I inform the House that the Deputy Prime Minister and Minister for Trade will be absent from question time today for personal reasons. I am happy to say that he and his wife, Wendy, have become grandparents for the first occasion. We congratulate them.
Hear, hear!
The Minister for Foreign Affairs will answer questions on his behalf. I also inform the House that the Minister for Small Business and Tourism will be absent from question time. She is interstate attending a major industry meeting. The Minister for Industry, Tourism and Resources will answer questions on her behalf.
My question without notice is to the Minister for Transport and Regional Services. Minister, why does the government have just four teams of police to protect more than 140 regional airports?
The Australian government has a lot more than four teams of police to protect Australian regional airports. We have security plans at each of the airports. We have appropriate arrangements put in place to help with basic security at minor airports. The larger regional airports have full screening similar to what you would expect at capital city airports. Each airport has a level of security appropriate to the assessed needs in that particular area to ensure the safe passage of Australian passengers. There are full-time police deployments at the busier airports and those that have been classified as a first response to counter-terrorism. Those that are not covered by that full-time policing have the additional advantage, on top of the local policing that might be provided, of four deployment teams that move around the countryside from place to place to assist with training and preparations for any incident which might happen to occur.
My question is addressed to the Treasurer. Would the Treasurer update the House on what the Australian government is doing to help businesses across Australia, including those in my electorate of Dobell, to get on with business? Are there any threats?
I thank the honourable member for Dobell for his question and his interest in the Australian business sector, because it is the health of the Australian business sector which will drive our economy and will drive our employment prospects in the years which lie ahead. Today I announced the final response of the government to the regulation task force which was chaired by Gary Banks of the Productivity Commission. The government has now responded to all 178 recommendations and accepted, in full or in part, 158 of those recommendations. This is a major report on and a major response to reducing regulation and red tape on Australia’s business sector. As part of that response, the government has announced tougher rules for making new regulations, including the requirement that there be cost-benefit analysis and the use of a business cost calculator developed by the Office of Small Business under which we will be able to assess the cost of new regulation on business. Cabinet will make the final decision on any new regulation, but it will only be after that rigorous process has been gone through. In addition, part of our response announced today is for the screening of all regulation at least every five years. So after five years every piece of regulation will be reviewed by the Productivity Commission to see whether or not it is still required and whether or not the cost can be reduced.
Some of the individual areas where we will be simplifying regulation include working towards a single regulator for mine safety; FBT reporting exclusions for pooled motor vehicles; improving advice for occupational health and safety; simplifying accounting methods for small restaurants, cafes and caterers; streamlining business names through the ABN-ABR system; aligning definitions of ‘small business’, ‘employer’ and ‘associate’; and aligning training and licensing and mutual recognition of occupations. This comes in addition to changes which the government announced in April which raised thresholds in relation to fringe benefits exemptions and reportable benefits exclusions. In addition, in April we announced a halving of the cost of incorporating a company and provision for companies to make their annual reports available on the internet rather than having to mail out hard copies.
This is part of a determined effort by the Australian government to reduce unnecessary regulation so as to free up the business sector. It comes in addition to tax cuts for the business sector which the government announced in this year’s budget and our ongoing campaign to have the states acknowledge the intergovernmental agreement and abolish those indirect taxes which were part of the original agreement to bring in the GST. Australia’s economy will be driven by the health of its business sector, and reducing unnecessary red tape is a big part of that.
My question is to the Minister for Transport and Regional Services. Why is it that, five years after the 2001 terrorist attacks in America and one year after Sir John Wheeler warned the government about major holes in Australia’s aviation security, a security gate at Australia’s largest and busiest airport, Sydney airport, was left open and unattended yesterday, allowing what has been described as a procession of cars and utilities to pass through?
As happened yesterday, the Leader of the Opposition has not checked his facts. He is wrong and, unfortunately, that has been typical of his approach to these sorts of issues.
Mr Beazley interjecting
Order! The Leader of the Opposition has asked his question.
The reality is that the gate that was open and featured on the front page of the Daily Telegraphso he did get up early enough to read the front page of the Daily Telegraph today—was not the gate to the security area of the airport; it was the access to a construction site at the Qantas terminal—and a second fence, with an appropriate security gate and appropriate protection and meeting the appropriate standards, was in place to ensure the security of the airport area.
Mr Gilmour, the General Manager of Corporate Affairs of Sydney Airport Corporation, has issued a statement to that effect, which states quite clearly that the article in the Daily Telegraph referred to a gate which was on the landside work site and does not provide access to the secure area of the airport. The gate leads to a Qantas hangar which is currently undergoing refurbishment. There is a further security fence behind the construction site which provides security for the airport. So, in fact, the operations of the airport were appropriate in this instance. There was construction going on, so they provided a new security fence to appropriate standards to ensure that the airport airside area was secure.
My question is to the Minister for Foreign Affairs. Would the minister inform the House of the government’s plan to fight terrorism in our region and is the minister aware of any criticism of this plan?
First, I thank the honourable member for Casey for his interest and for his question. I think all of us are reminded by the events in Britain in the last week of the continuing threat of global terrorism and the importance of international cooperation. That has always been this government’s approach. We know that we need to work with other countries to defeat terrorism. We know that it will be a long and hard battle and that it requires a lot of courage and strength to take it on.
Last Thursday the Leader of the Opposition made a speech to the Lowy Institute, which I sat and read myself, because I am hardworking, I read the newspapers and I read people’s speeches and I like to know what is going on. I read this speech and I noticed the Leader of the Opposition running his usual line that we should admit defeat in Iraq, we should surrender in Iraq and we should run away from the terrorists and give them a magnificent and enormous victory in Iraq, but we should fight terrorism in Afghanistan, and the speech goes on to say:
But we should bring our troops home, and I want our troops in our region now.
They are the exact words he used in his speech—I read it.
Bring the troops from Iraq and put them somewhere in our region.
Where these troops would be sent would be a matter of great interest to the government. But the Leader of the Opposition goes on to make a point that this government does not do anything to address counter-terrorism in our region. Elect the Leader of the Opposition and, no doubt, all of these problems would be solved overnight. The government is doing an enormous amount to help fight terrorism in our region. We have, for example, 12 memoranda of understanding on counter-terrorism with countries in our region, out of which comes an enormous array of activities. In the last budget—if the Leader of the Opposition had chosen to read the last budget or had concentrated on it—the government committed nearly $100 million—$92.6 million—over four years to boost regional counter-terrorism capabilities. That is a total of something like $400 million that we have spent on enhancing regional counter-terrorism capabilities since 2004.
The Australian government convened, with the Indonesian government, a ministerial summit on counter-terrorism, bringing together countries of the region. Out of that was established what is called JCLEC, the Jakarta Centre for Law Enforcement Cooperation. Something like 1,200 security officers have already been trained by this Jakarta centre—thanks to Australia, and obviously the Indonesians—in support of other countries in the region. In South-East Asia some 300 terrorists have been tracked down and brought to justice. I think we in this country should pay tribute to the work that the Indonesian government has done.
The point I make is this: the Leader of the Opposition professes to be some sort of an expert on foreign and defence policy. Indeed, I think members of the House may recall that he once said his only ambition was to be the defence minister—one he has fulfilled. That probably pretty much sums it up. But my contention here, in answer to the honourable member’s question, is that the Leader of the Opposition should read what the government is doing, he should understand what the government is doing—
Mr Speaker, how is this of any relevance—
Is the member for Griffith raising a point of order?
to Saddam Hussein’s favourite bagman?
Order! If the member for Griffith wishes to raise a point of order, he will make it clear from the start and go straight to his point of order.
I make the point that it is incumbent on somebody in the position of Leader of the Opposition to read what the government is doing and understand what the government is doing, not make lazy allegations. By the way, I congratulate the Australian today on offering him a free subscription to their newspaper. Let me suggest to the opposition leader: it is a good read today; you should have a good look at it. There are things in it that might interest you.
Savaged by a sheep, Mr Speaker.
The Leader of the Opposition will come to his question.
