Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

I rise to speak in this second reading debate on the Petroleum Retail Legislation Repeal Bill 2006. I do not want to go over all of the arguments made by my colleague Senator Murray, who has principal carriage of this bill. We think it makes some sense to reform the Petroleum Retail Sites Act and even to replace it with the mandatory Oilcode but as he has said, and I have said, this should not be done before the Trade Practices Act is amended—and it should be amended to protected small business from large business. I do not think there has ever been such a good example of how, in the past, Australia has protected small business in the oil sector and in the retail sector, from the major oil companies who, as we know, would readily take up that sector.

The government needs to implement the Senate recommendations on the Trade Practices Act that were in the report of the Senate Economics References Committee of March 2003 entitled The effectiveness of the Trade Practices Act 1974 in protecting small business. We say that the government should, at the very least, implement those recommendations in that report with which it agreed. As I understand it, it accepted in full five of the recommendations and it accepted three in part. We would sooner see all of the recommendations picked up, but at the very least we argue that the Trade Practices Act must be changed before the Oilcode is introduced and replaces the Petroleum Retail Sites Act.

We would also like to see the collective bargaining provision in the Trade Practices Legislation Amendment Bill (No. 1) 2005 dropped in its entirety. We do not support that legislation, and we say that the two bills, and a new trade practices bill, should be cognately dealt with. But obviously we are now dealing just with the one bill before us.

My main interest in speaking today is to draw attention to a related issue, and that is the failure of this government to put in place measures which would see a place for alternative fuels in petrol retailing. I am referring to biofuels—ethanol and biodiesel—and gaseous fuels, including LPG and compressed natural gas in particular but also liquefied natural gas. This government, despite an agreement being reached under the Biofuels Action Plan just a little over six months ago, has failed to get the industry to meet even the modest voluntary targets that were set for the first 12 months of that agreement. We have a biofuels target of 350 megalitres, which is hopelessly inadequate in the scheme of things. That is a tiny percentage of what could be used by the transport industry by way of fuel replacement.

We have seen almost no growth—in fact I think it is fair to say we have seen no growth—in the use of compressed natural gas. Compressed natural gas has great advantages, but I think it is correct to say that there are no metropolitan stations which sell compressed natural gas. This is puzzling because compressed natural gas comes in a pipe to most people’s households. It goes into their stoves and ovens and sometimes it heats their hot water, and yet this valuable and very low emissions fuel has been ignored by this government.

The Democrats did negotiate a conversion grant scheme back at the time of the GST and diesel changes in 1998. That conversion scheme runs out next year. After that, there will be nothing being done by this government to encourage compressed natural gas into the transport sector. The conversions have not been taken up because there are very few retail opportunities. I once had a car that was converted to run on compressed natural gas. It was a dual fuel car but there was only one location in Melbourne for refuelling. It was certainly a long way out of the way for me; it was in a dark industrial sort of space that was quite unsuitable.

Until we get the full range of fuels available in each of our petrol stations, Australia is not going to move very far away from its dependence on fossil fuels and on oil that is largely now imported into this country. We will not use up our existing resources and we will certainly not be moving much to renewable fuels until the government takes a big stick, quite frankly, if I can put it that way. With minimal targets, like 350 megalitres, where there is no requirement and nothing is mandated and it is all up to the sector to do or not do, with respect to either the production or the selling of alternative fuels, it is not going to happen.

In fact, the government, as we understand it, is sitting on a report of the first six months of the Biofuels Action Plan. It knows that the industry has not been able to meet the target and is not likely to meet its first 12-month target. But it is not going to tell us that, of course, having sold to the Australian community the idea that it was working very hard to keep petrol prices down and to welcome onto the market alternative fuels. It is a pathetic situation that we currently find ourselves in. For this reason, I foreshadow that I will be moving a second reading amendment from the Democrats that notes that Australia has the capacity, with production facilities that are already on the ground—these are not ones that are planned or that we might be going to see the bank about; these are production facilities that are already churning out ethanol—to produce 110 million litres of ethanol a year. But of course we know that the major oil companies are holding the cards. They have only purchased less than a quarter of that amount. So it is the oil companies that are reluctant to sell alternative fuels, including ethanol blends. As I said, they have failed to meet the voluntary targets that were set for selling biofuels, as required under the Biofuels Action Plan.

The government’s reluctance to do any sort of mandating has triggered some action in other states. In Queensland, which is very much ahead of the pack on ethanol blends because of its sugar industry, at least the Queensland government has taken steps to encourage the take-up of ethanol blends. And now the New South Wales government is looking at methods to mandate ethanol.

We will be calling on the government to introduce a mandatory target in the order of 90 per cent of all retail outlets to have available E10—that is, 10 per cent ethanol, 90 per cent petrol—and biodiesel blends by 2012. It is not possible for us to amend the bill to do this, although we have examined that; we would have liked to put up amendments, and I think it would have been very interesting to see what the National Party would do, given their previous commitment to mandated targets. We think that is a modest kind of target. We are not even talking here about the total amount that would need to be sold; we are simply saying that motorists should have the choice. This government talks a lot about choice, about the need for families to have choice and so on, but virtually no-one has the choice in my home state of Victoria. I think there is one outlet close-ish to me in south Melbourne, but for the rest of the motoring population in Melbourne it is largely unavailable.

So we would like to see incremental increases each year; we think 20 per cent would be reasonable. So from 1 January 2007 the industry would be on notice that it has to make E10 available to motorists at their service stations, and each year those increases would be 20 per cent from the previous year so that by 2012 most people would have access to both biodiesel blends and ethanol blends.

I think it is interesting to consider that just the other day there was a press report that Saab is introducing a new vehicle into the Australian market that runs on 85 per cent ethanol. Senators here will recall that it was not that long ago that the government introduced fuel standards that in fact prohibit anything more than 10 per cent ethanol blends. It will be interesting to hear what the minister has to say about that. Will this car not get off the ground, as it were, in this country, because it is against the law to sell a blend of petrol and ethanol that is higher than 10 per cent? We pointed out at the time the absurdity of this ban. It is presumably going to be tested with this new vehicle. It is a great pity that senators and members in this place are not able to purchase such a vehicle so that we could be leaders, trendsetters, and get these vehicles on the road as part of our electorate provision of a car.

We also say that, if the government is not amenable to that, we would like to see all fuel contain a percentage of ethanol or a renewable fuel by 1 January 2007, with percentage increases according to a published schedule—so we would ramp it up. Obviously, we cannot put 10 per cent into every litre of petrol that is sold today—you cannot ramp up production overnight. There is some indication that, if we were to produce as much ethanol or even biodiesel as that, we would be taking away from food production vast tracts of land. So we recognise that this is not the answer to everything, but it does at least help keep the price of petrol down to a modest level and make us less reliant on fossil fuels and on imported oil.

Another option is to establish a mandatory target of 30 per cent of all retail outlets to have available compressed natural gas—again, a very modest target. It is a chicken and egg situation in that people will not have their vehicles converted to compressed natural gas if there are no retailers who sell it. Quite frankly, that is a pretty straightforward observation. As I understand it, it is possible to have a very small compressor at home, where you can hook it up to your garage and have it pump away during the night, compressing gas into your vehicle. That would be very cheap and, at the present time, not taxed. It seems to me that the home option and the option of having compressed natural gas available from your local petrol retailer would make a lot of sense.

That is the thrust of the amendment I am foreshadowing and will move, and I notice that the ALP have moved a not dissimilar second reading amendment. It is good to see the ALP finally recognising that alternative fuels have a place in the future of our transport sector, and this is welcome. For a long time the ALP joined with the government and voted in excise regimes which were inappropriate and which caused some of the major problems in confidence in biofuels. They thought that was a useful thing to do in this country, but it was not. It is good to see that the ALP have finally seen the light and recognise that the future in this country will, at least partly, be about alternative fuels.

I also recognise that there are some in this place who will want to see excise reduced on fuel. They will see that as an option, a way in which people can better afford petrol, but we do not see that as the answer. The government froze excise on petrol many years ago, and a great deal of revenue has been forgone as a result of that, so now Australia’s petrol is some of the cheapest in the world. The problem with that is that it has encouraged us to keep on purchasing big vehicles—four-wheel drives, V8s and V6s—so we are still consuming petrol at a terrific rate in this country when other countries have recognised the need to scale down to smaller cars and to have more fuel efficient vehicles in our mix.

It is interesting to note that in the last week I received a letter—no doubt many of us did—from Minister Abbott’s department offering the new range of vehicles for our electorate cars. We do not have, for instance, a rating on the list of cars that are available, and that list includes V8s and V6s—huge fuel-consuming vehicles. We do not have the green car rating, from which senators and members might be able to make an informed decision about what they are signing off on. We do not have any indication of the other cars which have been previously approved as non-standard vehicles, such as my Toyota Prius. I have now had three Toyota Priuses, and I use this opportunity to say how good they are and how little fuel they consume, but there is nothing in the list of cars available to us which suggests that the Prius is available. I may have to send a memo around to everybody explaining to them that it will be okayed if they put their hand up for it. I can recommend it as a beautiful car to drive, one which makes hardly any noise and uses less than one-third the fuel of a car of a similar size and a great deal less than some of the V8s and V6s that are on the list.

It is disappointing that we have a government that is interested in reform of a certain sort—reform that benefits the big oil companies—and does not care much about consumers. It does not care much about the environment, it does not care much about oil security and it is not interested in the long-term future of this country with regard to where our energy is going to come from for transport. I have also said many times in this place that this government does not care about alternatives, even to the private car.

We still have a situation in which this government—and it is one of very few in history—does not put any energy, time or money into the question of public transport. After the oil prices skyrocketed just a few weeks ago we heard people starting to say, ‘Now it’s almost cheaper for us to travel by public transport.’ I hope people do move across to public transport, particularly for commuting long distances, so that they do not sit in traffic jams on freeways for hours on end. I am sure it must be better to be reading the paper on a tram or a train and going to work in a less stressful environment. But, quite frankly, our public transport system is not up to meeting the needs of the vast majority of commuters. That is why they opt for a comfortable vehicle with air conditioning and a radio which takes them from point A to point B, instead of opting for transport where they might have to stand around waiting for lengthy periods of time and which will not connect with another transport mode to get them to their place of work or wherever they want to go.

So my message to the government through this legislation is that the government needs to look beyond this microscale, this micro kind of reform which sees to it that the major oil companies will own more petrol stations and which will move independents out of the sector even more than has been the case in the past. The government appears not to care very much about the future of our transport needs, our oil needs and the cost of transporting ourselves around.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

Family First believes the Petroleum Retail Legislation Repeal Bill 2006 will not ensure the lowest possible petrol prices for families and small businesses. That is why Family First will be moving amendments to the bill to ensure that no company selling petrol can own or operate more than 25 per cent of petrol retail sites. Family First wants to try to level the playing field for small businesses competing with the oil giants because that will lead to the lowest possible petrol prices for families and small businesses.

It is generally agreed that the Petroleum Retail Marketing Sites Act 1980 and the Petroleum Retail Marketing Franchise Act 1980 are outdated, no longer serving their intended purpose and should be removed. Apart from anything else, these acts were written before the petrol retail market was transformed by the entry of the supermarkets Coles and Woolworths. Family First believes the proposed Oilcode fails to adequately address this reality and is concerned the Oilcode would allow even greater market dominance by the major players. This would threaten independent service stations, which are vital for a competitive petrol market and to ensure the lowest possible petrol prices. Let me be clear: Family First wants the lowest possible petrol prices for families and small businesses. There is a tendency in small markets such as Australia’s for large companies to keep getting bigger until there are only a handful of players controlling the sector.

Family First is convinced there will be fewer and fewer petrol retailers and less and less competition unless we have adequate regulations to ensure a genuinely competitive market. The current Trade Practices Act is not up to the job. Woolworths and Coles already have a stranglehold over Australia’s supermarkets and are now seeking dominance in service stations. It is estimated that Shell and Coles and Caltex and Woolworths may already control up to 70 per cent of the retail petrol market. Family First’s amendment will restrict the number of sites that a company or partnership can own or operate to 25 per cent of all service stations. That would mean the alliance between Caltex and Woolworths could only own or control 25 per cent of sites and the Shell and Coles Myer alliance could also only own 25 per cent of sites. Companies or alliances that already operate or control more than 25 per cent of petrol retail sites will not be allowed any more.

