about that they are doing. We also need to see some movement from the Treasurer, of course. From experience on a whole range of issues, that is an area where movement seems to be difficult to get. I do not want to add yet another element to the debate but, as I mentioned earlier today, this is a Treasurer who was willing to leave major reforms to choice of superannuation completely off to one side and not progress it at all for years purely because the government were not interested in moving at all to address discrimination within superannuation laws against same-sex couples. We have a Treasurer with a record of not even being willing to progress his own policy initiatives in a major area like choice of superannuation purely because of stubbornness about the important but nonetheless much smaller issue of removing some discrimination. So I do not hold my breath for movement from the Treasurer on this, but I really do hope that he does move.

With regard to that issue, we all have an interest in trying to maintain at least a fair playing field for small operators—the mum and dad operators, as Senator Joyce called them. I guess after today’s vote we will not have dad and dad operators or mum and mum operators; we are stuck with only mum and dad operators. But it is important to ensure that all small businesses get a fair go. As I said, the way the market has developed, a lot of them have been pushed out of business as it is, and that situation and those pressures on them are going to continue regardless of what happens. That is an existing situation and a reality that people have to deal with, but the continuing uncertainty about the future in this whole area is a problem for everybody from all sides of the debate. It is problem that only the government can resolve, and they can resolve it by actually doing something for a change, rather than just using a mechanism like this regulation to circumvent everything and make no progress on the core issues involved.

Question put:

That the motion (Senator Joyce’s) be agreed to.