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

The committee is considering the Petroleum Retail Legislation Repeal Bill 2006 and Family First amendment Nos (1) and (2) on sheet 4928 revised, moved by Senator Fielding. The question is that the amendments be agreed to.

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

We had just about got through this last night. These amendments are about making sure that we are helping independents—a lot of them are basically small businesses—to collectively bargain, streamlining the process, lightening their load and making it easier for them. The reason this is so important is that if this Petroleum Retail Legislation Repeal Bill 2006 goes ahead, it will see the independents being squeezed out of the market even more because of very few restrictions placed on the regulation of service stations across Australia.

I appeal to senators to think about this particular amendment, which is all about collective bargaining, making it easier, streamlining it. The Senate had voted on something similar in a previous Trade Practices Act amendment, and it thought that streamlining collective bargaining for small businesses made sense. This is all about pursuing that at a time when we are discussing legislation for petrol stations and retailing of petrol, which is a very important issue for Australian families.

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

These two amendments moved, by leave, together—items (1) and (2) on 4928 revised—indeed have merit. They are principles which were recommended and implanted in the Dawson bill. The problem is that they replicate, for a specific industry, principles which are established at law generally. The difficulty I have is that the Senate has in fact already passed these amendments to the Trade Practices Act; it passed them with the Dawson bill. What happened was that schedule 1 was excised as a result of a combination of non-government senators and a brave and lonely coalition senator, and the Dawson bill then passed through the Senate. Those collective bargaining initiatives in the Dawson bill now await their passage through the House of Representatives. All the House of Representatives has to do is accept the Senate amendment excising schedule 1—if the Treasurer is so attached to that schedule 1, he can reintroduce it in a different bill—and pass that Dawson bill. These collective bargaining arrangements, which would apply for the whole country, would then be in place.

The difficulty we have with these amendments to the Petroleum Retail Legislation Repeal Bill 2006 is that these would only institute that principle for the petroleum industry. It would be odd if the government, through the House of Representatives, were to finally accept the amended Dawson bill, which is what it should be doing, only to then have another set of amendments pass dealing with the same issue. That is my concern. Of course these can only pass if there is a majority. It would be useful to see what the views of other participants in the debate are. For instance, if Senator Joyce were to support these amendments, it would make a difference. If the government were to support them, it would make a difference. If Labor were to support them, it would make a difference. I would like to hear the views of participants in the debate because, as I said, the intent has merit, but we have a conflict in law if both these amendments and the Dawson bill amendments were to pass.

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

I understand completely the intent of Senator Fielding’s amendments and, like Senator Murray, my concern is that we have already passed the piece of legislation that deals with these amendments. For whatever reason, they have gone down to the lower house and been sat on, but we will have a problem because we will have two pieces of legislation contradicting each another in the passage of the Senate’s Trade Practices Amendment Bill (No. 1). However, that does not detract for one moment from the intent of what Senator Fielding is endeavouring to do, and I agree absolutely with his sentiment.

On looking at it further, my concern is that it means one or the other would stand and, in support of this, would draw into question which one we wanted it to be. My obvious choice is that the Trade Practices Amendment Bill (No. 1), as amended, should be the one that gets passage, because it deals with everybody—all facets of small business and not one in particular. The right of protection that small businesses should have and the right to grow should be manifest throughout all sections of the economy and not designated to one section of the economy in particular. I agree with the intent of this and that it should be there. I agree that it should be in place, but this gives us an overlap and would cause a legislative issue that people could knock edges off in a debate.

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

The opposition essentially agrees with the views put by Senator Murray and Senator Joyce in relation to these amendments. We think it is incumbent upon the government to give passage to the Dawson bill. We do not want to provide the government with an excuse to further delay the passage of that legislation; they have the opportunity to give effect to these measures. If they are serious about these issues for all business sectors, as Senator Joyce puts it, not least the petroleum retail sector, they would expeditiously give passage to that legislation. Indeed, if they wanted to deal with this issue specifically for this industry only, they could support Senator Fielding’s amendments. As I understand it, they have indicated that they are not going to, and that is a test of their bona fides, I suspect, in relation to how serious they are about these measures. We will not be supporting these amendments. We continue to support the Dawson bill measures which have been passed in this chamber. We encourage the government to pass them in the House of Representatives, and we will continue to press that.

Richard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | Link to this | Hansard source

I think that, generally, there is consensus on the perspective of the intent of Senator Fielding’s amendments. The government has a position with relation to the Dawson legislation which came through this place earlier in the year, and we have a view as to what we would like to see passed. Obviously, that will be dealt with at the same time. Certainly, the issue that Senator Fielding raises is not one that we are dismissive of. It is something that is contained within the Dawson legislation, and we would like to see that passed. Perhaps that is something that could be discussed with Senator Fielding down the track. Given the reasons that have been quite well articulated by others in the chamber on this matter, the government will not be supporting the amendments.

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

In case a number of people are listening who may be a bit confused, the Senate has agreed that the idea of being able to allow small businesses to collectively bargain on a much easier basis makes sense to everybody except, it seems, the government. It is relevant to this particular issue because people have raised it. We as a Senate have already sent the signal that we want collective bargaining, but the government are refusing to pass collective bargaining provisions that make it easier for small business. If a political party were pro small business they would do all they could to make sure that what we have all agreed here makes sense; they would not be tying it unnecessarily to something called the ‘Dawson changes’. Let us be specific here so that everybody can understand what was said here previously on this issue: the government is tying in collective bargaining with allowing big businesses to merge together. The Senate said, ‘We’ve got some questions about making it easier for big business to merge even more,’ so the Senate rejected that part and then voted for allowing collective bargaining to go ahead.