Family First’s amendment will put a lid on market dominance, to benefit families and small businesses. Family First’s action strikes a good balance between two extremes. No regulation means the law of the jungle, where only the biggest survive. Too much regulation chokes the market and is a burden on all business, particularly small business. Putting a lid on market dominance is fair and reasonable regulation. It makes sense. It allows the big end of town to survive as well as the independents.

Family First is also concerned that service stations cannot buy at the best price as they are small players without bargaining power. That is why Family First will move an amendment to give service stations automatic exemption to collectively bargain with the oil giants to buy fuel. Everyone accepts small businesses need bargaining power when negotiating with big business. So why should service stations be burdened with an application process and be forced to get permission to collectively bargain? It does not make sense. This is time consuming and there is no guarantee of receiving permission either under the current system or under the government’s proposed changes.

The Senate approved simpler collective bargaining notification procedures last year, but the government has stubbornly refused to implement them and is trying to blackmail the Senate to also pass merger changes to help the big end of town. It does not make sense. Family First believes small business should not have to suffer and wait around while the government engages in such power plays. The Minister for Industry, Tourism and Resources has said the Oilcode will introduce a nationally consistent approach to terminal gate pricing which will:

... improve transparency in wholesale pricing and allow access for all customers, including small businesses, to petroleum products at a published terminal gate price.

Family First’s amendment would achieve greater transparency, by making clear the breakdown in prices, including discounts, as well as how the service stations qualify for those different prices. Family First’s changes will not stop discounting but do address the concerns of independent service stations and other small businesses that the criteria to qualify for those discounts need to be made public. Small business deserve to know what criteria they must meet to receive discounts.

Family First’s amendment also addresses a concern raised in the Senate committee which examined this bill about anticompetitive behaviour. Understanding how prices are set can help reduce anticompetitive behaviour. While small businesses may not have the buying power to qualify for bigger volume discounts, at least they will know how to make the most of their buying power. It is important to state that petrol is an essential resource and there are no ready alternatives for most consumers.

The four oil giants, due to their control of the market, can use their power to discriminate between service stations. Family First believes it should do everything it can to ensure that the risk of anticompetitive behaviour is reduced. One way to remove competition, such as that by independent service stations, is to refuse to supply them with petrol. The Oilcode states that suppliers must not unreasonably refuse supply, unless they do not have supplies themselves or they think the customer cannot pay or cannot transport the fuel safely.

Family First acknowledges there is a dispute resolution process, but what do service stations do about getting supplies while a complaint is being investigated? In this situation the oil giants have all the power. They could delay resolving disputes and threaten the viability of small businesses at the same time. The Family First amendment switches the balance to the small business so that oil giants are not allowed to refuse supply except for health and safety reasons. That makes sense. When there is a dispute about supply—a dispute that could take a long time to resolve—Family First’s amendment requires the oil giants to supply on a most favoured customer basis so the small business does not suffer. Family First is seeking other senators’ support for this common-sense amendment.

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

I also rise to contribute to the debate on the Petroleum Retail Legislation Repeal Bill 2006. I listened with great interest to the comments by Senator Fielding about the relationship between the Trade Practices Act and this bill, and the bills that are repealed through this bill. This bill repeals two pieces of legislation that were enacted more than 25 years ago—the Petroleum Retail Marketing Franchising Act 1980, otherwise known as the franchise act, and the Petroleum Retail Marketing Sites Act 1980, otherwise known as the sites act. The truth of the matter is that over that 25-year period there have been such profound changes in the petroleum marketing industry that the two pieces of legislation enacted all those years ago now cover less than 50 per cent of the industry by volume. So it is timely that the government reviews this legislation and removes it from the statute book, conditional upon the implementation of an Oilcode. Senator Fielding spoke at great length about the conditions of the Oilcode and the concerns that some parts of the industry had about shortcomings that they still perceived to be in the Oilcode. But, at this stage, it is an agreed set of arrangements between the players in the industry that has finally been brokered by the government.

Such repeal legislation has been contemplated by this government many times but sadly it has not been able to get that Oilcode development, which would provide for greater transparency and a more even playing field for all participants in the industry, until now. Labor supports the repeal of this very old legislation and the implementation of an Oilcode. The sites act is so old that it restricts the number of retail sites that prescribed oil companies—namely BP, Caltex, Mobil and Shell—can directly own and operate in Australia. The franchise act sets out the minimum conditions and terms for franchise agreements between the oil majors and the franchisees. One of the profound changes that has occurred over that 25-year period is the market entry of the large independent retailers chains that we saw in the 1980s and 1990s and, much more recently, the supermarket retailers. We have had many discussions in this place over recent months about the role of supermarket retailers and the relationships that they have with their petrol partners with the debate about the fuel excise legislation and now this legislation.

The Oilcode that has been brokered introduces, amongst other things, a nationally consistent approach to terminal gate pricing. I know that we have had much discussion in this chamber about just what terminal gate pricing is and who pays that amount. It provides for greater transparency in the wholesaling of petrol to independents and other players by the major oil companies. It also establishes a more efficient dispute resolution system to provide the industry with a more cost-effective alternative to taking disputes to court. There were some concerns raised during the inquiry of the Senate Economics Legislation Committee into this bill about that whole dispute resolution process. Some concerns were raised this morning in this debate by Senator Murray, who recounted the evidence that was received by the committee from some of the independents. They were again referred to by Senator Fielding when he was talking about the time constraints between lodging a complaint with the disputes process and having it heard.

This bill is very timely. People all over Australia are struggling with soaring petrol prices, interest rate increases and greater uncertainty in their workplaces. People are now spending a higher proportion of their income on mortgage payments than ever before. We saw in the Sydney papers on the weekend that there are now almost 5,000 mortgagee-in-possession sales going on in New South Wales as people relinquish their mortgages because they simply cannot afford them. At the last election, the Prime Minister promised to keep interest rates low, but people are now realising the hollowness of that promise. People now spend about 11 per cent of their household disposable income on mortgages compared to less than 10 per cent when interest rates peaked in 1989. So these families in my state—and your state, Mr Acting Deputy President Hutchins—of New South Wales who are paying off a mortgage are hurting much more than they did in the past.

This bill shows us that the government is capable of taking corrective action in the retail petrol market. The question begs to be asked of why it has taken so long. Why has a 25-year-old regulatory regime been allowed to fester until today? Rather than take the initiative to resolve the issues raised by this bill, we have had discussions about the Trade Practices Act. The recommendations of the Dawson inquiry into the Trade Practices Act have been sitting here and have been the subject of debate in this place and in the House of Representatives for years as we have waited for the government to take some action on those recommendations. In fact, the Senate Economics Legislation Committee in 2004 reported on the Trade Practices Act amendments, investigated how the Trade Practices Act was protecting small businesses and made significant recommendations on the legislation, which again we are still waiting to see and which would strengthen the conditions of the Oilcode that are part of the whole package of this petroleum reform.

It was very interesting listening to the Senate Economics Legislation Committee inquiry into this bill. The evidence suggested that the government did not proceed with the bill in 1998 because the affected parties could not agree on the Oilcode proposal. It has taken six years for the government to broker a compromise on this particular legislation and, on the evidence, there are still some parties—particularly the independents—that are very worried about some parts of the Oilcode.

However, there can be no doubt that vigorous marketplace competition is one step to holding petrol prices as low as possible; so we have waited to see this legislation come into the Senate, hoping that it has been drafted in a way that can mitigate the impact of petrol prices on ordinary Australians. We have had significant representations from both the ACCC and the Australian Institute of Petroleum about the importance of repealing the two acts and about the impacts that might have on petrol prices. Let us hope we do see the impacts that are anticipated from the repeal of these pieces of legislation. The committee actually recognised that neither act is effective and that neither act keeps pace with the structural changes that have taken place in the petroleum industry. The acts expose different parts of the industry to different regulatory requirements that are now very difficult to justify.

The entry into the market of the supermarket chains, with their market strength, means that it is necessary to ensure that all participants can compete on equal terms. Failure to do this is likely to lead to a lessening of competition if the refiners withdraw from the market altogether, which was something that was discussed during the hearings and was considered to be a possibility. That is possible if their competitive disadvantage is not addressed. The committee was also very concerned that failure to address these issues might lead to a continuing loss of refining capacity. We now know that we have lost more than half of Australia’s refining capacity over recent decades. As we have heard from several speakers’ contributions to this debate, that raises serious issues for Australia on energy security.

So, on the whole, the committee supported the repeal of the acts and considered that the proposed Oilcode would significantly improve the situation of many industry participants, particularly the commissioned agents who do not currently enjoy any of the protections afforded by the franchising act. These groups will also have access to a low-cost dispute resolution scheme for the first time. The committee also noted the concerns of some industry participants about aspects of the Oilcode, particularly in relation to tenure and the potential for abuse of market power. The committee did not believe that the concerns about tenure were very well founded, although they were passionately argued throughout the hearings, but we did suggest that the government revisit the issue of the $20,000 threshold for extended tenure under the Oilcode and we did express our concerns about the government’s need to bring forward amendments to section 46 of the Trade Practices Act, which we believed was a much more appropriate way to address these concerns.

The Labor senators argued the importance of section 46 of the Trade Practices Act and added some comments to the report which reflected our concerns about the fact that, in the Rural Press case that had been brought to the Federal Court and the High Court, the concept of abusing market power in another market had been brought into question. In the Boral case the very concept of market power was brought into question. The ACCC gave evidence that they had effectively given up taking cases under section 46 of the Trade Practices Act because they now knew that it had been rendered ineffective.

We made several recommendations in the report of the Senate inquiry on the effectiveness of the Trade Practices Act on small business. These recommendations involved strengthening the Trade Practices Act, some of which the government has committed to. But much more needs to be done. The measures in this legislation do not achieve the objectives of encouraging competition in this sector in isolation from the section 46 reforms that the Senate has previously called for—and Senator Fielding made those points in his contribution to the debate. We on this side of the chamber believe that the most effective market outcome will not be achieved unless section 46 reforms are implemented concurrently. We note the comments of Mr Cassidy from the ACCC in evidence to the Senate inquiry:

I would say that, to the extent that there are shortcomings in the current section 46—and that is obviously well-travelled ground—we think the answer to that is to amend the section.

So the ACCC clearly supports the strengthening of section 46 to support competition in this and other markets—and I suspect Senator Joyce does too. Ideally, the government should commit to immediately legislating the recommendations of the Senate committee in relation to section 46 of the Trade Practices Act.

I note the first, second, third, fourth, fifth and sixth recommendations of the Labor senators’ report. The first is that the legislation be amended to state that the threshold of a substantial degree of power in a market is lower than the former threshold of substantial control—a subtle difference but an important one—and to include a declaratory provision ‘outlining matters to be considered by the courts for the purpose of determining whether a company has a substantial degree of power in a market’. It says these matters should be based upon the suggestions outlined by the ACCC.

Recommendation 2 says:

The Committee recommends that the Act be amended to include a declaratory provision outlining the elements of ‘take advantage’ for the purposes of s.46(1). This provision should be based upon the suggestions outlined in ... this report.

We recommended:

... the Act be amended ... without limiting the generality of s.46, in determining whether a corporation has breached s.46, the courts may have regard to: the capacity of the corporation to sell a good or service below its variable cost.

Even in the current inquiry that is taking place into the supply and cost of petrol in Australia, we are hearing serious concerns about the way in which the independents in particular are feeling very vulnerable without the provisions of section 46 of the Trade Practices Act being amended by this government. We understand that the government will bring forward a bill that includes a small set of the recommendations but that it has been held up, as I said earlier, by the apparent linkage with the other trade practices bill—the Dawson report bill, which contained merger changes that were deleted from the bill in the Senate. So our recommendations, presented as an amendment by Senator O’Brien, relate to section 46, which constrains abuse of market power. They seek to toughen section 46, to allow the ACCC to crack down on the abuse of market power, and we know that this is an important concern of senators on both sides of the chamber. We believe that there should be no ducking and weaving on the other side in relation to this amendment, which will ensure only that huge corporations operate properly and fairly towards small businesses.

While one aim of this bill is to increase competition, we cannot forget that the main objective of competitors within a market is to eliminate competition. The increasing oligopolisation in this and many other industries pays testimony to this fact. The government should not half-complete its job of promoting competition in the petroleum industry by ignoring the vulnerability of small businesses to the blatant abuse of market power. High Court cases dealing with this issue do not bode well for the ACCC securing prosecutions for the misuse of market power under current provisions in the future. Again, we should not allow dysfunctional legal provisions to fester while market share is increasingly being concentrated in the hands of a few rather than in the hands of many.