My question is to the Minister for Transport and Regional Services. I refer the minister to his answer yesterday in which he blamed on the states the gross delay in the production of the government’s promised legislation to underpin the role of Inspector of Transport Security. How does the minister expect to be treated seriously when he makes this claim about legislation that was promised 15 months ago but which has not been circulated in draft form to state governments?
My comments yesterday were accurate. There have been detailed discussions with the states in relation to what sorts of powers should be made available to the Inspector of Transport Security. The states need to be involved because many of the issues which would be under consideration are in fact within the province of the states. Land transport issues are essentially the responsibility of the states and therefore it has been necessary to discuss those issues with the states. That has happened at officer level and indeed also at ministerial level.
Mr Speaker, I rise on a point of order. It was a very specific question about draft legislation in accordance with the minister’s own statements before this House yesterday. Under standing order 104—
The member for Grayndler will resume his seat. The minister is clearly answering the substance of the question. Has the minister completed his answer?
Yes, I have finished.
My question is directed to the Treasurer. Would the Treasurer outline to the House the basis for the conduct of monetary policy which was instituted 10 years ago? Has the statement on the conduct of monetary policy contributed to Australia’s economic success over the last 10 years?
I thank Mr Causley, the honourable member for Page, for his question. It was 10 years ago yesterday that the government set Australia’s monetary policy in place. It was set in place by a statement on the conduct of monetary policy which was exchanged between the Governor of the Reserve Bank and me. The statement on the conduct of monetary policy set the objective of keeping underlying inflation between two and three per cent on average over the cycle. That agreement was entered into by an exchange of letters on 14 August 1996—my letter to the governor inviting him to subscribe to that statement and his letter to me confirming that he did fully understand and agree to that proposal. Since the statement on the conduct of monetary policy has been in place over the last 10 years, inflation has averaged 2.6 per cent compared with 4.5 per cent in the preceding 10 years; GDP growth has averaged 3.6 per cent per year, and, as the OECD notes, we have now surpassed the living standards of all of the G7 with the exception of the United States; and sustained economic growth has seen employment grow by an average annual rate of two per cent. So I think we can say that the conduct of monetary policy over the last 10 years, in association with the government’s economic policy, has been a big part of the nation’s success. Can I confirm for the record that the statement on monetary policy was entered into not between me and the member for Groom but between me and Mr Ian Macfarlane, the Governor of the Reserve Bank.
Some people will think that this was just pretty standard, that there was nothing new about it, but I thought that on the 10-year anniversary I should remind the House that Labor not only opposed the statement on the conduct of monetary policy but threatened to sue the government in the High Court for entering into it. I have a press release here dated 13 August 1996 from the Leader of the Opposition, Mr Beazley, headed ‘Labor to seek legal advice on Costello bank letter plan’. It says:
The Federal Opposition today decided to seek legal advice on Treasurer Peter Costello’s plan to require the next Reserve Bank Governor to sign a written “inflation first” pledge.
… … …
“The Federal Opposition will be treating this issue seriously and will not allow the Government to subvert the Reserve Bank’s legislative Charter ...
The quote continues:
“That is why we will be seeking further legal opinion on the legality of the Costello proposal, and the option of the Federal Opposition going to the High Court to force the Government to abide by all of the provisions of the RBA Act.”
Ten years after that statement on the conduct of monetary policy, no sane Australian would say that they would change it. Indeed, no sane Australian would now say it should not have been entered into. But on 13 August 1996 not only did the Labor Party oppose this forward-looking policy but they threatened to sue the government to prevent it being put in place. There are some people that wonder why Labor have no economic credibility. Labor have no economic credibility because they are led by the member for Brand, Mr Beazley—and exhibit A in relation to the economic incompetence of the member for Brand is his press release of 13 August 1996 opposing probably the best monetary policy that Australia has had, and probably the most successful monetary policy of any country in the world. It has been successful because nobody listened to him in relation to it. I table exhibit A on the economic incompetence of the Leader of the Opposition.
My question is to the Special Minister of State. I refer the minister to his written response to my recent inquiry about having all Commonwealth vehicles powered by LPG. In his letter, the minister stated to me:
LPG does not meet certain operational requirements of users, nor is the supply of LPG readily available in all rural and regional areas.
Doesn’t the minister’s letter completely contradict the Prime Minister’s claim that LPG is readily available in rural and regional areas?
I thank the member for Throsby. I do recall the letter that I wrote to her on the advice provided by the department with respect to the circumstances that they investigated following the receipt of her letter. I think this area is in fact an area that is changing quite quickly.
Mr Albanese interjecting
Order! The member for Grayndler.
Opposition members interjecting—
I did not actually write that letter yesterday, I might tell the opposition.
Mr Albanese interjecting
Order! The member for Grayndler is warned!
It is quite true that I said that LPG is not available in all rural and regional areas. It is available in about 3,000 service stations across Australia, but not in all rural and regional areas, and that is what my letter said. The policy at the time was that we did not need to look at every single change. As I said, I think things are changing quite dramatically. We are certainly encouraging a greater use of LPG. In fact, the announcements yesterday will make a huge difference ultimately in that availability of LPG, which will change the situation quite dramatically. It is a bit like ethanol, which is changing dramatically.
I do not know whether the member for Throsby has ever used ethanol in her car. I certainly use ethanol in mine. I filled up at an independent service station in Queanbeyan, the first service station in this region to provide E10. Take your cars down to Brett in Queanbeyan and get some E10, as I have been doing. The whole range is changing and this whole area will change a lot more in the weeks and months and years to come.
Mr Speaker, I raise a point of order.
Government members interjecting—
Order! Members on my right!
Mr Speaker, I think you have just made the point by having to draw members of the government to order. Why is it the case that I am the only person in this House who has been warned up till now in spite of the fact that there have been a number of interjections made?
The member for Grayndler is well aware that questions to the Speaker come at the end of question time.
Opposition member interjecting—
That is a matter for the member for Grayndler.
My question is addressed to the Minister for Foreign Affairs. Would the minister update the House on Australia’s reaction to the testing of intercontinental ballistic missiles by North Korea?
I thank the honourable member for Boothby for his question and for asking a question today while we have with us in Canberra the Minister of Foreign Affairs and Trade of South Korea, Ban Ki-moon, who has certainly in his time as the foreign minister been a very good friend to Australia. We have enjoyed a happy relationship with him. One of the difficulties that we—the Australian, South Korean and other governments—have had to deal with has been North Korea. The firing on 5 July of seven missiles, including one Taepo Dong II intercontinental ballistic missile, by North Korea was a matter of very deep concern. This Taepo Dong II missile, as I was explaining a couple of years ago, is a missile with a potential range of 15,000 kilometres, so it does have the potential capability of reaching the United States or, for that matter, not that it is likely to happen, even reaching Australia.
In response to this, the United Nations Security Council passed resolution 1695 imposing some legally binding measures for the first time on North Korea to prevent the transfer of missile and weapons of mass destruction components. We strongly supported that resolution and it was passed unanimously. I think one of the most interesting things about it was the very appropriate and encouraging support for that resolution by China. When I was in Japan recently, two weeks ago, I had the opportunity of discussing this issue with the Japanese government and also, a week earlier, with Secretary of State Rice in the ASEAN Regional Forum. Secretary of State Rice organised, on 28 July, a 10-party meeting, with five of the six parties to the six-party talks—that is obviously excluding North Korea—as well as five other countries including Australia. This was an opportunity for all of us to ensure that, as best we possibly can, we can have a coordinated approach to this issue. I think we do have a pretty well coordinated approach.
I also took the opportunity of meeting with the North Korean foreign minister, Paek Nam-sun, while I was in Kuala Lumpur, and once more reminded him of the international community’s demand for North Korea not only to immediately and unconditionally return to the six-party talks but to desist from any temptation to make further missile tests. Also, I think it is fair to say that we would of course be very anxious that North Korea would not contemplate conducting any nuclear tests, and that is a matter of some concern. It is not to say that I think it is going to happen, but it is a possibility.
The point I would make in conclusion is that this is a crucially important issue for our region. It is centrally important in addressing the issue that we, as a region and as a broader international community, remain coordinated and focused in applying, if you like, penalties to North Korea for bad behaviour and incentives for good behaviour should they decide to change their ways. And I have been encouraged by the support that China has shown for that policy.