The government looked at that in the lower house and decided not to proceed with allowing collective bargaining for small businesses on the basis that they cannot get easier provisions for mergers for big business. The two are totally non-related, and I think that, if the Senate does not agree today to reinforce the message that we need to have collective bargaining streamlined for small businesses—that is what this provision does; it makes it easier for independents and small businesses to collective bargain—we are sending the wrong signals, especially when we are talking about petroleum retailing service stations. If this repealed bill goes through, it will make it even harder for independents, and we need to level the playing field with collective bargaining. Again, I appeal to senators to support this in principle and make a statement again that we are for collective bargaining.

Question negatived.

by leave—I move amendments (3) and (5):

(3)    Schedule 2, page 4 (after line 13), at the end of the Schedule, add:

4  At the end of section 51AE

Add:

Oilcode

These amendments that Family First are putting forward are to ensure that no one company owns or operates more than 25 per cent of service stations. The reason for this provision is that we know that petrol for cars is an essential item for Australian families. There is not a lot of choice. That is another issue we can talk about another day; we will get to that one somewhere else. There is not a lot of choice and so we need to do what we can to make sure that we have real competition and more competition in petrol retailing and not potentially less. What we are looking at with the Petroleum Retail Legislation Repeal Bill 2006 is that any restrictions that were placed on petroleum giants, going back many years ago, to prevent them from controlling any more than a certain number of sites across Australia were put in place for a very good reason, with both the government and opposition at the time agreeing that they made sense.

In 2006 we are realising that those provisions are not working the way they should, they are not serving the intended purpose and so it makes sense to change them. But to just throw them out and have no real regulation on how many sites certain players can have does not make sense. It made sense in principle many years ago, and so Family First is proposing to put some regulations in place that allow not only the big end, oil giants and large companies, to survive but also the independents by restricting any one company to owning or operating only 25 per cent of the market. This allows competition. It means that we do not end up like we have with the food and grocery sector, where we have two players controlling and dominating the food and grocery market across Australia. No-one believes that is a great idea, and there should have been some restrictions put in place to ensure that we did not have that situation. We have an ideal opportunity today to put some restrictions in place to allow competition.

I note that Senator Joyce has got an amendment that has merit that is looking at allowing 25 per cent of the market to be apportioned off for independents. I think our amendment works very well with Senator Joyce’s amendment in making sure that no one player can control more than 25 per cent of the market and also in allowing 25 per cent of the market to be earmarked for independents. I think our amendments are worthy of support, especially considering that Senator Joyce also has an amendment that is trying to achieve the same thing. I think that using both his and ours would serve Australia very well.

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

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

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

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

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

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

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

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

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

The concept of a 25 per cent market measure has quite a good pedigree. The Fair Trading Act 1973 in the United Kingdom was altered to ensure that there was a warning mechanism measure inserted in regulatory practice whereby companies or organisations which reached a 25 per cent market share were put on notice that they were subject to competition law or a competition regulator watch and had enhanced reporting requirements put against them. Of course, 25 per cent is an arbitrary figure, but it was a recognition that 25 per cent delivers very substantial market power.

One of the great criticisms I have had of this government in the 10 years I have been pursuing these matters in depth is that they have failed in trade practices matters to take note of advanced, flexible and workable mechanisms which operate in similar overseas jurisdictions, which are effective in assisting the restraint of any abuse of market power and in ensuring that corporate operators in the market, particularly in intensely concentrated or oligopolised markets, are appropriately restrained and regulated. There is a lack of similar mechanisms here. I continually describe our Trade Practices Act as weak. It is intentionally weak, because the government will not take action in these matters. The Labor Party, to their credit, have recognised the way in which competition law needs to move and consistently over the last few years have joined the Democrats and others in the Senate chamber arguing for a strengthened Trade Practices Act.

I note in debate that the coalition often get annoyed with being told that they are overly subservient to big business views in the matter of trade practices law, but I am afraid that is the distinct impression that legislators, policymakers, small business observers and many media and expert observers have. One of these days, hopefully, the coalition will act to correct that perception. So once again—because I have done it over many years—I draw the attention of the government to the United Kingdom processes and procedures established under the Fair Trading Act, particularly what is appropriately regarded as a warning mechanism for a trigger percentage which alerts one to market concentration.

Having said that, of course, I can see that the danger of the design of Senator Fielding’s amendment was picked up by Senator Joyce in debate. It could, in practice—as opposed to the intent of the designer because the intent is a good one—lead to oligopolisation: namely, the creation of a number of major players, each approximating 25 per cent. It is certainly not the intent of Senator Fielding to end up with four companies running the entire petroleum market, each with a 25 per cent market share of retailing. I have not got the impression that is his intent, but it is why Senator Fielding has reacted well to Senator Joyce’s flip side, which is to reserve a portion of the market for non-major players. He commented on that in his earlier remarks. But I see a fatal flaw at the heart of this: the way in which the amendment is designed could lead to more concentration rather than less—an unintended consequence, I think.

There is a difficulty with industry specific regulation. I am not entirely averse to industry specific regulation—in other debates on other bills at other times I have supported it—but I am of a view that we should move more and more towards general law provisions rather than specific industry provisions. I have noted that the Commonwealth have followed that practice—with respect, for instance, to the criminal code, extracting elements and clauses out of individual pieces of legislation and putting them in the general legislation which covers criminal law to do with issues of fraud or where there is a penalty or other issues. I think we would need far less industry specific regulation in areas like Telstra, the media—or, as we dealing with here, petrol—if our general law were strengthened.