In the past the government believed the best approach for controlling the power of the major oil companies was to specify the number of retail sites the companies could operate. As I have said, Labor believes the focus should be on reforming the Trade Practices Act. We need to ensure that the ACCC has the power to ensure that oil companies are not abusing their market power. Labor’s amendments to this bill reflect the recommendations of the Senate report into the effectiveness of the Trade Practices Act for small business. We want to toughen section 46 of the act to allow the ACCC to crack down on the abuse of market power.

While Labor accepts that the Petroleum Retail Marketing Sites Act and the Petroleum Retail Marketing Franchise Act represent an outdated model for regulation of the petrol retail sector—as they exclude major supermarket chains engaged in petroleum retailing and have been circumvented by major oil companies in some circumstances—I am also of the view that the principal issue in encouraging competition in this sector, and indeed across all markets, is the strengthening of the provisions of the Trade Practices Act against misuses of market power. That can only occur if the section 46 reforms are implemented concurrently. Even the ACCC has shown its clear support for strengthening section 46 to support competition in this and other markets—and I have quoted comments made by Mr Brian Cassidy to the original inquiry.

There are enormous challenges ahead for Australia as supplies of fossil fuels come under increasing pressure from the rapid pace of development in countries like India and China, but there are also opportunities for us as we develop our own resources. With vision and leadership there is the real prospect of major new industries opening up in areas such as natural gas and the conversion of coal to diesel. As a representative of a regional and rural electorate, I am very interested in the potential for large-scale ethanol and biofuels industries in Australia. What I do not want to see, though, for the people of Australia is ever-rising fuel prices and an increasing reliance on overseas oil, with our future prosperity and security held to ransom as a result of the government’s lack of initiative.

I commend the bill to the Senate. I look forward to seeing those long-awaited changes to the Trade Practices Act which need to be part of the Oilcode as soon as possible.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

I too want to join in the debate on the Petroleum Retail Legislation Repeal Bill 2006. As other speakers have said, the purpose of the bill is to introduce major reforms to the petroleum industry. The bill will facilitate greater transparency in the wholesale and retail fuel markets. The changes in this bill will lead to greater competition amongst the major players, which must ultimately have a positive effect on fuel prices at the pump. Senator Stephens, from the Labor Party Right, said vigorous market competition is one way to hold down petrol prices. That quote was worthy of my jotting down and quoting here in the chamber. That is a quote you would only ever hear from the Labor Party right wing, which has remnants of sense in regard to economics. You would certainly never hear it from the Labor Party Left, epitomised by Senator Carr.

The bill will abolish the Petroleum Retail Marketing Sites Act 1980 and the Petroleum Retail Marketing Franchise Act 1980. These are important dates to remember. The two acts, which once served a purpose, have now become outdated and ineffective. Frankly, the acts are a hindrance to industry competition and efficiency. Moreover, the acts have become a hindrance to many of the small operators whom they once sought to protect. The sites act sets a quota on ownership of petrol stations by the oil majors. The policy was to prevent the oil majors from dominating the market to the extent that competition would be severely reduced. That was a good intention back in 1980. The policy was introduced to protect and encourage an industry that was predominantly made up of small service stations. But that can no longer be said; today the structure has changed.

The Senate Economics Legislation Committee report on this bill tells us that in 1980 there were some 20,000 service stations and that by 2004 the figure had fallen to 6,649. There has been an enormous shift and change in the industry whilst the sites act and the franchise act have been in place. The structure of the industry has completely changed, and the sites act, for one, is now hardly relevant to its original good intentions. With the adoption of multisite franchising arrangements, whereby a single operator or company will legally circumvent the act with franchise agreements to operate several sites, the sites act has, frankly, become a farce.

The two major supermarkets, Woolworths and Coles, own hundreds of service stations. Unless you are the chosen petrol brand of Coles, which is Shell, or the chosen brand of Woolworths, which is Caltex, you are locked out. What about the other two majors: BP and Mobil? Even they are finding it tough. Talk about catering to the big end of town; it just got bigger with both Shell and Caltex linking up with the two major supermarket chains. I want to refer to the economic legislation committee report on this bill. I will quote from what a Mobil representative said about this. He said:

... Mobil’s ability to respond effectively and in a timely manner to the rapid changes in the retail fuels market has been limited by the constraints placed on us under the sites and franchise acts.

The President of BP was also a witness before the committee. He said:

Reform is important to us largely because we do not have the freedom to operate the sites as efficiently as we can and thus to compete as best we can.

The point here is that these two majors have been locked out by the two major supermarkets. They are at a disadvantage, and that is unfair, in that they are uncompetitive against the other two majors. In the long run you may well get the absurd situation where those two, Mobil and BP, merge or just leave town. If they are unable to establish relationships like the other two majors have, it will have a long-term effect. Talk about catering to the big end of town; it just got bigger.

In regard to the franchise act, as with the sites act it has been superseded by the events in the market since its introduction in 1980. It is a fault of the act that it narrows the definition of what represents a franchise agreement. The act does not extend to small business operators or service station owners who have to deal with the petrol companies; nor does it cover the massive number of supermarket sites, independent operators or commissioned agents—all of whose presence has grown in the market since 1980. Certainly the big changes have come about in the past decade. Given these developments in the industry over the past 25 years, it is crucial that the industry adapts. It would be foolish to stand still and maintain the old structures. This is an industry vital to Australia’s economic wealth and its health and efficiency directly affects fuel prices at the pump. To this end, the government will be introducing the mandatory Oilcode code of conduct to replace the franchise and sites acts. I am very interested in that mandatory oil code of conduct given that at the moment the government is debating whether or not to have a mandatory horticultural code of conduct. That is definitely an aside. So to replace these two acts the government will be introducing a mandatory Oilcode code of conduct so as not to create an ethical void with the abolition of the two acts. To quote Minister Macfarlane’s second reading speech:

The package will recognise the power imbalance inherent in the substantial interdependency between some small businesses operating under the franchise and commission agency agreements and their wholesale fuel suppliers, whether those suppliers are oil majors or independent retail chains.

The components of the Oilcode will be a national terminal gate pricing regime; minimum standards for new fuel reselling arrangements; greater coverage for different forms of agreements, such as commissioned agencies; and a dispute resolution service. I would like to further quote from the minister’s second reading speech to give greater clarity and a surety to the other side in regard to the introduction of the Oilcode. The minister said:

The oilcode regulations will achieve this outcome through three key policy initiatives. It will establish minimum industry standards for fuel re-selling agreements between wholesale fuel suppliers and fuel retailers to provide a baseline for negotiations on those agreements. These minimum standards build upon and strengthen relevant provisions in both the franchise act and the more general franchising code of conduct and will provide greater certainty and protection for all parties to fuel re-selling agreements.

The oilcode will also introduce a nationally consistent approach to terminal gate pricing arrangements to improve transparency in wholesale pricing and allow access for all customers, including small businesses, to petroleum products at a published terminal gate price.

That is something we already have in Victoria, I might add. The minister continues:

This approach will not negate the ability of parties to negotiate individual supply agreements nor will it prevent the offering of discounts by wholesalers.

Finally, the oilcode will establish an independent downstream petroleum dispute resolution scheme to provide the industry with an ongoing, cost-effective dispute resolution mechanism as an alternative to taking action in the courts.

So any changes the government can facilitate—with the cooperation of the industry, of course—that support the industry to operate more efficiently are welcome, particularly in these times of high petrol prices. I can say that there are very few more consistently hot button issues in politics than the price of petrol, and for good reason because petrol prices go directly and swiftly to household budgets. It is worthy of note that Australia has the fourth lowest tax regime on petrol of the OECD countries, surpassed only by Canada—just—the USA and Mexico. Nevertheless, I recall that in 2001, when the price of petrol shot up to 85c a litre, a price which seems pretty reasonable now, there was an enormous public backlash against the government in regard to its indexation policy—ironically, a policy initiated by a Labor government.

However, we listened to the public in 2001 and abolished indexation. It is worthy to note that, if indexation were still in place today, the excise tax would be 54c, not the current 38c. I should also add that in 2000, with the introduction of the GST, the federal government implemented further measures to cap and reduce—or suppress—the price of petrol. When the GST was introduced in 2000, the level of excise on petrol and diesel was reduced by 6.7c per litre. Again, in 2001 the government reduced fuel excise by a further 1.5c per litre and, as I said before, in the same year abolished indexation.

In the time available, it is worthy to note that the existing excise tax is 38 cents. Whether it is 80c, 85c or $1.40, the federal tax is static. It is important to say that the federal government receives no windfall from higher petrol prices. In fact, the higher petrol prices are, the more the market reacts and consumes less. Therefore, at the federal level the tax take is less. It is the state governments that receive the big windfall out of this because of the 10 per cent GST on the petrol prices at the pump. You never see them making any commitment to reduce the taxes—not in the last decade—as this government has.

It was a Labor government which refused to sacrifice its budgets and reduce the petrol tax take, but the truth of the matter—as it is known by this chamber and is also generally known and accepted by the public—is that petrol prices are affected by world prices. Though, if you listen to the opposition, you would really think it was this government which dictated the price of a barrel of oil. What I have just said with regard to the tax regime being the fourth lowest in the OECD and the measures the government has taken over the past decade to reduce its take of petrol taxes puts a lie to the Labor Party claim.

The current high petrol prices yet again highlight the energy challenges facing Australia and our need to reduce reliance on oil and develop an alternative fuel market. To this end, only last month the Prime Minister brought down in parliament the government’s energy initiative statement, announcing new measures to further accelerate investment in alternative fuels and to provide Australian motorists with cheaper fuel options. The headline announcement was that the government would ‘bring forward the previously announced rebate for the purchase of new LPG vehicles for private use’. The statement further said that the government will:

… contribute $1,000 to the purchase cost of a new factory-fitted LPG powered vehicle.

In addition, the Government will provide a grant of $2,000 to the cost of converting vehicles to LPG for private use.

The energy statement further states:

While savings will depend on fuel consumption and driving habits, the Australian LPG Association estimates that, on average, the fuel bill for a six cylinder vehicle travelling 15,000 kilometres a year would be cut by $27 a week, or more than $1,400 a year ...

Ethanol blends—which have so often been debated in this chamber—can also make an important contribution to meeting Australia’s transport fuel needs. The Australian government has spent over $55 million to date in production grants to effectively offset the excise on ethanol production in Australia. We have already implemented a range of measures to help companies achieve a target of at least 350 megalitres of biofuels production in Australia by 2010. This government has worked hard to restore confidence in ethanol after the disgraceful campaign waged by the Labor Party 18 months ago or thereabouts.

In question time in the House of Representatives and in the Senate, Labor asked question after question, discrediting and slurring the ethanol industry just for base political purposes to the point that the public really did react against the ethanol industry and the possibility of it ever starting up in this country. They really did scare the public, and we have spent an enormous amount of time and resources to restore public confidence in that industry. And what do you know: Labor are now on board with the ethanol industry. They have done the complete circle. Suddenly, they now think the ethanol industry is worth supporting. They would be right in that respect—of course, they are. At least they see a winner in the ethanol industry. In June this year, Minister Macfarlane held a roundtable conference in Canberra of all the ethanol players. The news coming out of that conference was extremely encouraging indeed for the future of this industry. I will read from part of the minister’s statement:

A national roundtable on ethanol has heard that production of transport ethanol in Australia will have jumped by more than 50 per cent in the last 12 months, from almost 23 million litres in 2004-05 to an expected 36 million litres by June 2005-06.

That is very encouraging to this government, which has been steadily building up the confidence of people in accepting ethanol in their cars, after the disgraceful Labor Party campaign against ethanol.

The reports from the ethanol sector at the roundtable meeting included: BP plans for a hundredfold increase in ethanol sites over the next two years; United Petroleum will increase ethanol retail sites from 67 to 130 by the end of 2006; Woolworths proposes to enter the ethanol market, with 50 sites by 2007; Caltex is to double the number of ethanol retail sites by the end of 2006; and Australian Farmers Fuel has 52 stations selling ethanol and biodiesel blends. So, as you can see, the ethanol industry is getting on its feet and production is increasing.