My question is to the Special Minister of State and follows the answer he provided to the member for Throsby. Minister, didn’t your July LPG letter also say ‘the use of LPG fuel in all Australian government vehicles would be inconsistent with the government’s recent support for ethanol blended fuels’ and that the use of LPG is ‘contrary to existing industry development initiatives’? Minister, isn’t this just another example of divisions within the government—
Government members interjecting—
Order! Members on my right.
Martin is trying not to laugh, Joel.
The member for Flinders is warned!
Minister, isn’t this yet another example of divisions opening up within the government, with your own letter completely contradicting the centrepiece of the Prime Minister’s announcement yesterday?
I thank the member for Hunter. No, not at all. It is simply an example of how policy develops. There is nothing wrong with that. Changes have taken place in a whole variety of areas as we have undergone reform and development—particularly in the energy area, which has changed dramatically in the last few years. Certainly, the comments in my letter supported the policies that had been put in place by the Minister for Industry, Tourism and Resources, but the whole world of energy has changed dramatically—
Since July?
Even since July it has changed—absolutely—and we will continue to develop policy further.
Mr Speaker, I seek leave to table the July letter from the Special Minister of State to the member for Throsby—a very good letter.
Leave granted.
My question is addressed to the Attorney-General. Would the Attorney-General update the House on ASIO’s progress in ensuring it has the resources and the ability to continue protecting the Australian community?
I thank the member for La Trobe for his question. I think members recognise his very conscientious interest in matters of security and the protection of the Australian community. Of course, this government has consistently demonstrated its commitment to protecting security. We are doing so by ensuring that our agencies are able to effectively deal with the range of security threats that we might face. I think it is timely to note that in the United Kingdom the close collaboration between police and security agencies was instrumental in dealing with the difficult situation that they were facing. The fact is that our security agency and policing authorities work very closely together. I remember the words of the former director of ASIO, Dennis Richardson, who said they have a very high degree of interoperability together—and ASIO’s volume of work continues to increase as the organisation protects Australians and Australia’s interests from the threat of terrorists.
New leads in particular require that investigations continue—and we have seen a significant increase in the number of investigations required. Experience shows that we need to be constantly looking at emerging threats—a very difficult and challenging task. Last year we asked Allan Taylor to undertake a review of security organisations, and he recommended that substantial new resources be particularly applied to ASIO to meet those demands. The government has funded that body and it will increase ASIO staff to 1,860 over the next five years. It currently has around 1,100 staff—nearly double the number it had in 2000-01. The organisation plans to recruit 170 staff, net, each year for the coming years and is tracking well to meet this target for this financial year. Its recruitment will progressively, but substantially, grow our security organisation’s capability.
Our recruitment of intelligence officers is important—and that is strong. It will boost ASIO’s ability to meet the challenges of the security environment. Recruitment and clearance of suitable officers is a lengthy process, but we will not be compromising on the quality of staff that we need. This government has ensured that ASIO is now well resourced to continue protecting the Australian community in the difficult environment in which we are operating.
My question is to the Prime Minister and again refers to 17-year-old Billy Schultze who works at the Belair BP service station and has recently been suspended and punished financially for not noting down all the registration details of drive-offs that occurred during his shift. Is the Prime Minister aware that Billy was last week offered a new AWA that cuts his hourly rate of pay by almost $2 an hour—from $9.09 to $7.17—and that the company’s stated reason to Billy for this cut in his pay was ‘to cover the cost of drive-offs’? Does the Prime Minister think it is fair that, not content with penalising Billy for drive-offs, the employer is now penalising him by using the government’s extreme industrial relations changes to drive his wages down?
Mr Cameron Thompson interjecting
Order! The member for Blair! The member for Adelaide will repeat the last half of the question.
Does the Prime Minister think that it is fair that, not content with penalising Billy for drive-offs, he is now being penalised by the employer using the government’s extreme industrial relations changes to drive his wages down?
The last part of that question almost asks for an opinion, but I believe the Prime Minister will answer the substance of the question.
I do not want to see any employee in this country treated unfairly. I certainly do not want to see people who serve petrol treated unfairly. But whether Billy has been treated unfairly, as implied by the member for Adelaide, would depend upon all of the circumstances, and—
Mr Danby interjecting
The member for Melbourne Ports is warned!
I have unhappily had the experience in this House of questions being put to me by the opposition that have not had the full facts. I do not think the member for Adelaide would fall into that category and I would prefer to give her the benefit of the doubt. So I will get all of the facts. I will take the question on notice, I will get all of the facts and then I will make a reply.
My question is addressed to the Minister for Industry, Tourism and Resources. Would the minister update the House on industry’s response to the government’s energy initiatives announced yesterday? Is the minister aware of any threats to low energy prices in Australia?
Gary Nairn!
Order! The Deputy Leader of the Opposition is warned!
How’s interest rates—
And so is the member for Blair.
I thank the member for Kingston not only for his question but also for the hard work he has done in representing the concerns of his constituents, particularly on the issue of fuel prices and what the government should be doing in terms of relieving them. Those on this side of the House believe in responsible economic management so that, when the government need to give support to the community, we are able to. At a time of historically high oil prices globally, the government has acted to help Australian motorists, announcing practical steps for cheaper fuel options and long-term energy security. $1.5 billion of assistance was announced yesterday—
Mr Fitzgibbon interjecting
I will come to you, Member for Hunter—and amongst those initiatives was $677 million to encourage the uptake of LPG, $17 million to help service station operators upgrade equipment for ethanol blended fuel and $135 million to boost petroleum exploration in Australia. The response from industry and the support for this package is very strong. The NRMA has said it is:
... a seriously good package for families and the local alternative fuels industry.
The Australian Automobile Association says:
The initiatives ... will increase competition ... through making alternatives, such as LPG and ethanol blends, more competitive and attractive to the average consumer.
On that topic, in the three hours that the hotline had operated to noon today, there had been 1,100 calls—
Mr Fitzgibbon interjecting
Are you listening to this, Joel? There had been 1,100 calls to that hotline centre and 80 per cent of them were about retrofitting LPG to their vehicles.
Mr Fitzgibbon interjecting
Order! The member for Hunter!
The member for Hunter does not understand a basic principle of commerce: that if you increase demand you increase supply. And that is what will happen with LPG supply—
Mr Tanner interjecting
Order! The member for Melbourne.
Despite the fact that I am not the Reserve Bank governor, I know a lot more about economics than you do. Of course, I am asked about—
Mr Tanner interjecting
The member for Melbourne is warned!
Mr Speaker—
Use the banana defence.
We know about bananas. I am asked about threats to energy prices in Australia and the threat comes from those who sit opposite and their climate change policy. The Labor Party has a policy to reduce greenhouse gas emissions by 60 per cent by 2050. Recent ABARE analysis said that a 50 per cent reduction would double the price of fuel to Australian motorists—
Mr Beazley interjecting
A load of rubbish, he says!
You’ve doubled it in two years!
Order! The member for Wills!
On the Labor Party’s policy, while they sit here—
You’ve doubled it in two years!
The member for Wills is warned!
and deride what the government did yesterday—something that was welcomed and supported by industry and has been supported by motorists today—they have in their back pocket a policy which will double the price of petrol to motorists in Australia.
My question is to the Minister for Employment and Workplace Relations. With the closure of Cowra’s largest employer, the Cowra Abattoir, and the loss of 200 jobs, will the minister confirm to the House his commitment to swift financial assistance, especially as workers’ entitlements may not be finalised for seven weeks and these job losses represent four per cent of Cowra’s working population? Will the minister consider an assistance package to ameliorate the impact of the job losses on a Cowra economy where other manufacturers are also struggling, mainly against unfair international competition? Could Cowra Abattoir workers expect, along with provisions of the GEER scheme, extra support, similar to that provided in the wake of the Adelaide Mitsubishi restructure in 2004?
I thank the member for Calare for his question and for his obvious interest in the workers at Cowra. I have been informed that Cowra Abattoir is currently under voluntary administration. In the normal course, if a decision is taken by the administrator to place Cowra Abattoir into liquidation, then this government will provide swift financial assistance through the GEER scheme to support those eligible employees who remain out of pocket because of any inability on the part of the employer to provide them with their entitlements.