That is one of the reasons I have persistently, consistently and in detail, argued in this place for the assumption of divestiture laws being the flip side of merger and acquisition laws. They work exceptionally well in the most dynamic capital market in the world, which is the United States. The fact that the coalition government, and the coalition at large, will not accept the value of anti-trust or divestiture laws overall, is to their discredit because it is part of the law in the dynamic USA capital market. And once you introduce the flip side to merger and acquisition—which is the ability of the regulator to insist on divestiture in the appropriate circumstances—you can afford to back off from industry specific law because the regulator has a mechanism available.

It is no good saying to me that section 81 covers divestiture, because it only covers divestiture in very limited circumstances. I note, again to the credit of the chair of the committee, and to the credit of the Labor Party, that support for divestiture laws was included in the majority views spelt out in the Senate Economic References Committee, in its report The effectiveness of the Trade Practices Act 1974 in protecting small business.

Let me tell you, if there is one constituency that does not want effective divestiture laws it is big business. As I said, it is to the discredit of the coalition government, which has been quite brave and gutsy in other areas of corporate law reform, that it will not take on this major policy issue. If divestiture did exist, you would be able to parallel with it the UK early warning system of, when you reach a sizeable market share, being put on watch. Then senators would not need to take the initiative—as Senator Fielding has—to try to introduce a minimum mechanism in a particular industry to serve a particular need at a particular time, because the general law would be sufficient.

That is not Senator Fielding’s fault; it is the fault of a failure of broad political principle and policy by the coalition. If the government loses government next time, or the time after, I look forward, shadow minister, to the Labor Party taking up these issues and bringing forward the sound recommendations that are supported in the Senate Economics References Committee report.

The shadow minister raised the issue of review, which is covered in these amendments. I agree with the shadow minister and Senator Fielding that the Oilcode needs to be reviewed, and probably on a regular basis. It is a moving market and it is an extremely dynamic market. It is a complex and very sensitive market from the perception of consumers and businesses, and if the Oilcode is to be the principal and mandatory regulatory mechanism to keep the oil industry honest—I will not use the pejorative word—then the Oilcode needs to be kept constantly under review, and independently so.

The shadow minister made the remark that the role of monitoring and reviewing the oil code is currently contained in section 3 of the draft Oilcode, and that the review and monitoring role will be shared by the ACCC and the Department of Industry, Tourism and Resources. I consider the ACCC, in law, to be an independent statutory authority. I do not accept the minister’s version of it being part of the executive, although I accept that it is part of the broad government area of responsibility.

I tend to see the executive as the coalition government cabinet or, if Labor are in, the Labor cabinet. They are the executive to me. The bureaucracy and agencies are separate. And, of course, independent statutory authorities are, and should be, at arm’s length. Anyway, those two bodies—the ACCC and the Department of Industry, Tourism and Resources—should be sufficient under the Oilcode, as I understand it, to achieve the appropriate review of the way in which the code may work. Therefore Senator Fielding’s amendments could cross with that.

I am concerned that a non-expert body may be given the role of reviewing regulatory competition matters and I am of the view that these matters need to be given to the ACCC as the experienced and concurrent reviewer and regulator. So overall I am concerned that Senator Fielding’s amendments—once again, with the right intent, and reflecting a genuine concern that he has and that is present in the community—will deliver an effect or an outcome which is contrary to his intention. So I must join with my shadow minister colleague from the Labor Party in informing the Senate that the Democrats will not support these amendments.

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

Although, once more, I agree with the intent of what Senator Fielding is trying to achieve, and I understand completely how difficult it is to work with the resources he has, I have some concerns about a couple of issues. I have had a discussion with Senator Fielding and I agreed that, if his amendment went to volume, I would strongly consider it. But the amendment goes to sites. The problem we have with sites is that you could hold 25 per cent of the sites and 75 per cent of the volume. That could pose a serious problem. The number of sites is not a determinant of the amount of the market that you hold. You can have Big Bill’s discount sideline petrol station that sells 100,000 litres a year next to a major site on a highway that may sell a couple of million litres, 10 million litres or even 100 million litres. The number of sites is not the crucial issue here; it is the volume in the market.

I thank Senator Fielding for his support for a following amendment which goes to volume. We really need to change this and make it a volumetric statement which is part of the same amendment, because there is the possibility of getting only one through. If Senator Fielding’s amendment went through as it stands and mine failed—and I know that is not going to happen, but let us presume it does; we can always hope for miracles—we would have a position where four petrol retailers could control 100 per cent of the sites. We know there are six retailers—the four majors and Coles and Woolworths. So it is quite possible that we could have complete saturation of the marketplace without any independents.

The aim—and this is where I agree with Senator Fielding’s intent—is to find a section of the market in which the independents can live. It was the intent of the 1980 act to do that and the intent remains. People do not change that much. The principle of fairness does not change over time. Modern Australian freedom should include the principle of freedom to go into business. That principle does not change over time, or I hope it has not changed. If we all end up working for business, we may as well work for government. The conservative side of politics believes that it is an absolutely fundamental principle that you have the freedom to go into business and be master of your own ship. That is what I am trying to address when I seek a section for those operators to exist in, because we do not all want to work for somebody else. Some of us like to work for ourselves. It is a basic principle to be able to do so.

I agree with the intent of what Senator Fielding is trying to achieve. My concern is that we are talking about sites, not volume. When we talk about sites we make no statement whatsoever about the volume that can exist in the market. In addition, the amendment starts to cross paths with the ACCC and the role of the ACCC. I believe in having a stronger ACCC. I believe—and I place this on the record—that Professor Fels had a much stronger and more partisan view of being an arbiter in the ACCC than possibly that body’s current incumbents. But that is an issue for another day.