As I mentioned before, the recent government support for the ethanol industry has been not only through capital grants and research and development grants. We have also given it a honeymoon on excise till the middle of 2011, scaling up to 2015, after which this fuel will be on a competitive footing with other fuels. In short, the news is good in the alternative fuel market, if for no other reason than that petrol prices are so high, thus making alternative fuels even more competitive. (Time expired)

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

I rise today to make some comments on the Petroleum Retail Legislation Repeal Bill 2006. I remain unconvinced by the government’s argument here. It seems to me that it is really quite simple. We have a situation where the Petroleum Retail Marketing Franchise Act and the Petroleum Retail Marketing Sites Act do need revisiting. Everybody, I think, agrees with that. They have allowed the rise of retailing outside the acts’ ambit, most notably through the entry of supermarkets and the independent importers-marketers into the industry. And, although they were intended to ensure competition, the acts have also restrained competition by limiting the ability of the majors to compete with retailers operating outside the acts’ coverage. But the Greens do not believe that the Oilcode in its current form is sufficient to maintain the competitiveness of the independent retailers, because it does not prevent either below-cost selling or the provision of discounts to large-volume customers in the wholesale market.

It is obvious—as Senator Murray has argued, and as others in this chamber, notably Senator Joyce, have argued previously—that section 46 of the Trade Practices Act needs to be dealt with and strengthened before we move on any of these others, because people need some surety; they need some security about what is going on here. I am glad that Senator Murray for the Democrats has brought in a number of amendments which would strengthen the capacity of the parliament to support small business.

I am always interested to hear the government say it supports small business. From where I sit, time after time the actions that are taken do nothing to support small business—in fact, they undercut them and, really, drive them out of the industry. That is what is going to happen with regard to small independent outlets as a result of this legislation.

Nobody has been able to explain how, when you are allowing the majors to move in and sell below cost and access the discounts to large-volume customers in the wholesale market, the independents are going to compete with that. How could they? Can somebody in the government explain to me how the four majors operating in that way are going to leave any space for the small players? It just beggars belief, because that simply will not happen. The major players will reduce their prices, drive the small independent retailers out, take more market share themselves and then put up their prices, as is consistent with what they have done time and time again in the past.

Senator Murray’s amendments, I believe, are very important ones, because they, at least, move on the following principles. They look at this issue of some organisations having ‘a substantial degree of power in a market’. They look at a whole range of issues which would strengthen section 46, and I think that that is something that the government needs to look at. It is no use the government saying that they will deal with section 46 later. That does not give comfort to anyone because we do not know exactly how it is going to be dealt with. And, whilst this is a mandatory Oilcode, it does not go to those issues that I have just spoken about in relation to the Trade Practices Act.

Obviously, it does seek to prohibit the misuse of market power by organisations with a substantial degree of power in the market, but I think that if we move on that in the way Senator Murray has suggested it will be a very good thing. I note that some in the government are arguing that this view is absolutely wrong and that the mandatory Oilcode has satisfied the concerns of the small retailers. But, in fact, the Motor Trades Association of Australia—and it represents service station operators—has said it believes that the proposed code is defective because it will not ensure a level playing field that would allow small service station operators to compete fairly in the market with the large supermarkets and oil companies. And these are the people representing the small players. They go on to say that the outcome of the government’s changes will be the closure of more small franchised and independent retail outlets, meaning, in rural and regional areas in particular, that motorists will have to drive longer distances to obtain fuel.

We will see increased dominance of the retail petroleum market by the two supermarket chains. We will see loss of competition in the retail and wholesale markets as independent importers struggle to find sufficient retail outlets to sustain a viable import business. There will be detrimental impacts on motorists in the longer term as small competitors exit the market and the larger chains gain a greater share of the retail petrol market, leading to less price competition. And service station operators wonder where the benefits to motorists and the government are in these proposed reforms. The only winners here would seem to be the oil majors and the two supermarket chains. From my point of view, in the absence of the changes to section 46, that is the only conclusion that I can draw. The only winners here are, in fact, BP and Mobil, who will be able to get themselves into the market in a way that they have not been able to because of the dominance of Shell and Caltex.

To suggest, as members of the government have, that if BP and Mobil do not get their own way they might leave the country beggars belief. I do not know of any country in the world where those petrol majors have just up and left. So I would like to be enlightened by the government—by any member speaking for the government—explaining to me on what basis those companies would leave the country when their businesses are in fact extremely profitable, as we know from their annual reports.

We know that the chief executive officer of the Service Station Association, Mr Ron Bowden, predicted that between 1,000 and 1,500 service stations will close and another 200 franchisees will leave the industry in the next two years. So in fact the government’s proposals would increase concentration in the industry and market power would be in the hands of a few large companies, which would ultimately lead to higher prices. There is no doubt that, after discounting or selling below cost in order to drive out the independent operators, the minute they have driven them out they will then up the prices to recoup whatever discount they had put in there in the first place. The Oilcode is not going to prevent them from doing that.

I have some very great concerns about this. The government has been aware of the need to deal with section 46 of the Trade Practices Act for a long time, and it has not done it. I think it is totally irresponsible to come in here with legislation that repeals existing legislation without letting the parliament know and without having introduced the changes to the Trade Practices Act that would supposedly give protection to the small operators in the way that the government says that it has an interest in doing.

In terms of the issue of alternative fuels—and this certainly comes to the point of the majors having control of petrol retailing—we have been trying for a long time to have the rollout of alternative fuels in Australia. The reason that has not happened to the degree that we would like is that the majors have no great interest in doing it. I acknowledge that some of them are moving on this at the moment and may continue to do so, but the fact that they will have control of the majority of the outlets means that that will be something that they are able to control much more readily than anybody else.

We have an oil crisis that is converging with a climate change crisis. We need to reduce our dependence on petroleum. We need to get into the alternative fuels in a big way, and compressed natural gas, particularly in the heavy transport industry, is something that the transport industry itself says it would be interested in. But of course you need a distribution network, a refuelling network, up and down the east coast and on the major transport routes if you are going to get that kind of change from the heavy transport industry. So we come back to the same conundrum about rolling out adequate networks for distribution.

As some senators would be aware, we already have this problem in Tasmania. There is no other outlet for LPG after Sorell, which is just outside Hobart, for the entire east coast of Tasmania. So if you wanted to have 100 per cent LPG, as some councils would like to do for their car fleets, you cannot, because there is not one distribution outlet. Tasmania has an appalling distribution network for LPG. Once again, it is no use putting up conversion to LPG and subsidising conversion if you do not have a distribution network that will actually provide for that to occur. So we have some real issues about not only funding research and development in alternative fuels but actually making sure that you get an appropriate distribution network throughout the country.

But the other issue that I want to speak on for a moment is the Labor Party’s second reading amendment. There are a number of issues in that that of course the Greens are interested in: increasing the market penetration of ethanol and biodiesel, LPG and compressed natural gas; and securing new investment in biofuels. But we do not support investment in coal to liquids. I think this shows the internal lack of cohesion of Labor’s policies. On the one hand they say they want us to reduce greenhouse gas emissions, and on the other hand they want to invest large amounts of money in coal to liquids when the Centre for Low Emission Technology has said quite clearly that, even if you could get into carbon capture and storage and it was a 100 per cent success—and at a price where you would do that—the emissions from the tailpipe of a vehicle running on liquid coal are the same as from conventional oil.

So there is no point in it. What is the point in a greenhouse gas world, in a world that is heating up? Why would you go down the path of spending millions on research into something that you cannot use at the end of the day, whereas if you put the same amount of money into lignocellulose research, which will generate ethanol from waste plant material, then you get a win-win for climate change and for new fuels?

So there are lots of ways of actually addressing the crisis that we have globally. The report brought down by the Senate Rural and Regional Affairs and Transport Legislation Committee is reading that I would recommend to everybody in the chamber. But I think that the internal inconsistency of putting in coal to liquids actually demonstrates that Labor wants to have it both ways on transport fuels and climate change. It is an unacceptable way to go. So I move an amendment to the Labor Party’s second reading amendment:

Paragraph (a)(iii), omit “and coal”.

So gas to liquid stays but coal to liquids goes from the Labor Party’s amendment through the amendment I am moving here.

I am also concerned that Labor is advocating finding more oil and spending more on finding more oil. Yes, of course that is going to be an option. But what we know from the latest information coming to us from all of the exploration companies and academics and so on is that going into deep water becomes extremely costly. So when it comes to any oil that you might find, particularly around Australia, where we are not known for major finds, you might be investing more in trying to extract the oil from the deep ocean than you are ever going to get from the oil.

I would remind senators that the expectation is that, if oil stays at $50 a barrel, by 2015 imports will exceed the value of exports by $25 billion. What is that going to do to the current account deficit? What is it going to do to inflation if we allow that to occur? We are talking about less than 10 years time; we are not talking about a long time away. So the sooner we can get into alternative fuels, the sooner we can improve our own self-sufficiency, the sooner we can reduce our dependence on imported oil, the better it is for the country in terms of energy security and the better it is for the world in terms of greenhouse gases.

In this move away from oil, we should not just be looking at this issue of how we distribute petrol and the issues around pricing, I suggest that at the big picture level we should be pushing for an oil protocol globally. Such an international multilateral protocol would organise a way of gradually reducing in an orderly manner each country’s dependence on oil by a certain per cent, and the same with supply, so that we gradually get there—instead of being confronted by what I believe will be social and economic chaos as this situation with oil depletion plays out over time, especially in convergence with climate change. Quite a lot of work has been done on the notion of a multilateral oil protocol, a protocol that would have no country producing oil above its present depletion rate, no country importing oil above the world depletion rate, and so on and so forth. There is a great deal of detail in relation to these protocols. I float that idea. Whilst we need to look at the day-to-day issues and whilst politics is dominated by petrol prices in the here and now, we know that petrol prices now are nothing compared with what they are going to be in the future. We know that, if we have to suffer $25 billion in imports exceeding exports by 2015, we will be in real trouble.

My view is that at the national legislative level we should be protecting as much as we can the independent and small operators, because they are our best hope for rolling out, particularly in rural and regional Australia, opportunities for taking up alternative fuels. The only way we are going to get real competition is to maintain those independent and small operators in the marketplace. The only way we are going to do that is by amending the Trade Practices Act right now, and not waiting—giving this power to the majors now, going with an Oilcode we know is flawed, and then waiting for some changes to the Trade Practices Act which may never eventuate. I say that because the government said previously it was going to go with a mandatory code for the primary producers of Australia in terms of retail groceries and it totally reneged on that after it had said that was going to happen within 100 days of the 2004 federal election.

We have had the government not act on the country of origin labelling; we have had the government walk away from alternative fuels in rural communities, which has been a big slap in the face for them; and now we have had the government renege on a very clear promise that if the coalition was returned that mandatory code would be in place 100 days after the 2004 election. It is not, and it is not going to be. Saying that there will be an announcement this Thursday about more or less starting the process again is an absolute slap in the face. If those rural communities continue to support the coalition when it has done them in on small business—from the individual fruit and vegetable growers through to the small businesses in the towns such as these independent franchisees and other small business operators—if they continue to vote for a government that is not acting on climate change or oil depletion, then they are only going to see more of their own kind driven off the land. The South Australian Farmers Federation put out a release recently saying that at least 15,000 families have been driven off the land already.

Let us not see rural communities suffer any more in this way. Let us address these issues with the Trade Practices Act. I implore the Senate to support Senator Murray’s amendment and to heed what those people who represent the industry are actually saying—that by repealing these acts without the safety net that is necessary with the changes to the Trade Practices Act what is going to happen is that all these small businesses will be closed. I am not in support of handing over retail petrol sales in Australia to the four majors, and that is what this legislation is about. This is about the government acting on behalf of BP and Mobil so that they can get in on the act because they have been outmanoeuvred by Shell and Caltex. But in giving BP and Mobil what they want and setting up perhaps greater competition between the four initially, what we will see, once those four majors get rid of the people they are in real competition with, is no below-cost selling; and we will see them back to their old tricks.

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in support of Labor’s second reading amendments to the Petroleum Retail Legislation Repeal Bill 2006. Australians who do not have the luxury of getting fuel cards, like we all do, have been doing it very tough since the last election. When the Howard government was re-elected in October 2004, the average petrol price in the Perth metropolitan area was 104.7c a litre and to fill the tank of a Holden Commodore would have cost $78.52. As at June 2006, the average petrol price in the metropolitan area of Perth had risen to 134.5c per litre and to fill the petrol tank in that same Commodore in June this year would have cost $100.87. That means that, since the Howard government was re-elected in October 2004, the cost of filling that tank in the Holden Commodore has increased by $22.35. The average family in High Wycombe, a suburb of Perth in the marginal government-held seat of Hasluck, would easily go through a tank of petrol a week going to and from work, dropping their kids off at sporting events and training, or going to the shops. Four tanks of petrol a month—and I am sure many families use more than this—adds up to an extra $88 a month that a family has to find just to get around.