I remind the House that, since the inception of this scheme in the year 2000, the Australian government has helped over 59,000 employees and has advanced over $697 million in assistance to them. This is a scheme that only this government has put into operation. A couple of years ago we sought that the states contribute, on a fifty-fifty basis with the Commonwealth, to a national scheme that would provide further entitlements to workers who find themselves in this situation in Australia. Regrettably, we have not had assistance from the states in order to do that.
Mr Speaker, I raise a point of order. I appreciate what the minister is saying but I ask that he address that extra support package for retraining and other processes for an economy that is being double-whammied by impacts, including Cowra Abattoir.
The member for Calare has asked his question, and the minister is still giving his answer. I call the minister.
I fully appreciate the member for Calare’s concern in this regard. As I said, we will await the advice of the administrator. I understand that the administrator is trying to sell this business as a going concern. If that business can be sold as a going concern—which might involve some restructure because of the financial difficulty that the business is facing—it will be the best outcome for the workers, their families and the people of Cowra more broadly because it will preserve jobs in Cowra. We will continue to monitor the situation and, if there is any further information I can provide to the honourable member, I will do so.
Can I make this final point: we were mocked in this place because we said, when this was raised by the Labor Party and the ACTU, that in some circumstances businesses will have to restructure to remain viable. The Office of Workplace Services found that this business had been facing financial difficulty over a long period of time. Regrettably that has proven to be the case, and I think some of the people on the other side should think again about what they said earlier on.
My question is addressed to the Minister for Families, Community Services and Indigenous Affairs. Would the minister inform the House of the government’s new private sector approach to improving nutrition in remote communities through the establishment of Outback Stores?
I thank the member for Solomon for his question. He would be aware that most remote Indigenous communities rely on just one store per community. The unfortunate reality is that many of those stores have had poor and inadequate management. There has been a poor range of stock and, quite often, that stock has been overpriced. Just today Alan Williams, who is the former executive of Coles Food and Liquor and is now on the new board of Outback Stores, which had its inaugural meeting here yesterday, had this to say:
There are many examples where there are more products going out the back door than there are going out the front door, and we have got to stop that. The second stage is that we will start working with nutrionists who will work with the stores and with the community health workers and local schools to start raising nutritional profile.
As the member for Solomon would be aware, the Council of Remote Area Nurses of Australia said, when asked by the government, that if there were one thing that could do more to lift the life expectancy and the nutritional value for Indigenous people, in particular Indigenous children in these remote communities, it would be the better provision of food. The expertise of Coles and Woolworths has been provided and, to that end, I want to pay my public thanks to Roger Corbett and John Fletcher, two of Australia’s greatest retailers, who have put the expertise, their personal commitment and their companies’ commitment behind this initiative to ensure that Australian Aboriginals that live in remote communities have access to the best training, the best management, good supply chains and good point of sale operation so that nutritional value can be delivered in these communities, which is not currently occurring in all of them.
We should point out that there are some excellent examples. Arnhem Land Progress Association, ALPA, is but one that has done a wonderful job up there with its six stores. It also supports seven others. But what is paramount here is that more than 100 other stores need assistance. The Outback Stores initiative will provide the best quality advice that Coles, Woolworths and Metcash can bring to bear. The sum of $48 million has been provided by the federal government through my colleague the Minister for Employment and Workplace Relations and his department to bring all of that together to deliver better health outcomes, better economic outcomes and a brighter future for remote Indigenous Australians.
My question is to the Minister for Human Services. I refer the minister to a constituent of mine, Ms Brenda Hendricks of Carlisle, who has an incurable brain tumour. She was denied access to the disability support pension by Centrelink and was then advised to apply for the Newstart allowance. Is the minister aware that, despite Ms Hendricks informing Centrelink that she would be unable to attend an in-person eligibility assessment because she was recovering from brain surgery and had medical records to prove this, Centrelink required that Ms Hendricks attend their office for an in-person assessment? Is the minister aware that Centrelink then sent threatening letters to Ms Hendricks, even though she had supplied them with the required medical evidence to prevent her benefits from being cancelled? Will the minister investigate these matters and ensure that Centrelink treats all Australians suffering such severe medical conditions with respect and sensitivity?
Whenever any member of parliament has an issue like this, if they forward the information to me—
Opposition members interjecting—
Order! The minister has the call.
I am happy to investigate the matter in detail.
It shouldn’t have happened in the first place.
It is easy for the opposition to try and shoot bullets on these sorts of issues. These are very serious issues dealing with people’s lives. If you contact me, ring me, provide me with the information, I am happy to look into the individual cases.
My question is addressed to the Minister for Health and Ageing. What do the latest figures show about the government’s private health insurance initiative? What does this say about the overall strength of Australia’s health system?
The member for Braddon is a great enthusiast for the health facilities in his electorate—most notably and most recently, the brand-new rural clinical school at Burnie, which will soon be training up to 50 or 60 medical students in his area. I want to congratulate him on the fact that the GP bulk-billing rate in his electorate is now 17 percentage points higher than it was in December 2003.
The private health insurance rebate is one of the signature policies of the Howard government. It saves the average privately insured family more than $1,000 a year—and that is great news for the 26,000 people in the electorate of Braddon who are covered by private health insurance. I can advise the House that in the last year an extra 150,000 people joined the ranks of those covered by private health insurance. That means 10.2 million Australians are now covered by hospital or ancillary policies, and that is an absolute, all-time record. As the member for Braddon knows, it certainly helps to take the pressure off our public hospitals because, if the two million admissions to private hospitals a year did not have private health insurance, sure as anything they would be on the public hospital waiting list queue. This government is getting on with the job of making a good system even better.
I think it is worth noting that, since the last election, government members have asked no fewer than 105 questions on health—that is, 105 questions in 115 parliamentary sitting days. There have been just 14 questions from the member for Lalor. Since the last election, the member for Lalor has put out 118 press releases and not a single policy.
Mr Speaker—
Order! The minister will resume his seat. Has the minister concluded his answer?
No.
I rise on a point of order. Why do we have relevance rules in the standing orders when this minister is answering a question which he was not asked. He is now talking about opposition policy and performance—
The member for Griffith will resume his seat. The Minister for Health and Ageing is answering the substance of the question. I call the minister.
Obviously from that point of order the Leader of the Opposition is hiding the member for Griffith as well as he is hiding the member Lalor. The simple truth of the matter is that this government is interested in health. All the opposition are interested in is the politics of health. They are not interested in any benefits for patients. Meanwhile, this government is going from strength to strength as the best friend that Medicare has ever had.
Government members interjecting—
Order! Members on my right.
They are laughing at you, Mr Speaker.
The member for Grayndler is on thin ice.
My question is to the Prime Minister. I refer the Prime Minister to the fact that wholly owned Qantas subsidiary Jetstar will utilise AWAs in its international services later this year, with remuneration between $41,000 and $46,000 for cabin crews. Has the Prime Minister seen the comment by Jetstar CEO, Mr Alan Joyce, that most people would regard that ‘as a phenomenal salary’? Isn’t it the case that this so-called ‘phenomenal salary’ will see Jetstar international cabin crew paid between 20 and 30 per cent less than comparable Qantas crew? Prime Minister, isn’t this just starting your wages race to the bottom from Jetstar to Qantas?
I thank the member for Perth for that question. I am aware of the Jetstar agreement. I am aware of the fact that 200 new jobs have been created. I am also aware of the fact that there were 2,800 applications for these 200 jobs. And I am also aware that, in addition to the fact that the jobs will pay between $41,000 and $60,000 a year, the AWAs include entitlements such as a three per cent pay rise annually for each year of the agreement, six weeks annual leave and a guaranteed eight rostered days off every 28-day rostered period. I am also aware of the fact that there was nothing in the pre Work Choices law that required Jetstar employees in these circumstances to be paid the same salary levels as Qantas long-haul cabin crew. In other words, this is not the result of Work Choices; it is the result of the normal operations of the labour market—and the member for Perth ought to know it.
My question is addressed to the Minister for Education, Science and Training and the Minister Assisting the Prime Minister on Women’s Issues. Would the minister inform the House how strong economic management is increasing opportunities for women in the Australian workforce?