When I look at this amendment I see two issues. Firstly, four retailers can control 100 per cent of the sites. This would leave no room for independents to exist. Secondly, the amendment talks about sites, so you could have one retailer having 25 per cent of the sites but possibly 75 per cent of the volume. Obviously, you would ensure that you set off on a path of taking over the major sites that sold most of the petrol, which could have an arbitrary effect. The reason the 25 per cent figure is in the amendment is that it is roughly the figure used now in relation to independents, non-branded and branded, and franchisees. It is a section of the market that we know will not create a great disturbance. It is really drawing a line and saying, ‘This is where we are at,’ so it will not create great turmoil in the market. It is just going to protect the position of the existing independents. The 25 per cent figure applies monthly. Some time period has to be given to do a review, otherwise it has no effect.

I agree with the intent of Senator Fielding’s amendment. If a few things were done to it it could be something that I could support, but in its current form I cannot do so. It is the detail I cannot support, not the intent.

Richard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | Link to this | Hansard source

The 25 per cent concept is something that we have obviously heard about from a lot of quarters, but the government does not support it. As Senator O’Brien notes, the government sees this amendment providing all sorts of problems in relation to its practical application, and I think that has been indicated in the comments of others this afternoon. The concern is that it would in fact lead to increased price pressures—I am certainly aware of Senator Fielding’s concerns about the price of fuel and his entreaties in relation to that and certain elements of the price of fuel—so the government has concerns in relation to that and also in relation to potential investment in the sector. I think this could have a negative impact. More importantly, I think some of the pressures that could be imposed, certainly from some of the issues that Senator O’Brien raised, could see a negative impact on availability in regional areas.

In respect of the comments that have been made regarding the review, I note that the government has reaffirmed its commitment to a review of the Oilcode 12 months after its implementation. Senator O’Brien mentioned five years, but the government have also indicated that we would review within that time frame as appropriate, not necessarily in the standard time frame of five years.

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

I have some concluding remarks on these amendments. We are moving to a situation where we have two players that are going to dominate petrol retailing in Australia. I do not know anyone who thinks that is a great idea. In removing regulations that made sense in their day but do not make sense today, we should be replacing them with regulations that do all we can to make sure we have more competition, not less. I understand that the intention of these amendments is right and honourable—and maybe some of the content is not—but how do you get a government to sit down and genuinely look at the interests of Australia and have a fair dinkum debate and tussle about whether 25 per cent is right or whether 20 per cent is right or whether it should be based on volume or on sites? But to stand by and do nothing and allow the independents to be squeezed out of the market—and that is what we are talking about here—rather than trying to allow real competition to happen, is ludicrous. We are in danger of going down the path we went down with groceries in Australia—having two players dominating the whole grocery market and also dominating petrol retailing when we have an opportunity to stop it. It is absolutely crazy.

Question negatived.

I move Family First amendment (4) on sheet 4928 revised:

(4)    Schedule 2, page 4 (after line 13), at the end of the Schedule, add:

5  After subsection 95Z(1)

Insert:

Offence: failure to negotiate on price, terms of conditions of supply

Ross Lightfoot (WA, Liberal Party) Share this | Link to this | Hansard source

Senator Murray, on a point of order?

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

In fact, it is on a matter of guidance, Mr Temporary Chairman. I note that amendment includes references to 51(1)(f), which refers to an earlier amendment—item 2—which was knocked off by the Senate in committee, so I would assume that this amendment therefore cannot be put in this form.

The Temporary Chairman:

As I understand it, Senator Murray, your Democrat amendment—

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

No, it is not a Democrat amendment. I refer you to sheet 4928 revised. If you have a look at item 2 of Senator Fielding’s amendments which have been dealt with and voted against, you will find that it refers to ‘at the end of subsection 51(1)’ at (f), (g), (h) and (i). Subsection 51(1)(f) does not exist, as I understand it, in the bill; it exists in Senator Fielding’s amendment, item 2. If that item 2 has been rejected by the Senate in committee, surely you cannot move an amendment which includes a reference to an amendment which has been rejected.

The Temporary Chairman:

Senator Murray, as far as I am able to ascertain, on my advice there is no conflict and therefore Senator Fielding should continue, having moved amendment (4).

Richard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | Link to this | Hansard source

On a point of order, Mr Temporary Chairman: if you look at item 2, it says:

(2)    Schedule 2, page 4 (after line 13), at the end of the Schedule, add:

Trade Practices Act 1974

That is on sheet 4928 revised. Item 3 has:

So that is the subparagraph (f) to be added on. It is on sheet 4928 revised. As Senator Murray has indicated, amendment (4) moved by Senator Fielding does actually refer to that clause. Seeing that clause does not exist, it would be very hard to pass an amendment that refers to it.

The Temporary Chairman:

Senator Fielding, it would appear that you may have to amend your amendment or that the amendment is not valid.

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

On a point of clarification, what has been pointed out is actually technically correct and it would not stand on its own. The point was about prohibiting refusing to supply independent retailers. Because the previous amendments have not got up, this would not be able to stand in its current form. You are right, Mr Temporary Chairman.

The Temporary Chairman:

So do you wish to withdraw or amend?

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

If I had time, I would like to amend. As I do not have the time and as the previous amendments have not gone through, then I will need to withdraw it.

The Temporary Chairman:

Are you seeking leave to withdraw then?

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

Yes, Mr Temporary Chairman; I seek leave to do that.

Leave granted.