I have probably burnt through more diesel than anyone else in this parliament. In my 11 years as an owner-driver, carting freight to and from the northern sectors of Australia, including Darwin and the Kimberley region, I have filled the tank on my rig more times than I care to remember. When I fill it, I put in 1,500 litres of diesel at a time. The average cost of diesel in the Perth metropolitan area has risen from 112.9c per litre at the time of the last election to 143.9c a litre in June this year. It now costs $465 more to fill my truck with fuel than it did at the time of the last election.

Mr Acting Deputy President Hutchins, you are probably the last person I need to explain this to, because you would fully appreciate—as I am sure many senators on the other side of the House do as well, although sometimes they have a habit of forgetting—that goods do not just appear on the shelves in shops. Clothes do not accidentally fall onto the racks in the shopping centres. These goods are all carted on the backs of trucks. Unfortunately, when the price of fuel goes up so too does the cost of goods to consumers.

If we consider the needs of people in rural and remote Western Australia, we should realise that most of their food gets to them on the backs of trucks. These trucks are travelling all the way from Perth. If we also consider that the industry standard for heavy-freight fuel consumption is around one litre for every kilometre travelled, then we know that a round trip, for example, from Perth to Kununurra and back again—a distance of about 6,200 kilometres—would use approximately 6,200 litres of diesel. As a rough estimate it means that, since the last election, an extra $1,900 in fuel costs has been added to the cost of one roadtrain of freight to Kununurra. Thankfully, there are signs at the moment that fuel prices are going down; but, as we have all seen in recent years, it takes only a cyclone or a maintenance shutdown on a major pipeline to send the price skyrocketing once again. Sadly, this bill will do little to address these problems.

The main purpose of the Petroleum Retail Legislation Repeal Bill 2006 is to repeal the Petroleum Retail Marketing Sites Act and the Petroleum Retail Marketing Franchise Act. Labor supports the repeal of these acts for two reasons. The first reason is that the minister has already put forward a regulation that undeclares the four major oil companies from the operation of the Petroleum Retail Marketing Sites Act, so it applies to no-one. The second reason is that, even if the act applied to the four major oil companies, the Petroleum Retail Marketing Sites Act 1980 and the Petroleum Retail Marketing Franchise Act 1980 are outdated acts and serve no useful purpose in today’s petrol retail industry. Even if the minister had not undeclared the four major oil companies from the operation of the act, well over half the industry by volume of sales is not covered by current legislation—and that includes the retail stores Coles and Woolworths.

Over the years, the major oil companies have effectively been able to circumvent the act, particularly by way of creative multisite franchise arrangements. We have also seen in the market the emergence of partnership arrangements between Coles and Shell, and Caltex and Woolworths. The Petroleum Retail Marketing Sites Act, which was designed to limit the number of service stations the oil companies could run directly, does not cover Coles or Woolworths. The rules for participants are inconsistent and unfair. That is bad for industry and, far more importantly, it is bad for Australian consumers, who are doing it tough at the moment.

The repeal of these outdated acts is only the start of putting in place a regulatory regime needed to protect operators in the fuel retail sector, to prevent the abuse of market power by the refiners and to promote competition in the industry. The next step for the government is to introduce the Oilcode as a mandatory industry code under section 51AE of the Trade Practices Act. In 1998, the opposition said that they would support petrol reform as long as the Oilcode was agreed to, and it has taken the government another eight long years to get around to it. Labor have said all along that we should support the government in its efforts to repeal these acts and to reform the fuel industry, as long as the government implemented the Oilcode to address the gaps in the existing regulatory regime to protect smaller operators and consumers. Because of the Howard government’s incompetence and failure to show leadership, it has taken eight long years to secure agreement from industry and consumer representatives for an oilcode that was acceptable to all involved.

The Oilcode’s dispute resolution scheme will provide a low-cost and rapid means of addressing disputes as an alternative to legal action. These changes are likely to lead to increased competition in the sector, with the potential for positive impacts on fuel prices, particularly in rural and regional areas. Unfortunately, the Oilcode does not go far enough. Although the mandatory Oilcode, pursuant to section 51AE of the Trade Practices Act 1974, will place industry under a common regulatory regime with some protections, reform should also include amendments to section 46 of the Trade Practices Act in order to prevent the potential for abuse of market power.

It is to the continuing detriment of small businesses in the petrol retail industry that the Howard government continues to stuff around with delivering on the recommendations of the 2003 Dawson report and of the 2004 Senate inquiry. Australia needs a national transport fuel policy that guarantees supply for the long term and that gives us options to deal with global fuel supply and price emergencies. We need to reduce our dependence on fuel from unstable regions in the world. We cannot rely on foreign oil if the Strait of Hormuz is closed, if the Alaskan pipeline has to be fully shut down, if war escalates in the Middle East or if civil unrest shuts down West African production. It is obvious to everyone, except the government, that, if we do not have home-grown fuel industries in Australia, we will remain at risk. If we do not develop large-scale alternative fuel industries in Australia, we will increasingly be hostage to supplies from the Middle East, West Africa and Russia. To prevent our country becoming hostage to foreign oil, we need to begin weaning ourselves off traditional fuels and to develop domestic alternatives.

High petrol prices are driven largely by the high price of crude oil. Oil is a finite resource. We are running out of oil. On the basis of the law of supply and demand, demand for fuel is going up and supply is coming down, so the price is naturally going to go up. When the price of crude oil is high, it is all the more urgent that governments act. We have to wean ourselves off Middle Eastern oil. In fact, we have to wean ourselves off all traditional fuels. Unfortunately, the Howard government is asleep at the wheel. If it has taken the government eight years just to develop an Oilcode, I have no faith that it will be able to develop an industry plan to wean Australia off foreign oil.

The Howard government is all over the shop on its policy towards alternative fuels. In the last parliament alone, the Howard government changed its mind not once, not twice, but on three occasions with respect to the excise regime not only for ethanol but also for the LPG industry. Despite his May 2002 view that applying an excise to ethanol and LPG was a bad idea, the Treasurer announced in the 2003 budget that he would do just that. He announced that biofuels and LPG would be subject to an excise from July 2008. In December 2003, guess what? He changed his mind again, announcing a new excise regime to apply from July 2011.

Senators will be aware that there is a Senate inquiry currently underway into Australia’s future oil supplies by the Rural and Regional Affairs and Transport References Committee—which I know has now changed its name. The committee, of which I am a member, along with Senator Milne and Senator Joyce, has taken evidence on a range of matters, including on the question of whether the world oil supply has hit peak oil. Briefly put, peak oil is the point at which world oil supply peaks before beginning to fall. With the Senate’s indulgence, I would like to share some statistics that show that Australia at least seems to have reached peak oil in domestic production.

In 1998-99, the Australian production of crude oil, condensate and LPG came in at 32,265 megalitres. This figure rose steadily to 42,279 megalitres by 2000-01. Since then, Australia’s production of crude oil, condensate and LPG has fallen steadily to 29,995 megalitres in 2004-05. Unless there are more major finds and capital investment in the very near future, it appears that Australian production hit peak oil in 2001-02.

As a consequence of our reducing domestic production of crude oil, condensate and LPG, we have become increasingly reliant on imported fuels to meet our consumption. A consequence of this is that the value of petroleum imports as a percentage of the value of total imports has increased from 3½ per cent in 1998-99 to around 10 per cent in 2005-06. No wonder Australia’s trade deficit is looking so crook.

Australia’s capacity to fulfil its petroleum consumption needs from its own petroleum resources has fallen markedly in recent years, at the same time as there has been an escalation in the world demand for crude oil. From 2001-05, world oil consumption increased by approximately eight per cent. In the previous five years, world consumption of oil grew by only 4.3 per cent. Furthermore, from 2001 to 2005 the average price of a barrel of crude oil increased by approximately 150 per cent. In the five years previous, the world price increased by only approximately 3.5 per cent.

In the face of all this, the entirety of the Prime Minister’s response has been to repeal two acts and give a handful of Australian motorists a couple of thousand dollars to change over to LPG—that is, if they can find someone with the skills to do the conversion. The point is that the Howard government has let Australia down badly. Labor, on the other hand, has a plan to reduce our dependence on imported oil and to put in place new policies that can encourage alternative energy use. The solution is home-grown fuel industries in Australia. That requires that we accept that there are policy options available to ensure that the wheels continue to turn for Australian consumers and Australian industries to ensure that Australians can afford fuel and to ensure that Australian industry can afford energy.

I am advised that there are currently seven refineries in Australia with a combined capacity of around 800,000 barrels a day. This is more than sufficient to meet the entire Australian demand, currently about 750,000 barrels a day. But I am also advised that, at present, alternative fuels make up less than two per cent of the overall market for petroleum products. The two most common types of biofuels that are being developed and used are ethanol and biodiesel.

Contrary to Senator McGauran’s rantings about the Australian Labor Party, the Labor Party started the ethanol industry in this country with capital assistance grants back in 1993. We have supported pushing out further the application of tax on ethanol. We did not oppose the government’s total removal of import competition. We have supported all the later rounds of capital assistance grants for new plants. We have done all the ethanol industry has asked of us, short of supporting mandating.

Ethanol is good for regional jobs, it is good for the environment and it is good for the agricultural sector. It helps the competitiveness of independent service stations because they can blend the product—having no tax makes them more competitive. But we make only 37 million litres of it in this country at the moment. If we mandated it at 10 per cent, we would need at least two billion litres.

Even Senator Boswell—yes, Senator Joyce: Senator Boswell, the cultural attache from the Queensland National Party—said on 14 August 2006 that the Howard government needs to do more to promote ethanol fuel. According to Senator Boswell, the Howard government said:

... really have to get fair dinkum about ethanol and bio-fuels because we’re only playing at the edges at the moment.

I could not agree more with Senator Boswell. I suspect Senator Boswell knows that only the Labor Party is serious about reducing Australia’s reliance on foreign fuel. Senator Boswell knows he is part of a government that got elected in 1996 promising to keep Labor’s ethanol bounty but scrapping it in their first budget. He knows he is part of a government that attacked the ethanol industry and then rearranged the support so that it helped only one person. The Prime Minister needs to understand that the ethanol industry is about more than just helping out his mate Dick Honan.

The other main biofuel is biodiesel. Biodiesel can be made from several types of oils such as soybean, rapeseed and vegetable or animal fats. Biodiesel fuel is biodegradable, requires minimal engine modification when used either as a blending component or as is, and is cleaner burning than the diesel it replaces.

I would like to take the opportunity to congratulate Gull Petroleum in Western Australia, which in a number of its service stations is offering biodiesel to consumers as a fuel additive in 20 per cent blends with petroleum diesel. They have set a fine example to other retailers, and I hope their product is well received by the market. The Labor Party has always been a great supporter of both gas to liquids and coal to liquids, which are integral to the commercialisation of clean coal technology for power generation in Australia and which are part of the environmental debate.

Although the technology to produce GTL diesel has been available since the 1920s, it has been too costly to be commercially viable. Over the last decade, however, costs have reduced by 50 per cent, and there is reason to believe there will be further progress in cost minimisation and process optimisation. The advantage of GTL diesel is that it contains almost no sulfur or aromatics and is well suited to meet current and proposed cleaner fuel requirements of developed economies.

It is now almost five years since Senator Minchin, the then minister for resources, appointed a GTL task force to investigate the feasibility and benefits of establishing a GTL industry in Australia. Five years later, no action has been taken. It is just not good enough.

Another policy initiative the Labor party has announced is Labor’s green car challenge. Around 18 per cent of new cars in Australia are bought by federal, state or local governments. Labor has said that, if the Australian car industry could build a competitive, value-for-money green car, a federal Labor government would put it into the Commonwealth fleet. As Mr Kim Beazley, the Leader of the Opposition, put it, ‘You build it; we’ll drive it.’ Labor will use industry policy and procurement policy that is available to the Commonwealth to make sure that we restructure the Australian car industry in a way that ensures not only good outcomes for the environment and lower fuel bills for Australian families but also good outcomes for the Australian economy and Australian jobs.