I thank the member for Forde for her question and note her interest in these matters. The Howard government has a strong record of supporting women throughout their life stages. We have delivered choice and opportunities for women so that there are more jobs for women, higher pay and more educational and training opportunities. Women have benefited not only from the strong management of our economy but also from a range of initiatives and reforms including our Welfare to Work reforms, our Work Choices legislation, the increased superannuation and the co-contribution scheme and the increase in the number of child-care places that have been made available for working women.
I am pleased to announce to the House that last week, for the first time since our coming to office, the number of new jobs created for Australian women passed the one million mark: 1,013,600 new jobs for women have been created since 1996. Under Labor, there were a million people unemployed. Under the coalition, a million new jobs have been created for women. Female unemployment is at 4.8 per cent. There are in fact over 4.6 million women in employment in Australia, and that is a 28 per cent increase since 1996. Interestingly, the employment rate of women in the 60 to 64 age cohort has more than doubled since we came to office. Under the Howard government, women of Australia are receiving many more choices and many more opportunities.
My question is to the Prime Minister. I refer the Prime Minister to wholly owned Qantas subsidiary Jetstar’s AWAs, with remuneration between $41,000 and $46,000 for cabin crew. I again refer the Prime Minister to the comment by Jetstar CEO Alan Joyce:
... most people would regard [that] as a phenomenal salary ...
Isn’t it the case that the phenomenal salary in Qantas or Jetstar is the salary of CEO Geoff Dixon, who under the terms of his new contract will be paid nearly $4 million a year? Why, under the government’s legislation, is there a wages race to the bottom for Jetstar and Qantas cabin crew but a race to the top for the CEO?
I believe that the only thing I can usefully add to the answer I gave to the member for Perth is to make what I hope is the reasonable observation that I am not aware that the industrial relations policy even of the Australian Labor Party in 2006 requires that everybody working for a company be paid precisely the same wage—which of course is implicit in the envy based question asked by the honourable member. The reality is that here we have 200 more jobs being created. We have a 30-year low in unemployment. We have the highest participation rate on record. And all the Labor Party can do is to begrudge another 200 Australians getting a decent job. I think the Labor Party ought to be ashamed of itself.
My question is addressed to the Minister for Workforce Participation. Would the minister inform the House of the benefits of Work for the Dole in building job seekers’ skills?
I thank the member for Deakin for his question and for his commitment to helping drive down Australia’s numbers of unemployed. Australia’s dole queues have halved since 1996, as our Prime Minister has just reminded us. The Howard government has created nearly two million jobs. There has never been such an amazing time, a great opportunity for our long-term unemployed to find a job—often, for them, the first job. Our long-term unemployed are amongst the most disadvantaged in Australia’s society.
Our new Welfare to Work initiative is of course giving job seekers an extra hand up, but one of the things we have found is that employers are tending to reject some half of their applicants for a job vacancy on the basis that they do not have relevant work experience or, in many cases, that they have no work experience at all. That is where our Welfare to Work program comes into it. We are now requiring each project in our Welfare to Work and Work for the Dole programs to have relevant, local workplace skill deficits reflected in the program itself. As we know, there are a lot of job shortages in hospitality, tourism, retail, manufacturing and services, just to name a few of these areas.
Let me give you some examples of how Work for the Dole is now giving people locally relevant skills and work experience. For example, in Dandenong, in the electorate of Bruce, the Red Cross is having teams of our Work for the Dole people help to make their Christmas cakes and bakery products, giving them a great deal of experience in becoming hospitality and cooking employees of the future. In Ingleburn, in Sydney, in the electorate of the member for Werriwa, the aged care facility is benefiting from Work for the Dole participants learning about that industry sector, helping with the care of the aged and being able to walk out of that six- or 12-months experience with a resume or a CV which is rich in information about how they are skilled and ready to work in the aged care sector. In the electorates of Lalor, Blaxland and Groom, in Laverton, Bankstown and Toowoomba, we have a lot of metal fabrication and welding being taught to our Work for the Dole participants, who are making trailers and outdoor furniture. They can then, on their resumes, explain a six- or 12-month work experience and walk into jobs in metal fabrication—another area of skills deficit across much of Australia. Finally, in Solomon, up in the Northern Territory, carpentry is being undertaken and taught to Work for the Dole participants. They are producing toys and furniture for Christmas for giving to the most needy.
So here is one of our most successful employment services programs, one that is now nine years old and that has helped over half a million of our long-term unemployed Australians, some of our most disadvantaged, into work. I want to congratulate the Howard government for this initiative. It was resisted and rejected. It is in fact doing an enormous amount of work in the electorates of the opposition, helping some of the most disadvantaged into a job, to share in this country’s prosperity.
Mr Speaker, I ask that further questions be placed on the Notice Paper.
Mr Speaker, I would like to add to an answer.
The minister may proceed.
The member for Throsby asked me a question regarding LPG in government vehicles. In her question she failed to reveal that her letter to me was requesting that she have a Holden Berlina fitted for LPG. In my answer I pointed out that it was not possible for a Holden Berlina to be fitted for LPG, but there were various other options of cars with LPG that members and senators could choose.
Ms Gillard interjecting
Order! The member for Lalor!
The member for Throsby decided to maintain a Berlina in unleaded rather than going to a different vehicle with LPG. But I would certainly encourage all members and senators to look at their options carefully.
Mr Speaker, I wish to make a personal explanation.
Does the honourable member claim to have been misrepresented?
Yes.
Please proceed.
Pursuant to the comments just made by the minister, in my letter to the minister I raised two issues. One was the issue requesting the option of having an LPG tank fitted into my next car. The second issue I raised was whether the government had given consideration to fitting all the Commonwealth fleet with LPG tanks on the grounds of saving taxpayers’ money and on environmental grounds—in my view there was a good case for all cars to be fitted with LPG tanks. If you look at my original letter to the minister and the minister’s reply you will find the context in which the correspondence was sent.
Order! The member for Throsby has made her personal explanation. The member for Throsby will resume her seat.
Mr Speaker, I wish to make a personal explanation.
Does the honourable member claim to have been misrepresented?
Yes, Mr Speaker, in question time today.
Please proceed.
The Minister for Human Services implied that I had not raised the matter with him that was discussed in question time today. This matter was raised directly with the minister by my constituent. I have an acknowledgment of the email here which demonstrates that fact.
Mr Speaker, I wish to make a personal explanation.
Does the honourable member claim to have been misrepresented?
Most grievously, Mr Speaker.
Please proceed.
Doubtless you will recall giving me the call just prior to question time yesterday during members’ statements. I made a statement about Sydney airport and the implications for my electorate in relation to aircraft noise. I checked the Hansard today, and mercifully I was faithfully recorded, but I was also recorded as having given a glowing endorsement a minute earlier to the Howard government and to the Prime Minister in relation to the government’s support for the arts in Geelong. Specifically I was recorded as saying, ‘This evening I will be pleased to represent the Prime Minister and the minister for the arts at the official unveiling.’ I have an acute sense of political survival and this would be most unsettling for my constituents in Lowe.
The member has made his point. The member for Lowe will resume his seat, and I will respond to him. The member for Lowe would be aware that Hansard has made an error. I also noticed it and have taken steps to have Hansard correct the record.
Mr Speaker, I ask you to give consideration to this when you ask me to leave the chamber—which is very rare, I know. Yesterday you asked me to do that. I have been informed by an attendant that we upset one of the children who was viewing parliament, who thought that you had asked Santa Claus to leave. In the future I ask you to give consideration to this before asking me to leave.
In response to the member for Lyons, I don’t think there is anything further I wish to add.
A document is tabled as listed in the schedule circulated to honourable members. Details of the document will be recorded in the Votes and Proceedings.
Mr Speaker, I have a question to you concerning your interpretation today of standing order 104. Standing order 104 simply states:
An answer must be relevant to the question.