The Temporary Chairman:

Thank you, Senator Murray, for your guidance and thank you, Senator Colbeck. The Senate in committee will consider Senator Joyce’s amendment on sheet 5045.

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

I move amendment (1) on sheet 5045:

(1)    Schedule 2, page 4 (after line 13), at the end of the Schedule, add:

Trade Practices Act 1974

Oilcode

One thing that we have seen in the chamber today is that everybody seems to have a great desire to protect small business. They believe in it. Now it is a matter of putting that desire into effect. We have gone through a number of amendments that have been trying to control from the top down—that is, putting controls on sites and suchlike. But this amendment says that we should look at what is actually there at the moment as being part of the independents, the family businesses—the businesses that we intend to support. Our rhetoric is that we believe in and support the right to be in business. According to the Motor Trades Association, who I have been in consultation with, those types of businesses represent about 25 per cent of the volume at the moment. What this amendment is doing is quarantining the section of the market that is currently being used for that section that we want to protect.

BP, Caltex and Shell put their hands on their hearts and say: ‘We have got no intention to ever remove those families from those businesses. We have got no intention to go into their area.’ If that is the case then this will not worry them, because it is no more than stating their status quo. The other 75 per cent can do what they like. They can have all the rearrangements they like. This amendment says to the Australian people that we believe there is a section of this market which must be left behind—if we say that we are a government that believes in small business. It does not cross paths with the ACCC; it purely and simply talks to a section of the market that we want to quarantine.

People have asked, ‘Why a month?’ They have said, ‘It is going to be outrageous—every month!’ Not really. You have to find some sort of time frame in which to deal with these issues. You could say a year. But you do not have to worry about anything monumental at the moment, because currently we are abiding by that. There are no problems whereby they have to go to the market now and change it. It does not make any prescriptive comment about who is what, who is going to have a competitive advantage, which of the oil majors is going to leave and which is going to follow. It does not talk about them at all. They have 75 per cent of the volume of the market to deal with.

I am going to read my tea leaves here: I do not think the Labor Party are going to support this. I think they are going to come up with another reason not to support it. I think they are right on board with the bill. But it is going to be fascinating to hear what they have to say—’Why this time?’—about why they are not going to when they have got a chance of actually doing something. I wonder if they have been got at. I wonder if someone has had a little knock on their door. Today the Labor Party have actually got a chance to achieve something. They have always talked about the outrageous power in the Senate, saying that it is this and it is that and it is something else. For once in their life they have got the chance to do something about it and they are going to fold. We can see that coming today. Today is their chance, today is their Waterloo. It just goes to show that the knock on the door has happened: ‘Hey fellas, you are going to fall into line.’ We know that all the other times it is just Labor Party theatrics before a Labor Party fold.

It is going to be fascinating for the people in the gallery today to see what Labor are really like. Never again listen to Labor’s rhetoric about the extremism in the Senate, about the Senate being out of control, because they are part of the problem. They will fall into line today. It is going to be marvellous to watch. The big boys have knocked on your door and you are going to do what they tell you to do, because that is your job. Around about question time, you will go back to your old rhetoric, expecting people to believe you, and they will not. After this, they will fail to believe you on virtually anything. What you will show is that you are an absolutist power in the Senate, that you believe in the rights of big business to reign supreme, that you do not believe in small business and that, when you get the chance to make your mark, you fold.

It will be interesting today to see who are the so-called backdown people. Who will be the doormats today? I hope that we get the voices on this one, because I want to see them drawn out. I want to see what it looks like to see some doormats cross over to protect their mates in the big oil companies. That is what you will be doing, because they have got your number.

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

I rise to support the amendment proposed by Senator Joyce. I was not in support of Senator Fielding’s amendments, for all of the reasons that were cited, but I am certainly in sympathy with the principle that we have to keep the small business operators, the franchisees, in business. It is absolutely fundamental, especially coming from rural and regional Australia, as I do. All of Tasmania could be classified as rural and regional.

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

Hobart is very sophisticated.

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

I agree that Hobart is very sophisticated, but some people still regard it as regional. Having said that, and as I said in my second reading speech, I think it is absolutely essential that we support small business in Australia. The tragedy is that small business operators continue to support the coalition in spite of the fact that, day after day and week after week, the coalition tramples small business. We have seen an example of that in the last week or so with the reneging on the promise of a mandatory code. Fruit and vegetable growers in particular are outraged. They were promised things about labelling that went nowhere and then they were promised mandatory criteria. People as high as the Deputy Prime Minister, eight days before the last federal election, absolutely promised growers in Australia that they would get this mandatory code that would govern their relationship with the wholesalers and retailers—that they would get a decent go. Instead of that, after two years nothing has been done.

The coalition absolutely reneged and now it has been flick passed to Minister Macfarlane, who is saying that it is a voluntary code. It totally flies in the face of what the Deputy Prime Minister, John Anderson, said. Rural and regional Australia have a right to ask whether they can take the word of the Deputy Prime Minister on its merits. The former Deputy Prime Minister has been hung out to dry in front of the whole of rural and regional Australia. As the current Leader of The Nationals in the Senate was saying, the National Party has been dudded in front of the whole of rural and regional Australia. The fruit and vegetable growers across this country have been let down by the coalition in terms of the promise of a mandatory code, and now we have rural and regional Australia being let down again in relation to supporting small business.