This policy has the support of the Australian Manufacturing Workers Union, which does an excellent job representing and protecting the workforce in the motor vehicle industry. Like Labor, the AMWU knows that, if we stand still while the rest of the world is moving forward, we will get left behind. Fuel prices are hurting Australian families and adding inflationary pressures to the economy. The Howard government has been asleep at the wheel when it comes to developing alternative fuels to reduce Australia’s reliance on oil. Labor has a vision for an Australian economy that does not buckle under the weight of a global oil shock. That is why Labor released a blueprint in October last year that outlined plans to develop existing alternatives, for example, LPG, ethanol and biodiesel; to develop emerging alternatives, for example, gas to liquids; and to develop future fuels, for example, hydrogen. Labor’s plan stands ready to be put into action. If all the Howard government is going to do is tinker around the edges, then it should call an early election so Australians can get the kind of leadership they deserve.

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

We just heard a fascinating speech from Senator Sterle—in fact, I felt like checking what we were talking on; it sounded like we were about to move a mandate on ethanol, for which he would have had my support. But he was not. Although he gave a fascinating speech, we are actually talking here today about the Petroleum Retail Legislation Repeal Bill 2006.

I want to pick up on a couple of points of Senator Sterle’s before we go much further. He talked about his overwhelming support for the biodiesel industry—no doubt in Western Australia there is a lot of support for the biodiesel industry. I remember Labor frantically knocking down our doors a few months ago asking for support for the biodiesel industry. However, what surprised me then, after Senator Sterle’s comments, was the way the vote went in the chamber. The only people who actually supported a move to assist the biodiesel producers of Western Australia were me and a senator from the Democrats. Senator Sterle actually voted to get rid of the biodiesel industry in Western Australia. We should put that back on the record, because he seems to be getting a bit shifty. He has been here for a little while, and he is getting a bit shifty now. He wants to ride both sides of the fence.

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

Senator Sterle interjecting—

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

You were not in the chamber?

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

I was in the chamber; you weren’t.

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

I was in the chamber. It is on the record—as is your vote against biodiesel, Senator Sterle. He also came in and gave a great hoorah about where we are at with ethanol. I can assure you that a mandate on ethanol is National Party policy. If you are about to join us in that push, I welcome you. You will have a lot of support on that day. That would really check your colours on the other side of the chamber. We would see whether they are going to walk the walk or whether they are talkers. They look like talkers over there—they are not really serious about it—but I would welcome them. If they want to come out of their burrows and be fair dinkum about supporting the ethanol industry, I challenge them. You must be getting up through the ranks of the Labor Party right now, Senator Sterle. I challenge you to go to your caucus and say, ‘Let’s get fair dinkum about this. Let’s move a mandate,’ because they will not. They have not quite got the ticker for that. They have the ticker to talk, but they do not have the ticker to walk. That is the difference.

But it is encouraging. It was a marvellous little excursion into the facts. I agree with much of what Senator Sterle said about the trade deficit, the benefits of getting an alternative fuel and the problems we could have on the Strait of Hormuz, and no doubt other parts of the world as you so choose. I have no problems with that—you are probably telling the truth on all of those issues—it is just that you do not want to do anything about it. The option is there for the Labor Party—if they want to do something about it—to come out and say they are going to mandate ethanol. I will support them, but they will not do it.

But let us go back to what we are actually talking about. We are talking about the Petroleum Retail Legislation Repeal Bill 2006. It looks like the Labor Party will support it, so we can basically say from that that the legislation will go through. A key issue here is that, in 1980, when this act was brought about, they passed it because they had a belief in the participation in the retail of fuel by a wider section of the community. That sentiment was true in 1980, and it is true now. There should be a wider participation in the wealth that is generated from the retail of fuel.

It is true that Coles and Woolworths have circumvented that over a period of time, and that issue does need to be dealt with, but we are not dealing with it through this legislation in this form. There has to be an amendment brought into this legislation that protects independents in the market. Independents must be protected. Why is it that, with this piece of legislation going forward, we have said that Coles and Woolworths have circumvented the intent of the 1980 act, but instead of dealing with the problem, which is the circumvention by Coles and Woolworths, we are going to bring about a piece of legislation that is going to put the independents out of business? Why is that? How did that come about? Surely, if it was true in 1980 that it is good to have mum and dad businesses, a wide participation in the retailing of fuel, it would be as just and as good now to have a wide participation in the retailing of fuel. Why aren’t we amending this in such a form as to allow a remnant participation by independents in the market? We have heard from Senator Sterle, from the Greens and from a whole range of people how the independents are instrumental in bringing about price discounting in fuel and how the independents are instrumental in bringing about fair competition in the market, in keeping the others honest. But there is nothing in this legislation that actually protects them, and that is a concern for me.

I will be moving an amendment that will quarantine a section of the market for independents. It is as simple as that. Why? Because it is inherently good for Australia. It is inherently good for the market. It stands to an ethos that I have believed in since I gave my maiden speech—that is, an overcentralisation of any market is bad policy. It is bad for the freedom of this nation. It is ultimately bad for the consumers. When you have an oligopoly relationship, as we obviously have in the oil industry, the government has to step into the fray and promote legislation to protect them. The issue is basically how we go about it.

We have heard from the Labor Party. They have talked about the Dawson recommendations, and everybody is in furious agreement. Everybody agrees that we have to go somewhere with the Trade Practices Act. I hear that, but what are we going to do with this piece of legislation, right now, that is going to protect the independents in the market? It is one of the fundamental things when you drive up the road when you are campaigning in Queensland. You stop at a service station, you walk in and you ask: ‘How are you going? What can I do to help you?’ They almost knock you over by saying: ‘What you can do to help me is allow me to buy fuel at the price that that service station is selling it at. That’s what you can do for me. If you can help me buy fuel at the price that that service station is selling it at, you’re going to allow me to stay in business.’ When people say that, it hits a chord with you, and you think: ‘Well, I should go about trying to assist those people to stay in the market.’ In going forward during our Senate campaign some two years ago now, it was a fundamental driver to try and make sure that we keep the wide participation of Australian people in the retail market. Whether it is retailing fuel, retailing clothes or retailing groceries, there has to be a wider participation in that market.

How are we going to do that? We are going to have to do that by basically bending the rules to move away from this so-called free market, because there is no free market. There is no free market in anything in this world. If there truly was a free market, I would be able to go out the front door of my house, set up a bowser and start selling fuel, no matter what it was, without any controls, checks or balances whatsoever. But you cannot do that. So what we really have in Australia is a partially regulated market that we call a free market. Because it is a partially regulated market, it works in favour of the incumbents. The incumbents are the two major retailers and the four major oil companies.

The mantra that I have kept saying is that the purpose of the economy is not to produce the lowest priced product for the end consumer—because we hear that all the time: ‘This is going to bring lower prices.’ So it will, but the purpose of the economy is not purely to produce lowest priced products for the end consumer. That may be a consequence of a good economy, but it is not the purpose. The purpose of the economy is to create the greatest connection between the wealth of a nation and its people, and to do that it is vitally important that you have a small business sector. Where do you see the small business sector reflected in the fuel market? It is reflected in the independents.

It is going to be interesting to see how the pennies fall on this one. I will make a prediction. I predict that the Labor Party will be supporting this. Why? Because the major oil companies have got to them, that is why, and they are going to fall in line just to show that they too can put families out of business when required. It would be brave to stand up and say that we are going in to bat for families, that we are going to quarantine a section of the market to be exclusively the domain of independents, because we agree with the intent of the 1980 act—it was true in 1980; it is true now. All through this chamber, somewhere between 1980 and now, the belief in independents and a wide participation in the retail market has gone, for political convenience. Why has that happened? Where are we drawing it from?

I heard Senator Sterle talk about being an owner-driver. It must be a wonderful thing being an owner-driver, being your own boss. It must be a wonderful thing to determine your own future. It must be a wonderful thing to be in business for yourself. But it seems a shame: I believe that, today, you are not going to protect the right of other people to stay in business—that, for whatever reasons, you are going to justify to yourself why you have to let these people go. You are going to do it because the hierarchy in the Labor Party have told you to do it, and you follow orders. You do exactly what you are told. That is what is going to happen today. It is going to frustrate you because once more, just like you did over the biodiesel producers of Western Australia when you voted for that piece of legislation, today you are going to do over the families—families very similar to those of your owner-drivers. I do not know whether it is worth it. You can do something really worth while here by going in to protect some of these people.

So I am going to move an amendment to the Petroleum Retail Legislation Repeal Bill. I do not know how it will go. The amendment will talk about basically putting in some sorts of controls, getting 25 per cent of the market and keeping it aside for the small business operator, for the mum and dad operator. That will give them an ability to breathe, an ability to live. That will not allow them to go down this path where they are going, where they have to be driven into the ground and have every inch of commercial blood squeezed out of them by the four major oil companies and the major retailers. It will say that we will allow a section of the market for these people to survive in. We will say to them that Australia is a market that you can participate in, that we in Australia will protect your fundamental right to go into business—your fundamental right to exist in Australia in a manner that goes beyond just working for one of these companies—and that you can actually own and have further control over your own destiny, because that is the philosophical issue here.

One of the other issues that we have been talking about in respect of the Petroleum Retail Legislation Repeal Bill is the so-called transparency of the terminal gate price. Unfortunately, I do not believe it is going to be transparent. What we would no doubt have would be a documented price. If you were mad enough, you could buy fuel at that price, but it would not be the price that everybody else would be getting it at and it certainly would not be transparent.

Transparency will be guided by commercial-in-confidence matters. You can bet your life that if it is transparent—if it is on the internet, if everybody can see it—it is not the price that it is being purchased at. That is one thing I can assure you of, yet tonight we hear both sides of the chamber talking about how good this transparency factor is going to be. I wish it were truly transparent. I wish we had an ombudsman to monitor it and tell people what the actual margin is that they are getting. We in this chamber need to work towards getting greater transparency because greater transparency will provide fairness and keep those independents in the market.

We have talked about independents: we have talked about why they are good for keeping the price down—because they promote competition—and we have talked about how independents are fundamentally a good reflection of a freedom in Australian society, the freedom to go and buy produce and make a profit out of it. Hopefully all of us on the conservative side of the chamber believe in the freedom to go into business. It is a part of what we are.

We have heard Senator Sterle talking about how he was an owner-driver. He talked about that with some gusto as if he believed in it—and I believe he does. Obviously, his freedom was to be in business and to shape his own destiny. That is one of the reasons why we support independents, whether they are in the fuel industry or whether they are in the retail industry. Whatever industry it is, the freedom to go into business should be manifest in what being an Australian is and be part of what we are ever-vigilant about protecting.

There is another good thing about independents. We believe—Senator Sterle believes and, having heard Senator McGauran, I know he believes it; everybody seems to be in raging agreement—in biorenewable fuels. We have heard from Mr Beattie that he is going to bring them in in Queensland. It sounds like the Labor Party might be getting close to talking about a mandate—great day when that happens; let us hope. We hear that everybody is in raging agreement that they all believe in biorenewable fuels. The fact is that the best mechanism for getting biorenewables out into the market is the independents. You get no better reflection of that than in this town—a town of 320,000 people and our nation’s capital—where, of the four fuel stations that are selling the E10 ethanol, three of them are independent and one of them is a major. That in itself goes to show you yet another relevant factor as to why we need independents in the market.

Why would the independents want to sell E10? I am going to hazard a guess here: because it gives them the competitive advantage that they know they cannot possibly get it at the terminal gate price. With the passage of this legislation without protection for independents, we are going to have the independents having as their supplier an unencumbered major competitor and, given the way that markets work, that will bring about the demise of the independents. That is crazy. Imagine your supplier, the person who supplies you with the product, being also your major competitor—and there is no control whatsoever on how you deal with them, because, since the Boral case, section 46 laws are lacking; they do need to be strengthened. This is why we need a section of the market that is specifically quarantined for independents, and we should not be ashamed to say we are manipulating the market to protect a basic freedom of the Australian people: the freedom to be in business. So that is going to be what we have to deal with.

This amendment will be moved in such a way that we protect independents to promote biorenewable fuels and we protect that manifest absolute freedom to be in business. We protect independents to keep competition in the market so we have price leaders and price discounting. That is one of the reasons why this bill in its current form—unamended—is lacking.

I have seen some other amendments. There is an amendment that was bandied around by Senator Fielding. The intent was good but it talked about no major having more than 25 per cent of the market. Unfortunately, four 25 per cents equal 100 per cent, which means that they would have the whole market, and if you include Coles and Woolworths that is 150 per cent of the market. I applaud his attention to it, but we need to go a bit further than that because we are not actually protecting independents; we are still leaving them out on a limb.