Mr Speaker, on three occasions today questions were asked of ministers opposite which did not ask for those ministers to speak at all about opposition policies or anything of that nature—alternative views of the world or the state of the opposition in general, yet those three ministers—the Treasurer, the minister for education and the minister for health—saw those questions as providing them with open slather to rip into the opposition. The standing orders, as you know, Mr Speaker, are designed in a way which provides an automatic opportunity for the government of the day. This government, in particular, systematically abuses the standing orders.
The member will not debate his question.
The one standing order we have as an opposition is standing order 104, which requires relevance. So what I am asking you to do, Mr Speaker, is to reflect on your interpretation of that standing order and your requirement in the future of ministers when they are asked questions to be relevant to those questions, particularly on the question of opposition policy.
I thank the member for Griffith. I would remind him that it has been a long established practice by successive occupiers of the chair that an answer should be relevant in some way. When a question asks, for example, whether there are risks to government policy or threats to government policy, the minister does have the option to answer that in the way he or she chooses. In following that long established practice of previous occupiers of the chair I have ruled accordingly.
On 21 June the honourable member for Canning raised a matter of privilege in connection with an inquiry being conducted by the Joint Committee of Public Accounts and Audit. The member’s complaint concerned a letter sent to the committee which disagreed with statements the honourable member had made in a submission to the committee. In accordance with practice in these matters, the issue was referred to the committee itself. I have now been advised by the chair of the committee, the honourable member for Casey, that the committee has considered the matter but concluded that, from its perspective, no issue of privilege arises. I present the chair’s letter and I thank the committee for its advice.
I have received a letter from the honourable member for Brisbane proposing that a definite matter of public importance be submitted to the House for discussion, namely:
The Government’s mismanagement of aviation security and its failure to put in place the practical measures necessary to make Australian aviation safe from terrorism.
I call upon those members who approve of the proposed discussion to rise in their places.
More than the number of members required by the standing orders having risen in their places—
Another day in question time, another mistake from the Minister for Transport and Regional Services. Yesterday, in answer to questions, he was telling us that the reason the Commonwealth cannot legislate to provide a basis for the Commonwealth Inspector of Transport Security was somehow the states’ fault. Of course, the reality is far from that. The government have dragged the chain—in fact, no draft legislation has been provided to any of the states. It is little wonder that there has been no response from the states—they have not been given a firm proposal by the Commonwealth.
Today we saw it again. Today, in answer to a question in relation to the open door policy at Sydney airport in recent times, the minister claimed that there was no problem at all, that this is all part of the grand plan of security at our largest airport—that you leave a security gate open. I draw the minister’s attention to the actual article. He was very quick to assert that the Daily Telegraph were lying about this. I suggest he have a look at the photograph in the article. What he will discover, in looking at the photograph in the article, is that the gate displayed, completely open and without any security guard, has on it the large Air Services poster: ‘Restricted area’. That ‘Restricted area’ poster includes the normal information that you would see in all restricted areas in all airports around Australia. It makes it clear that you can only access the area if you are:
... persons holding and displaying a valid identification card for this area and a lawful excuse for entry.
That is what the sign on the gate that was left open says. Today, the minister would have us believe that leaving that gate open is somehow part of his grand plan to protect Australia’s travelling public and the aviation industry.
That fits with a few other things the minister has had to say. We found out today that our regional airports are secure, not because there are police and Protective Services personnel available to look after them—there are not—but because there are four teams in Australia to look after about 140 airports. You do not have to be too good at either geography or maths to understand how poor that coverage is. No, we don’t need any of that: the minister assured us today that what we have are ‘plans’. We have security plans. You can just see the boffins, the bureaucrats, writing out their security plans, and the impact that would have on a potential terrorist. The terrorist would be sitting down thinking, ‘We’d better not attack that airport—they’ve got a plan! They don’t have any security guards; they don’t have any security gates—but they’ve got a plan.’ You can see someone walking into a bank to conduct a hold-up and telling everybody: ‘Stick ’em up, I’ve got a plan!’ It is an absurd proposition that the minister advanced today that our aviation industry and our regional airports are secure—even though this government have mismanaged that for some years, they are secure because they have written a plan. The facts are that, when it comes to matters of border security and airport security, the Howard government are all hot air and no substance. They are long on talk and they are short on practical measures.
Howard government ministers think that national security and border protection are the names of some photo studio. They never miss a photo opportunity. If there is someone there in uniform, if there is a flag to drape themselves in, they will be there like a shot; but get them to focus on the necessary practical measures that are required to provide security for the Australian travelling public and they are nowhere to be seen—we get the glib, shallow comments that we have seen from the minister this week in parliament. Australia does not protect its borders by pretending they do not exist, like the Howard government wants us to; and we certainly do not protect our airports by just talking about them in the way this government does.
The government has had five years since the terrorist attacks in America on September 11 to get these things right. Instead, dangerous security lapses are becoming common. Barely a week goes by now where there is not a serious breach of security in one of Australia’s airports. Barely a week goes by without another example of this government’s incompetent management of aviation security, at a time when aviation security is front and centre, part of the proper management of the nation in the face of a terrorist threat.
Yesterday’s incident, which I have referred to, saw literally a procession of vehicles going in and out—no guard, no boom gate, no security—of an area clearly identified as a security area for which people required passes. That was not the only incident at Australia’s largest airport. Remember, this is our premier airport. This is the largest, busiest airport in the nation. You might think that, if security were correct in one place in Australia, it would be at the busiest airport in the nation. But just three weeks ago there was another incident at Sydney airport, when two vehicles tailgated a van through a security gate. That gate was set up to allow one car to pass with a security pass. Two other vehicles followed them through. On that occasion, we were lucky—it was an act of road rage. Contemplate for a minute what might have happened if it were not an accident—that is, if it were a planned attack; if terrorists actually wanted to do some harm. We have security by good luck and good fortune, certainly not by good management. The simple fact of life is that the incidence of vehicles tailgating was drawn to the attention of the government more than a year ago.
You have to remember that the government were put on notice, like all governments in the world, on September 11 2001. We all knew that aviation was going to be a focus of attack by terrorists. Four years after that, they got an expert from the UK, Sir John Wheeler, to come here and tell them what they should have been doing for the previous four years. One of the things that John Wheeler specifically mentioned was the problem of vehicles tailgating through security gates at our major airports. So a year ago they got advice from their own expert, and here we are in 2006 and a couple of weeks ago precisely that same incident occurred. Where? Our busiest and largest airport—Sydney airport.
These incidents are not isolated. The example in the Daily Telegraph that was mentioned in question time is not a one-off. These are problems that are recurring all around Australia and the minister sits in blissful ignorance of all of this, wanting us to believe that it is all being put right. If those two people who were tailgating through security gates actually did have an aviation security identity card—one of the industry security cards—it probably would not have helped us a great deal anyway. The government put in place this aviation security identity card. It was a good idea; they just have not managed that properly either. In the couple of years in which it has been operating, already in excess of 380 have been lost or are unaccounted for. Think about that for a moment. This is the security pass that gains you access to the secure side of airports around Australia and, in the short time it has been operating, we have lost 380-odd of them.
Yesterday, when asked about this, the minister tried to fob it off by saying, ‘It is just like the Parliament House pass. You might lose one of them.’ I have news for the minister: it is not like the Parliament House passes. Unless he knows something about the checks done on Parliament House cardholders that the rest of us do not, there is not a criminal record check done on people holding a Parliament House pass. The Federal Police and ASIO do not do detailed background checks on everybody who has a pass, including those in the gallery. It would be an interesting exercise perhaps if they did. The simple fact is that an aviation security identity cardholder is subjected to all of that, and quite rightly so, because these people have access to security sensitive areas of airports at a time when we know the aviation industry is a target of terrorists. Yet yesterday the minister blithely passed it off as if it were just like misplacing one of the Parliament House passes. How much confidence do you think that instils in the people who work in the industry, who regard this government’s administration of these matters as a very sorry, sad joke?
There have been plenty of other incidents at Sydney airport that I could mention. I will just refer to two. We all remember the Sydney airport camel suit incident. That was a good one. We all had a chuckle about that. It was a bit of a problem really though. Baggage that was supposed to have been securely checked and examined went off and someone opened it up, took out a camel suit and ran around the tarmac in it. That is what you call a high-security environment! That is the administration this government is running. That was last year.