We have never rejected the notion that we should be able to quarantine certain volumes to certain sections of the market, and I think that this is certainly one way in which we can support the small business operators in Australia and support rural and regional Australia. That is why I am supporting this amendment. I think it is significant. You only have to read the submissions from small business operators to see their awareness of what is going to happen to them as a result of this legislation. We have already seen the market dominance of the four major oil companies in Australia. We have seen what happened with the introduction of the supermarket schemes and we can see the writing on the wall. I think this is, as Senate Joyce has just said, a red-letter day for small business in Australia. In fact, it has been a red-letter week for small business because of the backdown that I referred to a moment ago. For all the words that have been spoken on this bill, it is essential that people actually stand up at this point and vote to support those small business operators throughout Australia, because they are not going to be there forever.

The people who are going to suffer the most are the people who have the least amount of power when it comes to lobbying the government. For all the government’s promises about standing up for the battler, standing up for the little guy, it is about big business, writ large. It has been big business writ large for the coal industry in holding up any movement on climate change. It is big business in terms of the government ignoring moves to ban the television advertising of junk food in children’s television hours. They are out there totally supporting big business in blocking the moves to do that. Now we have yet another example of it.

I am pleased that Senator Joyce has brought forward this amendment. I urge the Senate to support it as a very strong signal to small business and to rural and regional Australia that we believe these services are essential, that we support families in small businesses in rural communities and that we support allowing those communities to continue to be sustainable. There will come a day when the four big oil companies will withdraw from the so-called uneconomic sites. What is going to happen to those communities when that withdrawal occurs? When it occurs, the people to blame will be those who are sitting right here in this chamber. It should be taken up to them at the next election.

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

It is very important, for a range of reasons, that we keep independents in the market. Obviously, regional areas are absolutely crucial in that. You can go to any small town and find independents there. That is one of the issues I had with the legislation that talked about sites. They are usually smaller volumetric sites—small sites in what they produce—but they are vitally important to the lifeblood of the town. One of the great fears that we have with this legislation is that we may end up with oil companies deciding not to supply them because it is uneconomic. What we are going to have is complete social dislocation.

Just imagine a small town like Surat, in Queensland, which is 75 kilometres from Roma to the north and 120 kilometres from St George in the south. You can forget about the closest towns to the east or the west; they are about 200 kilometres in each direction. There is one fuel station. What are you saying about the lifestyle of the people in that town when you close the fuel station down and their cars have to have the fuel capacity, and enough fuel, to go 75 kilometres to Roma and 75 kilometres back? They have to take a 150-kilometre round trip to possibly cover the five kilometres around town to do the shopping and such things. It is a vital part of life. I suppose you could tell them to walk. You could say, ‘People in these towns do not deserve the right to own a vehicle.’

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

You could go back to the horse and buggy!

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

That is right. So you only deserve the right to own a vehicle if you can afford to fill it with enough petrol to take you 150 kilometres out of your way to fuel up the car! That is one of the things that is wrong in this legislation that we have to deal with. We have to put in some protection mechanism for these people.

It is the height of absurdity to expect that BP will develop the conscience that we are supposed to be developing in this chamber. We are going to leave it to some corporate entity to develop that conscience: ‘Oh, you know, Caltex will look after you. BP will look after you. Shell will look after you. Coles and Woolworths will look after the people of Surat.’ I do not think so. I do not think that is going to happen, unless we have a section of the market that they have to supply—independents—and that is because we know that they have volume at the refinery that they have to move. They have to find the sites and, if some of those sites are independents, they have to go out and supply those sites—it is our best intention of trying to look after those people. People might say, ‘It’s naive. It’s got this wrong; it’s got that wrong,’ but where is your solution? Where is the solution in the current piece of legislation that looks after those people? Where is it? Take me to it and you will have won me. But you have not got it there.

It is a statement about fairness and what is primarily unfair. I do not think anybody in this nation should be just dropped off. We are talking about people—generally, pensioners—who do not have a lot of money, who probably have a vehicle that is not one of the latest models and is not very economical with fuel. It may be a bit old-fashioned, but I think we should look after them. I think we should give them something that says, ‘I believe you have a right to fuel up your car in your town.’ I am going way out on a limb on that one, but we will give it a shot and see how it goes; we will put up the flag and see who salutes on this one.

That will be interesting. We will come up with a few platitudes, and the Labor Party will have a good reason why they cannot. There will be some reason: it will be a bit too complicated, there will be something technically not right, the wind is not blowing in the right direction, the sparrows are not facing south today. There will be something—something fascinating—as to why they do not want to look after pensioners in small towns or other people except the oil majors who knocked on their door. They will be looking after them today; they will not be looking after their own.

This is one of the issues where we really have to give ourselves a bit of a wake-up call about what we are trying to do here. The only people we know who will supply people in those small towns are independents. Why? Because you just do not make a lot of money out there. Where the major oil companies want to be is on strangulated sites on major arterial roads. That is where they want to do business. They do not want to do business on the edges of suburbs, from corner stores and from independents. And, if they do—if they are telling us the truth—they will not be worried about this amendment because it will not affect their game plan. They will be saying, ‘We always intended to keep independents in the game, so we have no problems with the amendment because it’s what we’re doing already.’

But, if they do have a problem with that, it spells out clear as a bell that they are getting out of it—they are getting out of there, they are going to go back and we are going to have some beautiful new petrol stations around strangulated sites on the Gold Coast, putting out of business independents that are already there and putting out of business families that are already making a buck there. We are going to have some big sites up on the M1 and around the edges of Sydney, probably putting people out of business there, and big sites down the Gold Coast putting families out of business there. But, if they are not going to do that, they will have no problems with this amendment—none whatsoever.