What this amendment does is say: ‘Let us look at this in another way; let us look at 25 per cent of the fuel being quarantined for those who have been determined to be independents.’ What is an independent? I cannot name everyone that it is but I can tell you who it is not. It is not Caltex, it is not BP, it is not Mobil, it is not Shell, it is not Coles and it is not Woolworths. That is who it is not.

That 25 per cent of the market should be quarantined for those people who are not in that group to go out and still have a corner of the market to participate in. The day that we lose independents is the day that we have an oligopolical relationship in the fuel market. When you attain a position of strength, you exploit it and the best way to commercially exploit your position is to put up prices; in fact, it is what you have a duty to your shareholders to do. When you get into that position, you exploit it by putting up prices—and I tell you what: four oil majors and two major retailers are obviously exploiting the price of fuel.

I will leave you with one final thing. The price of diesel in Iran at the moment, with all its problems—I am not suggesting that we go there; this is just to give you an idea of the margin in this product—is about 3c a litre. So the difference between 3c a litre and what we are paying for it is either government taxes, production costs or profit. I think there is a lot more to it than the terminal gate price. I suggest that a vast amount of the profits are made offshore and do not see their way into our country. If we lose the mechanism of the independence to protect our position then, as a nation, we will lose in the long run.

Carol Brown (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I rise to contribute to the debate on the Petroleum Retail Legislation Repeal Bill 2006. I do so with petrol prices soaring and Australian families battling to pay their petrol bills. Australians are more concerned than ever about record high petrol prices as we have seen global oil prices triple over the past three years. Reform of the petrol retail industry, including the repeal of the two acts dealt with in this bill, has never been more important.

Last year higher petrol prices meant Australians spent approximately $2.3 billion extra on petrol. To further demonstrate this point, I draw the Senate’s attention to an article published on 9 August in the Examiner newspaper in my home state of Tasmania which detailed the cost of living for families. Using Bureau of Statistics data, the article recreated an average family to illustrate family spending and pressures on the household budget. It said that an average family is made up of two parents and two children, aged nine and 12, has a combined take-home salary of $3,828 a month and is paying off a loan on an average family car. After meeting their mortgage expenses and paying for food, fuel, insurance and education, there is little money left over for this average family to spend on life’s luxuries. The article referred to, amongst other things, the impact of yet another interest rates rise and rising petrol prices. It said:

The biggest shock to families has been the rising price of petrol. The price of standard unleaded petrol has jumped from $1.18 to $1.45 in just a year, adding $59 a month to the budget.

This represents a massive change of 22.6 per cent in the household petrol budget from August 2005 to August 2006. This is on top of the average Tasmanian family paying at least $176 more a month for goods and services than they were paying in August last year. Tasmanians are paying 4.1 per cent more at the checkout, 5.8 per cent more on education costs and up to 5.8 per cent more on health costs, and the price of standard unleaded petrol has jumped from $1.18 to $1.45 in less than a year. These figures do not take into account the cost of child care—the latest available figures show that high-quality child care costs $260 a week in Tasmania—nor the impact on family-work balance of the government’s extreme Work Choices legislation.

I support Senator O’Brien’s comment that it is most worrying that the Howard-Costello government’s answer to everything, as reflected in the recent budget, is simply to spend, spend, spend. Unfortunately for average Tasmanians they are now forced to spend more on interest rate hikes, petrol and groceries. It has become blatantly obvious that the government has only two policies: sell and spend. The government wants to sell Telstra and Medibank Private, regardless of the cost to the community, and to spend its way out of trouble using taxpayers’ money.

The Petroleum Retail Legislation Repeal Bill 2006 repeals the outdated Petroleum Retail Marketing Franchise Act 1980 and the Petroleum Retail Sites Act 1980. These acts cover only part of the petrol retail industry; well over 50 per cent of the industry, by volume of sales, is not covered, including the supermarket chains Coles and Woolworths. The acts discriminate between large and small business, and the rules are inconsistent and unfair. More than 50 per cent of the industry, by volume, is not regulated at all. Petrol retail reform is a good step forward to give consumers more confidence, but reform, we also accept, has been a long time coming.

As has been stated by my colleagues, petrol reform has been on the Howard government’s policy agenda since 1996. In 1998 the opposition appropriately said that it would support petrol reform as long as the Oilcode was agreed to, but it has taken this government another eight years to get to that point. The Oilcode, which will be introduced as a mandatory industry code under section 51AE of the Trade Practices Act 1974, will finally and appropriately bring the industry into a common regulatory regime with better protections for market participants and consumers. The Oilcode will improve the protections available to commissioned agents and independent operators, who currently do not have the protections available to franchisees. Both franchisees and commissioned agents will also appropriately have access to a low-cost dispute resolution system for the first time.

I think we have to accept that there is no longer a capacity for short-term fixes. We need a national transport fuel policy that guarantees supplies for the long term and gives Australia options to deal with global fuel supply and price emergencies. That is the debate in Europe, that is the debate in North America, that is the debate in Asia; but unfortunately it is not the debate the Prime Minister wants in Australia, because it requires tough decisions and leadership.

Labor’s blueprint will provide a leading role in emerging energy sectors to boost our export performance and take advantage of opportunities in world markets. Labor wants to quash this threat of reliance and make Australia more self-sufficient in developing fuels that will become cheaper in the future. In October last year Kim Beazley launched Labor’s blueprint ‘Developing the Australian transport fuel industry’. I would like to quote from Kim Beazley’s address at the launch of the blueprint. He said:

If Australia is to grow, to prosper and be secure—we must be able to stand on our own two feet in the world—whether that be militarily, in counter terrorism, in educating our people, in providing decent health care, decent infrastructure or in keeping our economy strong.

                 …           …         …

My aim, the aim of the Australian Labor Party is to develop a diversified Australian fuel industry. A diversified Australian fuel industry making Australia a more self sufficient country.

We must increase the use of Australian transport fuels and reduce our reliance on foreign oil. We must develop and use those fuels that will become cheaper in the future. More fuel–more types of fuel. Cleaner fuels—cheaper fuels—Australian fuels.

We need national leadership to develop:

• existing alternatives like liquid petroleum gas, ethanol and
• emerging alternatives such as compressed natural gas, liquid gas and stored electricity; and
• future fuels, such as hydrogen.

We also need to develop the technologies to make it happen. We do this because our transport fuel markets need a fresh blast of competition.

We must make Australia less vulnerable to external shocks.

We must make Australia less reliant on the foreign oil affecting our trade deficit and foreign debt.

We must play a leading role in emerging energy sectors to boost our export performance and take advantage of opportunities in world markets. We must invest in preserving our environment by diversifying our fuel base beyond petrol to biofuels and gas and hydrogen.

I am pleased to support the bill, which repeals, as I have said, two outdated pieces of legislation. I endorse the Labor amendments that seek to, and I echo the words of my colleagues in the House, Mr Martin Ferguson and Mr Fitzgibbon: (1) strengthen the ACCC’s powers to investigate petrol prices by removing the requirement that the ACCC needs the Treasurer’s consent; (2) strengthen the Trade Practices Act to provide greater scope for dealing with abuse of market power; (3) find more oil and use more gas in Australia by re-examining the depreciation regime for gas production infrastructure, allowing the selective use of flow-through share schemes for smaller operators, and conduct a feasibility study into converting gas into clean diesel in Australia; and (4) protect and promote the growth of ethanol, biodiesel, LPG and CNG by a 2009 review of the government’s plans to levy an excise on these fuels. The review will consider whether the excise should be deferred. I call on government senators to support Australian families and support Labor’s amendments aimed at strengthening the Trades Practices Act to protect against the abuse of market power and to address the rising cost of petrol. I commend the amendments to the Senate.

Steve Hutchins (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Mr Acting Deputy President, for giving me the opportunity this evening to speak on the Petroleum Retail Legislation Repeal Bill 2006 which has now seen the light of day. This piece of legislation is a bit of a catch-up, as has been outlined not only in the House of Representatives but also in the Senate this afternoon by opposition and other non-government speakers. The issue dealt with in the legislation is how to approach the misuse of market power and get compliance. It has taken a long time for this piece of legislation to get to the parliament. This issue was raised some years ago and it has taken—as my colleagues both in the House of Representatives and here have outlined—a long time for this legislation to get here. It seems that the government has only just discovered that there might be a misuse of market power not only by the oil companies but also by the major retailers and the suppliers.

When you and I were growing up, Mr Acting Deputy President Marshall, there were seven oil companies which used to retail in this country. I was trying to remember the other three as I got to my feet. They were: Esso, Ampol and Golden Fleece. Together they used to make up the ‘seven deadly sisters’ that used to manipulate the petroleum and oil market in this country. Now we are down to four and both Coles and Woolworths are using their market share to manipulate and control the market. If people do not think—when they see that 4c a litre discount when they drive into Caltex or Shell—that Coles and Woolies have not in some way or another made them pay that difference in another area while they have been shopping there then they are a bit foolish. Other speakers have questioned the continued relevance of what the government is putting forward here this evening. Nevertheless, it does recognise that there has been a change in the nature of retail, the marketing and the supply of this vital energy source.

I take note of Senator O’Brien’s comments this afternoon and his foreshadowed amendments. It seems to me that there are few parties in this parliament that have recognised that there is a looming crisis and that we need to do something about it. I welcome the fact that the rural and regional references committee gave an interim report in which it in essence begged that we start preparing for our falling and failing oil suppliers. The government has not done that. If you observed the government, particularly in the passage of what has been proposed in this bill, you would see that the government’s inactivity and inertia seeps through the ranks. It seems to be a case of ‘it’ll be alright mate; it’ll be alright Jack’—a case that these problems are not here to be addressed. It is almost a case of ‘Let them eat cake.’ That is what it seems like to me. There is no outline or plan to deal with the possibility that within three years we will be paying $2 a litre for fuel.

What are we going to do then? Are we going to continue to pay the price for 10 years of neglect by the Howard government? What are we going to do when it appears that our energy supplies will be the whims and fancies of undemocratic regimes in either Africa or the Middle East? How is the government proposing to guarantee our oil supplies and our standard of living for the future? What are the initiatives of the government in this field? Clearly, I cannot see any. Maybe government speakers or the minister, when speaking in reply, may outline some. But it appears to me, and to a growing number of Australians, that there is an inertia amongst the government, a lack of attention to this, and that this inactivity will make us pay in the future, particularly as we start to pay $2 a litre for fuel. That is what potentially could happen within the next few years. As we pay more to fill up our vehicles, we will reduce our lifestyle and that will place enormous pressure on the home. I am sure that the government does not particularly wish to see that—nor do we—but there is no answer.

For 10 years now the government has been in power. It is no longer going to be relevant for ministers or backbench government MPs to get up and say that under the Keating-Hawke governments this, that or the other thing happened. At least in the Hawke and Keating governments there was initiative for reform. Some of it was painful for not only the government but the Labor Party itself. Nevertheless, over those 13 years they did grasp the nettle and did act in accordance with what they thought was in the best long-term interests of this country. But, in this particular area, there is no evidence that that is occurring. In fact, the consequences of this lack of initiative by the government are these: we have labour shortages, we have an erosion of our skills base, our infrastructure is choking and we have inflationary pressures—all as a result of a lack of initiative by the Commonwealth government under John Howard.

What has been the government’s answer to this looming energy crisis? Only recently the Prime Minister made an energy statement in which the emphasis was on LPG. One of the problems, as outlined by previous speakers, is that, for a start, not many places are available to convert vehicles to LPG or repair those vehicles. In fact, there are hardly any places in regional or rural Australia—and it is good to see some National Party senators in here this evening who may be able to reply to that.

As I said, there are no outlets. In fact, there is not a skilled workforce available out there, particularly in regional and rural Australia, for these conversions or the repair to those vehicles to occur. It has been highlighted that, in some cases, if one wishes to take up the option that has been provided by the government, one may wait up to two years for this to occur. This initiative was in response to the growing fuel crisis. One would have thought that the spin doctors, who are so well paid—there are so many of them—within the Howard government would have checked what may have been the situation before they put the Prime Minister in the spot he has been put in. But that did not occur. The fanfare was announced and, of course, once the details were exposed to the Australian community, it was seen to be the farce that it was and is.