The member for Lowe has quite correctly pointed out the problems of closed-circuit television monitors at Sydney airport. They are a good thing to have, Minister. You should have a look at them. I commend them to you. The only trouble with CCTV monitors is that for a good deal of the time they are either out of focus or pointing at the wall. They really will not tell you a great deal about what is going on. The member for Lowe is on top of that and I am sure that in due course, one of these days, hopefully before the next election, the member for Lowe might even get some answers to his questions that are on notice about that.
Then there are the regional airports in Australia that are a major weak link in our national security environment. This is not news to the government. I assume they did read the Wheeler report—after all, they went to the trouble of bringing Mr Wheeler from England to conduct the inquiry.
Mr Danby interjecting
The member for Melbourne Ports is in a very delicate position.
The report from Sir John Wheeler pointed out the problems at regional airports and the need for an urgent upgrade, particularly in those airports in regional Australia that have flights directly into major airports: Brisbane, Sydney, Melbourne—the major counter-terrorism response airports. The simple fact is that they do not check people. That does not happen. At the moment you can hop on a plane without having your baggage checked, without going through any X-ray scans or metal detections. You can hop on a plane and fly directly to Sydney, Melbourne or Brisbane and be airside on a secure part of the tarmac without any security check ever having been done on you.
The minister may well say, ‘Yes, but there are procedures put in place for people who actually fly to those airports to then be checked.’ That does not always happen, sadly, because what ends up occurring is that when flights are delayed from those locations—and there are plenty of people we can produce to attest to this—passengers are ushered quickly to the new aircraft they are getting on, which then takes them to the next port of their destination, which can be another capital city. So there are plenty of people who are leaving from places like Dubbo, flying to places like Sydney and going on to subsequent jet flights without going through any check of their baggage or of themselves and their carry-on baggage.
That is just wrong.
The minister says, ‘That is just wrong.’ It is like the last two days when he has made mistakes on both the matters. Minister, before you open your mouth about this and put yourself on the record, I suggest that you do not take the word only of those people in your office. Talk to people on the job who work in the environment every day of the week and you might find that some of the advice you have been given is not right.
The minister has also made mention of metal detection wands and the importance they play in regional airport security and the fact that the government have had a program of providing these wands to regional airports. That is a good thing to do, Minister. It is a pity that they are not used in those regional airports, isn’t it? As has been reported in a number of media outlets over the last couple of days, the simple fact is that in most of those regional airports none of those wands is used; they are all under lock and key.
I noticed in yesterday’s Adelaide Advertiser a story precisely about that problem which noted alarm at lax rural flight safety in South Australia. The article commenced by saying:
Hundreds of thousands of passengers have boarded aircraft at regional airports in the past two years without security checks, while detection equipment remains unused.
That is happening in South Australia, and I can assure the parliament that is in fact happening in a number of places. It might have been a good idea if the government had decided to get its top public servant on security on the job. In 2003 the government decided they would appoint an Inspector of Transport Security. It was a good idea. The trouble is it took them an entire year before they had filled the position, so 12 months later they appointed Mick Palmer—a good decision. I think Mick Palmer’s experience in the AFP suits him well for the task. The trouble is that since then he has hardly been given a task to do. Amazingly, since the London terrorist attack a year ago—and you would have thought the government would have a heightened concern for these matters—he has been on the job one day a week on average. It might have been a good idea to get the Inspector of Transport Security out checking Sydney airport and some of these matters that have come to light in the course of the last three weeks.
It has been five years, Minister, since the US attacks when we were all put on notice about these matters. It is clear that the government are incapable of putting in place the necessary practical measures. The government are behaving like the emperor with no clothes: all bluff and no substance. They are going around parading their rhetoric and everyone in the industry knows that is all it is: rhetoric without substance. The simple fact that is becoming increasingly obvious to the industry is that only Labor has got a demonstrated policy and a drive to get these things right. The government’s handling of this matter over the last five years has been one of incompetence. The Australian people and travelling public deserve much better. (Time expired)
The honourable member for Brisbane has trotted out all of the old stories and all of the old discredited arguments without providing any plan or vision for how in fact Australia can handle its airport and other security obligations in any better way. I took the opportunity to read the Labor Party policy statement on airport security before the last election and there is not a single thing in that policy that we have not already completed and in fact exceeded. The reality is that Labor has no new plans, no new ideas and no new reasonable assessments and approaches to these issues.
I have always had a high regard for the member for Brisbane. We came into parliament together and I think he has generally been a decent sort of a guy. I have been a bit disappointed lately, however, because, even when he has been told that something that he has said may have been an inadvertent error, he has gone back and repeated it again and again, and in reality therefore has perpetrated an attitude of pathetic scaremongering without any substance. One of the worst examples of this has been his repeated statement that Australia does not check the baggage of international passengers.
It’s the 100 per cent X-ray policy.
Okay, you say we do not X-ray the baggage of international passengers.
But it’s the 100 per cent X-ray policy.
That is simply not true. You obviously misled the Leader of the Opposition, because he said the wrong thing yesterday, and then this morning the member for Griffith made the same inaccurate statement. One hundred per cent of the checked baggage on international packages is screened.
Mr Bevis interjecting
That is the law—100 per cent of it—and it is checked using advanced technology, in-line X-ray equipment. It has been the law that 100 per cent has to be checked since December 2004—and that is happening and has happened for more than a year. So please, Member for Brisbane, the statement is not correct. The law requires this baggage to be screened—and it is. For that reason I am disappointed that that statement continues to be made.
Australia’s security regime is intelligence driven. It is risk based and it is outcomes focused. I think everyone accepts that the level of risk in some places is higher than in others and that we should devote the maximum effort and our expenditure to targeting those areas where the risks are the highest. Inevitably—and you do not have to be an authority on security to realise this—the capital city airports are more likely to be targets than the regional airports, and the small country airports are far less likely to be targets than those where there are big volumes of traffic. Indeed, whilst Australia’s security risk is assessed as being medium, the reality is that the assessment for regional airports is low.
It would be possible for the airports and airlines to screen every passenger at a regional airport in the same way that the airlines and airports screen passengers at capital city airports. I asked for a rough estimate of the cost of that the other day and it came back at about $500 million if we wanted to screen the four per cent of passengers in Australia who board airports in regional areas where there is no screening. It works out at around $3½ million per site. Some of these airports only take 10 or a dozen passengers a week. Are you seriously suggesting that we should impose a cost of millions of dollars on the local council and local airports struggling to manage services in those areas? And of course they would pass it on to the passengers. Fares would go up by hundreds of dollars in some of these places if we were to impose those kinds of restrictions.
I guess we would if the assessment risk was such that it needed to be done, but the assessment risk is precisely the opposite. We have the Independent member for Mildura, Mr Savage, making these kinds of irresponsible statements in Mildura about how Mildura was a high-risk airport. Indeed, the experts say it is a low-risk airport, but Mr Savage thinks he knows more than they do. Does he want to impose upon the people of Mildura and district levies on their air tickets of $50 or $100 when the experts say the risks do not justify it?
For that reason we need to have a multilayered approach to the way in which we deal with airport security. We do not rely just on aviation security identification cards, we do not rely just on security machines, we do not rely just on security guards, we do not rely just on fences, we do not rely just on deterrent penalties, we do not just rely on closed-circuit television, we do not just rely on intelligence support and we do not just rely on police and other law enforcement agencies. We rely on a combination of all of these things. Inevitably there will be faults in any one of these elements of a security package. No-one is perfect and machines are not perfect, and from time to time therefore somebody may breach one layer of security. But one has confidence that there are many more layers of security to ensure that our system can operate effectively and smoothly. An excellent example of the additional security that has been provided in regional airports is the government’s investment in placing security doors, hardened cockpit doors, on all of the aircraft carrying more than 30 passengers and operating into these country airports. That is an important security measure that the government has fully funded.