There is a whole range of things that go away from the purely dry economics of this resolution. It talks about looking after people. It talks about the protection of that manifest belief that you have the right to go into business in Australia, to be master of your own ship, to determine your own destiny, to think your own thoughts and not be scared of what you have to say. One of the things that attracts me to this place is that you should be able to protect that in all the ways, shapes and forms in which it comes.

I have had some questions about my amendment (2) to add (f) to section 95A. We have to be able to review petroleum products and we have to have the capacity in that act to add in petroleum products as one of the mechanisms of review, because we are talking about a monthly period. If somebody says, ‘I don’t like a monthly period,’ I will meet you halfway. If you have a different period—two weeks, two months or three months —I will go there. We do not need to stumble around it, but you have to have the mechanism with the power of review, and that is where 95A(f) comes in.

It is vitally important that we get a fairer outcome. This amendment is all about fairness. Fairness is a simple word. What is this amendment about? It is about fairness. It is about fairness to people who are in business. It is about fairness to the aspirations of the Australian people and their ability in the future to go into business. It is about fairness to people in regional towns and their ability to source fuel. It is about fairness in giving people the right to jump in their car and be a part of a community. If you do not have a car, you do not have a community.

We cannot be sending people in regional towns back to 1911. It is not fair. We cannot be saying: ‘Mrs Smith, we know you’re 87 and you’ve got an old Commodore in the garage and it’s probably not the most economical car but, from now on, we expect you to ride a bike.’ I do not think that is fair. When you need to see a doctor in another town, you will have to drive to that town first, before you can see the doctor, because the only fuel station will be the big corporate site back in a major town. So you will somehow have to get yourself to the town to buy the fuel to get to the town. I do not think that is a fair outcome, but it is going to be fascinating to hear the arguments as to why it is fair. We will hear today some arguments about why it is fair. It will be interesting. The arguments about why this is fair will be something that we can put on with Monty Python tonight.

It is going to be an absolute expose of the power of major oil companies. People will be looking after themselves because it will be a case of, ‘If you guys get into government, you have got to be on the right side of us.’ The Labor Party will be saying: ‘We’re going to do that today. Don’t you worry, you can count us in. Don’t you worry about that. We’ll look after you today, Mobil, Caltex, BP, Shell, Coles and Woolworths. The Labor Party are going to look after you today, because all that other stuff we talk about is just rhetoric. We just spin that out—it’s a yarn. We’re programmed to say that sort of stuff; we don’t mean it. You don’t honestly think for one second that we believe in that? You don’t think we believe in looking after people in regional towns! You don’t think we believe in fairness! It is just theatrics. We’re with you, Caltex, Woolworths, Shell and Coles. We’re with you all the way.’ Maybe that is fair enough. There are a lot of people in the shop stewards union—maybe it will help union membership. I do not know. But it will be interesting. It is going to be a fascinating expose of the power of the major oil companies.

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

I found that a remarkable contribution. We are on broadcast, so I suppose Senator Joyce has to take his opportunities where they fall. It is a bit rich for Senator Joyce to ascribe motions to the opposition on how it votes on this legislation. I have just one word to say: Telstra.

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

I can tell you about the amendments you have there, if you want to run through them.

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

If Senator Joyce wants to debate how he changed his mind from the commitment he gave before the election to vote against the sale of Telstra to the metamorphosis that brought him to the point of voting for the government’s legislation, I am happy to debate him at the appropriate time. I just say that it is a bit rich to ascribe to the opposition all sorts of motives, without hearing what we had to say on this legislation. I found that a remarkable contribution.

Some interesting questions ought to be asked about this amendment. What does the term ‘prescribed independent fuel retailer’ mean? How will it be interpreted by the courts? Can Senator Joyce assure us that it will be interpreted in the way that he intends? Is there a definition in the legislation which the courts would rely upon? Senator Joyce sets out sites in subclauses 4 and 5 of his amendment. I am not certain, but I take it that they are operated by Australian Petroleum Pty Ltd—Caltex—BP Australia Holdings Ltd, Mobil Oil Australia Ltd, Shell Australia Ltd, Coles Myer Ltd and Woolworths Ltd. If they have been supplied their 75 per cent of the market, say, 20 days into the month and the independents have not taken up all of their 25 per cent, I have interpreted this to mean that there would be a breach of the law if the oil companies kept those sites supplied. If those sites that had been supplied ran out of petrol, they would simply have to shut down while the suppliers waited for the independents to take up the balance of that supply—that is, the 25 per cent. So, for the next 10 days in the cycle, if they did not take it up, those sites would shut down. Is that what Senator Joyce is saying? Or would they be fined, would they have to pay a penalty to be able to continue to operate their businesses? What would happen—and perhaps this is the intent of the proposed amendment—if those independents said, ‘We’re not buying the fuel unless we can get it for 50c a litre less, so your sites will have to shut down unless you sell us the fuel for a massive amount less than the market rate’?

It is all very well for Senator Joyce to come in here with good intentions but, when he does not do his homework and he does not put up a proposition which is supportable, it really is not appropriate for him to cast aspersions on other parties in this chamber which try to get a workable piece of legislation through. I am happy to have a debate. Senator Joyce wants to ascribe motives to everyone. Let me suggest that many people could ascribe the motive that this is just grandstanding. It is something that Senator Joyce knew would never get up, it is something that Senator Joyce knew he could have a rant about while we are on broadcast and it is something about which Senator Joyce could say: ‘I’ve defended the faith; I’ve defended the independent wholesalers.’ Frankly, that is just a hoax.