Over the past few years Labor have put forward alternatives to the current fuel situation. As outlined in our amendments, we do not want to have our country held ransom to these undemocratic regimes in Africa or the Middle East. We do not want to be blackmailed by people who do not share the same values as us. In the 1993 budget, Paul Keating introduced 18c a litre production assistance for ethanol. John Howard, in his government’s first budget, withdrew that assistance. Since that time, the Howard government has changed the excise regime for LPG and other biofuels at least on three occasions. In May 2002, Peter Costello said that applying an excise on ethanol and LPG was a bad idea, and he did just that in the 2003 budget. In that period, between May and December of that year, it left the LPG industry in turmoil.

Our amendments offer a road map: they offer a vision of what needs to be done. That is not outlined either in the legislation to fix up a piecemeal bit of operation that is now before us or in any of the Prime Minister’s statements on our energy needs in the future. We in the Labor Party know the urgency of this matter. We know that it needs to be addressed, and we cannot put it under the carpet and hope that it will be dealt with by the next government. We know that we have to come up with solutions so that we can prevent blackmail of our country in the future. That is what is in our amendments.

If we are deprived of energy security in the future, as Martin Ferguson, our shadow minister, has said, it could be the commencement of a Cold War where, in a figurative sense, we are denied or deprived of food and fresh water or a safe and comfortable hearth, and where the certainty for trade and commerce will be removed because of the growing difficulties within the international situation. This will be the commencement of that difficulty. It will be a threat to our lifestyle and our standard of living. That is what is at stake, and we are calling on the Commonwealth to be far more broad and far reaching in its grasp of what the future energy needs of this country are. That is why, as I said, the government needs to understand this looming crisis. It needs to address it—and it can be addressed, in a small way, by the support of our amendments that are before the chair.

John Hogg (Queensland, Deputy-President) Share this | Link to this | Hansard source

I must declare at the outset of my participation in the debate this evening a vested interest in the outcome of the Petroleum Retail Legislation Repeal Bill 2006 and related matters. That is brought on by the fact that, sitting in front of my house, there are generally four vehicles, one of which is mine and the other three of which are driven by my adult children. The price of petrol, the consumption of petrol and the alternative fuels that might be available to them, not only now but in the longer term, are therefore very much of interest to me.

But, having said that, I am genuinely concerned for people of lower and fixed incomes who have access to motor vehicles who need them for their day-to-day lives, to either get themselves to work or for basic family needs, and find themselves challenged by the price of fuel, fluctuating almost on an ad hoc basis, in the various parts of Australia. Strangely enough it seems to be that, around weekends, the price magically jumps. No-one seems to know why; no-one can give a logical explanation. Sometimes we have not just daily but hourly fluctuations in petrol prices. That comes as a grave concern indeed. And last but not least is the old public holiday trick.

So, whilst we see in this instance a particular bill being repealed, what might follow in the wake of this bill comes as a grave concern. I know there is talk of oilcodes and other things such as that. But the legislation that is being repealed has been circumvented. The information I have says it has been eroded over time through both High Court and Federal Court decisions. Labor therefore supports the repeal of this legislation. But, as Mr Fitzgibbon said in speaking to this bill in the other place, that was contingent upon changes being made to the Trade Practices Act, particularly in respect of section 46, to ensure that there was no use of the market power that clearly rests with the fuel distributors in this country.

It was only a couple of years ago that I had the pleasure of being briefed by Exxon in the United States. My recollection of the briefing I had from them is that motor vehicle use and petrol use in the United States would continue at an exponential rate. It seems to me that, in spite of the changes in petrol prices in this country, there is no slackening off of the use of cars or fuel. One only has to go on the roads in any of our major cities, as I do from time to time when I visit them. The use of the market power of the oil companies is therefore of great concern. Also of concern, as my colleague Senator Hutchins said, is access to fuel supplies themselves and the alternatives to petrol or petrol substitutes that might be available over a period of time.

The minister, I understand, moved a regulation that undeclares the major oil companies under the existing legislation—which, of course, therefore renders the current legislation fairly useless. It covers no-one in particular and no-one in general. So the legislation needs to be sensibly repealed. Central to this, though, is not just the repeal of this act but the need, we on the Labor side claim, for changes to the Trade Practices Act such that an attempt can be made to give proper protection to motorists at large.

This was spelt out by the Labor senators in their additional remarks to the report of the Senate Economics Legislation Committee which looked into the details of this piece of legislation. That report was tabled in May 2006. I want to quote from the ‘Additional remarks from Labor Senators’ because I think that they are clearly pertinent in this matter. They will, of course, be known to those who were involved in the inquiry that was conducted by the economics committee. They acknowledged that the Petroleum Retail Marketing Sites Act and the Petroleum Retail Marketing Franchise Act 1980 and associated regulations represented, as they said:

... an outdated model for regulation of the petrol retail sector.

There is no doubt that we have conceded that. That is not in question. But they go on to say, in the second paragraph of those remarks:

Labor Senators however, are of the view that the principle issue in encouraging competition in this sector, and indeed across all markets, is strengthening provisions in the Trade Practices Act against misuse of market power.

And that, of course, is the real nub; that is the real key. They go on to say:

It is well known that section 46 of the Trade Practices Act has been rendered inefficient and ineffective because of a number of Federal Court and High Court cases.

They go on then to give some examples. At the conclusion of that paragraph, they say:

The ACCC has effectively given up taking cases under section 46 of the Trade Practices Act because it knows it has now been rendered ineffective.

Not surprisingly, their conclusion arising out of that is:

Therefore, Labor Senators believe that the most efficient market outcome will not be achieved unless s46 reforms are implemented concurrently.

So, after acknowledging that it is appropriate for this legislation to be repealed, the Labor senators then clearly outlined a process with a series of recommendations to strengthen section 46, which would see that protections were put in place against the misuse of market power by oil companies. I think that is very important indeed.

At the outset of my speech, I declared an interest. I said that four cars sit on the front driveway of my home—and a lot of people around here probably cannot relate to that. As I said, three of those cars I never get to drive and are driven in rotation. Of course, every time the price of petrol spikes or changes, my children invariably let me know.

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

Yes, it is like that.

John Hogg (Queensland, Deputy-President) Share this | Link to this | Hansard source

I hear that Senator Minchin suffers from the same indignation as me. However, clearly, this is of real concern for people out there and it must be addressed. We as an opposition have put forward, in a sensible manner, the issue that we see as the key in this: the misuse of market power by the wholesale and retail sides of the petrol industry. However, we will not be satisfied with that alone.

Labor has dealt with this bill in a fairly positive manner by putting up a second reading amendment that sets out a constructive approach that we believe needs to be adopted post the repeal of this legislation. I will refer just briefly, therefore, to the second reading amendment. I do not know how many of my colleagues have referred to this amendment already, but it seems to me that some of its points are quite logical and sensible indeed. It calls on the government:

... to require the Department of Industry, Tourism and Resources to report to the Parliament annually, commencing in August 2007, on the measures taken and the progress made—

in a number of areas. I will not read the amendment in full, but in part it reads as follows:

... increase market penetration of ethanol and biodiesel, LPG and CNG ...

and we all know the role they will play in the future. The amendment also states:

(b) secure new investment in biofuel, LPG and CNG production and supply infrastructure in Australia; and

(c) secure investment in new alternative transport fuel industries in Australia, including gas and coal to liquids.

So it is not a carping second reading amendment; it is an amendment that brings a positive sense to this debate, because everyone realises just how important this debate is to the future of Australia and, of course, to Australians. The second part of the second reading amendment calls on the government to:

... review, in 2009, the proposal to introduce excise on ethanol and biodiesel, LPG and CNG in 2011—

So it calls for a review and to—

... consider whether or not there is a case for delaying the introduction of excise, depending on the progress made ...

The second reading amendment then lists a number of important areas, which include:

(a) in increasing market penetration of biofuels, LPG and CNG;

(b) in securing new investment in biofuel, LPG and CNG production and supply infrastructure in Australia; and

(c) towards achieving the 350 million litre biofuels target in 2010.

So, again, that is not an unreasonable expectation to put down and it can be met reasonably by government.

However, the third part of the amendment does have a bit of a sting in its tail. It rightly criticises the government for its tardiness in moving on petrol retail reform—and I think that would be supported by the vast majority of Australians. The government has been very tardy. The government has not responded in a positive way and its tardiness has been shown by the response that has been received right across Australia on this issue.

That particular paragraph in the second reading amendment then criticises the government for:

... bypassing due parliamentary process in introducing a regulation to “undeclare” companies under the Sites Act ...

There is no reason why it could not have been done in other ways, but again that seems to me to be valid commentary on the way that this government from time to time chooses to do its business. It would have been much better to do it in other ways. The next point in criticism of the government is for:

... failing to introduce amendments to the TPA to implement the 2003 Dawson and 2004 Senate recommendations for reform ...

Again, this is very much warranted, because the government has to remember that the broad community out there are very price sensitive to what happens with petrol.

As I said in my earlier statement, the buying public can be faced with not just a daily change but an hourly change—and not just an hourly swing of 1c or 2c. I have driven by the same station not far from my office in Brisbane and I have seen swings in the order of 10c to 15c on some occasions. People wonder why the public at large get upset, but it is very easy to understand. If there were some commensurate changes to the Trade Practices Act, the public may start to get some confidence that there is a Trade Practices Act which has teeth. This is not going to the issue of price fixing—no-one is asking that—because that is going to the issue of justifying the behaviour of these oil companies in certain circumstances.

One cannot fail to remember the occasion when the petrol price spiked because it was a public holiday in the eastern states but in Western Australia, where there was no public holiday on the Monday, for some reason absolutely beyond anyone’s imagination the price did not spike at all. One can understand why there is no lack of cynicism out there amongst the public. Some reference to clear guidelines under the Trade Practices Act would be helpful indeed.

The third part of Senator O’Brien’s amendment criticises the government for ‘failing to act to reduce Australia’s dependence on foreign oil and improve its transport fuel security’. Again, our dependence on foreign fuel is well and truly on the public record, as has been canvassed by a number of my colleagues here. That is the sting in the tail of the second reading amendment, if one wants to call it such, but it is delivered in a positive vein. This government needs to wake up to the fact that there is a need to look at this issue critically. The repeal of this act of itself is insufficient. There is a need to make changes, as suggested by my colleagues, to section 46 of the Trade Practices Act. This would build some confidence out there in the public that in Australia we are not going to see yoyo oil prices reflected in petrol prices on an ongoing basis.

On a recent visit to the United States I was told by a number of politicians that the pressure point in the United States was going to $US3 a gallon. If $US3 a gallon is the pressure point for motorists in the United States becoming extremely irate, we have well and truly broken through that barrier given that that equates roughly to about 75c a litre. It depends where you buy here in Australia—I saw $1.14 on the weekend in my state but it has been as high as $1.35 and $1.40, and that is per litre. As Senator Hutchins was mentioning, undoubtedly the price of $2 per litre will become a psychological barrier for people if there are not some checks and balances placed on the powers of the oil moguls.

There are some other parts of the second reading amendment moved by Senator O’Brien that, again, are positive statements. Point (4):

Calls on the Government to immediately conduct a feasibility study into a gas to liquids fuels plant in Australia, including—

and he again lists positive things—

(a) consideration of Petroleum Resources Rent tax incentives for developers of gas fields which provide resources for gas to liquid fuels projects—

and so on. Again, the positive element comes out in the second reading amendment of my colleague. In conclusion, I believe that the bill—as my colleagues have said—is rightly being supported. However, there needs to be a counterbalancing protection for the consumers in our community because many of them can least afford the charges that are coming about at the petrol pump in this day and age.

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

Can I conclude this second reading debate by thanking all those involved. While much of what was said did not have a lot to do with the Petroleum Retail Legislation Repeal Bill 2006, we have noted with interest the remarks made on all sides. I believe there is majority support for the intent of the government in relation to this legislation. I note that we have been talking about this package of reform going back to when I was industry minister more than five years ago, so I am pleased to see we are at a point now where we can hopefully proceed to bring about this much-needed reform of petrol retailing in this country. This is very important legislation—timely and long overdue—of great benefit both to the industry itself and to consumers of petroleum products. I thank everybody involved and look forward to the timely passage of this legislation.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

The question is that the amendment moved by Senator Milne on behalf of the Australian Greens to the second reading amendment moved by Senator O’Brien on behalf of the opposition be agreed to.

Question negatived.

The Acting Deputy President:

The question now is that the second reading amendment moved by Senator O’Brien on behalf of the opposition be agreed to.

Question negatived.

Original question agreed to.

Bill read a second time.