Here we have a provision which, if implemented, would be totally unworkable. I understand that, in Goulburn, not far from here, there are 12 service stations. There are a variety of service stations. What would happen if three-quarters of those had sold all the petrol that their supplier would give them under this measure because they decided they could do better with margins in other places? Let us say that nine of the 12 service stations had to close while three remained open. This is really sounding like the old soviet state command economy. We are talking about saying to businesses: ‘Lay off your staff, close your doors, lock up the pumps. Those three businesses remain in town. They can keep trading for the rest of that month, until the others start at the beginning of the next month.’

There will have to be some massive policing of this, so we can understand just when the 25 per cent limitation kicks in. When in the month do you stop supplying the stations that are run by these companies? Which parts of the community will run out of fuel because they are only supplied by these companies and not by the independents? Which of these places where you have to drive 75 kilometres each way to get fuel will be on the receiving end? The petrol stations in their town are all closed and they have to drive 100 kilometres up the track to an independent who will sell them fuel at $2 a litre, because that is all that they can get. These are the sorts of unintended consequences—I am certain that Senator Joyce did not intend this—that ill-considered drafting can lead to. Frankly, if Senator Joyce wants to cast aspersions and suggest that people are motivated by improper motives, he had better have a good, hard look at the proposition that he puts before this chamber and asks people to vote for and then castigates them for not voting for it.

We are happy to consider reasonable amendments and, indeed, we support reasonable amendments. Senator Joyce voted for Senator Murray’s amendments yesterday and then had himself paired, so that he did not have to vote for an almost identical amendment last night, and walked out of the chamber. Frankly, I was prepared to let that go through to the keeper. But, after that performance, I do not think it is fair of Senator Joyce to expect us to ignore the way that he behaves on legislation if he is going to ascribe the sorts of motives he ascribed to the Labor Party in relation to this matter.

Our bona fides are clear. We have been proposing improvements to the regulatory regime through amendments to the Trade Practices Act. We have supported—as has Senator Joyce—certain other propositions going through in terms of the competitive model through the Trade Practices Act, and we continue to support that and we are expecting the government to give effect to the legislation that has been passed through this chamber which will have some effect in this regard. We think there are further improvements to be made. But we will not be supporting a proposition which is totally unworkable.

It does not matter that the legislation might be passed through here with the best of intentions. If it is not workable, if it leads to catastrophe in the market and to chaos in the marketplace, if it leads to the closure of businesses and to towns shutting down, and to the sorts of consequences that Senator Joyce referred to—the inability of some markets to be supplied—how can we vote for it? That is the reason we will be opposing this amendment: it is not workable.

It is well-intentioned but, frankly, Senator Joyce needs to put up a better-thought-out proposition—one which has behind it enough detail to give it a chance of success. I suspect the difficulty that Senator Joyce faces is that that is a very difficult thing to do—even for an opposition party, let alone a member of the government who is taking his own path on a particular piece of legislation.

I respect the fact that Senator Joyce is well-intentioned, but I think he ought to think very carefully about how he addresses the intentions of others in this place when it comes to amendments such as this. There is no way that this could be given effect without major rethinks and major bureaucratic intervention at every step of the way and, subsequently, major change after it had been trialled. By all means, Senator Joyce should pursue his intention of making sure that independents have a place in the market. This is not the way to do it.

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

I do not want to prolong the debate, because I hope we get to a division before question time, but I want to make three points. The first point is that I would caution anyone against ascribing motives in this place. I am aware that, within the Labor Party and their caucus, there have intense debates and different opinions about many matters, and my information is that they have had some contested views on this bill. But I do not ascribe to them a weak belief with respect to Trade Practices Act amendments; they are on the record in quite a formidable manner in that regard.

The second point I would make is on the amendment itself. Whilst I recognise that the criticisms of the shadow minister have some validity, the great saving point of the amendment is that it actually leaves the detail of management to the Oilcode; the detail can be developed and the practical measures can be introduced through the Oilcode.

My third and last point is that I see this as a holding proposal until such time as the Labor Party are in power and can introduce divestiture provisions—because, of course, once you have divestiture provisions you have proper market management and you then do not have to hold to particular percentages in the market as a whole. So, recognising the validity of some of the criticisms, overall the Democrats think that both the intent and the design are sufficient for us to support this proposal.

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

It is interesting. We have just heard a good expose by Senator Murray, basically setting out exactly what this is—a holding pattern—so that we do not crucify those who are currently in the market. Why it is 25 per cent, and why it is not going to bring about the so-called moment of doom that has been talked about by the opposition, is that, if that were the case, it would be doing it now, because that is the portion of the market that is currently being described by the Motor Traders Association as ‘independents’. You asked for a description of what an independent is. It is right there in front of you. It is there in the legislation. The independents are all the fuel stations except the four major oil companies and Coles and Woolworths. It cannot be any clearer than that.

If this proposal were about to bring about this complete dislocation then we would already be suffering that complete dislocation because the sites and franchise acts have been in place since 1980; and, while we all agree that they need to be amended and fixed, we are not seeing that doom at the moment. So I do not know why this amendment is going to bring it about. It was a great exercise in spin, and it was great to see that, when their number is called, the Labor Party have the ability to fall into line. I do not think that Government Whip Jeannie Ferris could have done a better job on the Labor Party members than the job they have just done on themselves. It was brilliant. They have fallen into line. They know what they have got to do. They have to support the oil majors. They have got to make sure that those horrid independents and family businesses go broke. They have got to make sure they screw them down, because their number has been called today and they have all answered.

And it is all right. There are no protections in there for independents—none. The Labor Party obviously believe that the market should reign supreme and that there should be no controls—basically, that the biggest shall survive and the small shall die. That is an interesting position. But, anyway, we will continue this debate later on. We are going to make sure that this is carried out.

Progress reported.