The other day I read a report somewhere that the government has spent $35 million on airport security since September 11. I suspect it was a reference to the $36.5 million that we have been providing to regional airports to provide just basic levels of security—things like fences, CCTV, locks and lighting et cetera. Since September 11 we have provided over $1.2 billion in expenditure on security. Of course, the government has not done it alone—the airports have also spent huge amounts of money on upgrading their security at their expense. The airlines spend large amounts of money on security checking, again at their expense, although obviously they pass those costs on to the users of their system. So there has been a massive national effort. It has not been the government alone, although we have provided leadership. We have expected, and indeed required in many instances, substantial upgrading of the services that are provided at airports—and, for that matter, at other transport facilities around the nation—from those who have primary responsibility for securing those systems, but we have been prepared to work with them.
When outside observers have looked at our system, they have been complimentary. Wheeler, in his report, was overwhelmingly complimentary about what we have been able to achieve in Australia and, indeed, made the point that we are world leaders in security in a whole range of areas. Yes, he identified 17 areas where he felt we could make improvements. The government has adopted all of those 17 recommendations and we are in the process of implementing the last of them.
I think one of his most important recommendations was the need to create a unified policing structure at each airport under a police commander. We in Australia have suffered because of territorial wars between state and federal police, between Customs and Quarantine and all the other officers who are there. It is important that there be a seamless approach to security issues and that they work together. We sought the cooperation of the states because I think it is very important that the state police also have a presence in and around airport areas. Some states were very cooperative. Victoria opened up a police station right outside Melbourne Airport because they recognised that some of the criminal activity that they might be interested in could well have an airport gateway. At the same time, the New South Wales government closed down the police station close to the airport and it is now probably three-quarters of an hour away whenever a call is required. So there has not been the level of cooperation in the past that there should have been and some of it has been built from traditions over the years. But I think the $700 million investment that we are now making in a unified policing structure can make a real difference and ensure not only that we have the personnel in the right place but also that there is a coordinated approach to dealing with the various issues.
I briefly refer again to a couple of the matters that were raised by Mr Bevis in his speech. The first was the issue that was highlighted in the Daily Telegraph today. We know that the Sydney newspapers—and, for that matter, others—search out isolated cases, where they can find them, where something has not gone as well as it should have. In this particular case the wide open gate that they were referring to was actually the access to a building site. The Qantas terminal is being upgraded and so a temporary but secure fence was provided to ensure that no-one could breach the airside areas of the airport, which naturally need to be kept safe. One mistake they did make was to fail to take down the sign that was outside the temporary fence. I understand that has now been done and so it will be clear to everyone where the secure area actually starts. But the people moving in and out did not have access to aircraft or the airside operations of Sydney airport.
I also refer again to the oft-made statement by the opposition about the role of Mick Palmer, Inspector of Transport Security, who is often referred to as ‘part time’. It would be fairer to say that he is an ‘on call’ officer who will be invited to undertake investigations and inquiries when there are particular issues which need to be addressed. He is currently undertaking some work, in cooperation with the states, on the issue of land transport security. That report and that work is going well. But if there is a significant issue associated with aviation security then we will ask him to do a report on that as well. He does not have some kind of an inspector-general overall supervisory role. That was never the intention and it was never what was envisaged when the office was created. I think he can play a useful role in bringing to the role his expertise and understanding of security issues for the benefit of the government and we look forward to being able to take up his advice and recommendations on issues of concern.
Airport security is important. People want to be able to travel with confidence. We in Australia are fortunate that we have been spared some of the appalling events that have occurred in other parts of the world. I cannot guarantee that there will not be an attack of some kind on Australia’s aviation system at some time in the future. The risk is currently assessed as medium and, in spite of everything that has happened in the United Kingdom over recent days, that risk has not changed. I am pleased that the UK and the US have both now lowered their own alert levels, so that means travel to and from those countries will be a little easier but still much harder than it is to and from a country like Australia.
We want to preserve our reputation of being a safe and secure place in which to holiday. We live in an insecure world. We live nearby and close to areas where appalling events have occurred so we cannot assume that we are immune from these sorts of problems. It is important that all Australians recognise that they also have a role in securing our country. Everyone needs to be an ‘eyes and ears’—to look out for any potential threat and be prepared to advise authorities on the 1800 number or someone close by whenever they see an issue of concern. I, therefore, do not mind when people come to me about issues or when they perceive that there may be a weak point in our security. In fact, I welcome that advice and the government seek to respond to it from time to time. Quite often, when we check the alleged claims, they cannot be substantiated.
This morning on Sunrise I was confronted with an example of a man who claimed he took some Stanley knives through Karratha Airport. On checking with Karratha Airport, we found that they have no record of it. We have asked the Roebourne Shire Council, who run the airport, and Qantas and they have no evidence of it. If he did so, he has committed an offence, so I can understand why he might not want to be identifying himself. But, where there are deficiencies, we need to know about them and we will seek to address them.
I know that no human being is perfect and no machine is perfect. Of course the terrorists keep trying to get one step ahead of the technology, and so we need to continue to make substantial advances. Our government has been active in funding the development of new security machinery and looking at new systems so that we can deal with issues which might arise in as effective a way as possible. What we do not really want is scaremongering causing unnecessary concerns when in fact the complaints lack substance. The reality is that we do enjoy a safe aviation system in Australia. It is as secure as any in the world—in fact we would say more secure than most in the world. We have put a substantial investment into a multilayered approach to security. A single-layered approach, once penetrated, would be shattered. But when you have a multiple approach where you are seeking to identify people of concern, monitor those who may give rise to incidents and put in place effective barriers such as checking systems and the like, you can have, layer upon layer, a system which will guarantee as much as humanly possible the secure passage of all passengers through our airports and into the international transport system. (Time expired)
In supporting the motion moved by the member for Brisbane, the opposition’s full-time spokesman on homeland security, aviation and transport security, I would reflect on the events last week in Britain. I ask: can anyone doubt that this is a portfolio area that requires the full-time attention of a senior minister? That is what Australia will have next year under a Beazley government. What do we see today in the House? The government’s case being put by the Minister for Transport and Regional Services, who is responsible for a whole range of transport and regional issues across Australia, from the protection of the sea to shipping levies to agricultural chemicals. He shares responsibility for security with the Attorney-General, who is responsible for everything from patents to bankruptcy law to saving Australia from the ‘spectre’ of same-sex marriage.
In any government that took its responsibility seriously, the Attorney-General would be a full-time job; transport and regional services would be a full-time job; and homeland security, including aviation security, would be a full-time job. Australia has never needed a European style interior ministry—for which in many ways we should be grateful. This is partly because in our federal system police and prisons are the responsibility of the states. But we live in a changed world—and we should be flexible and aware of some of those unwelcome changes due to terrorism. This involves new flexibility in attitudes of governments. This government has acted in many areas in response to security threats, and nearly always it has done so with the support of the opposition. Yet the inadequacies of our response in the area of aviation security are very glaring, as the member for Brisbane made clear. It seems obvious to me that the lack of a full-time minister in this area is partly to blame for those inadequacies.
The minister, in his response to the member for Brisbane, claimed that, for instance, in this particular incident in Sydney of the open gate referred to in the Daily Telegraph today there was no access to airside security. Minister, please go and speak to the officials at Mascot airport. I know that you are not listening now, but the people who read Hansard for you afterwards will be able to explain to you that in the previous two weeks there was an open gate which you could slide open and shut when you went into that building site about which you talked so knowledgeably in your speech. There was an open gate where any person could have breached the security of Mascot airport, our biggest airport, and could have passed through into a secure area. So it is not true to say that people did not have access to Sydney airport from that open gate at the building site of a new hangar; there was a sliding gate that people could open just two weeks ago.
Next month will mark the fifth anniversary of September 11—a day which still seems incomprehensible in its pure evil; a day which should have changed forever the way we think about aviation security. Last week’s events in London remind us that September 11 was not a one-off disaster, something that could not happen again in our lifetimes like the 2004 tsunami. It was a declaration of war by a ruthless enemy, an enemy who is still active and still thinking of new ways to attack us. We know that Australia is on its target list—something the two Bali bombings have made very clear.
In July last year the government appointed the Rt Hon. Sir John Wheeler, a former British Conservative MP and security minister in the Northern Ireland office, to conduct an inquiry into Australia’s aviation security system. Labor welcomed his appointment and we made a submission to the inquiry. Sir John and his team did an excellent job and reported to the government in September, nearly a year ago. The Wheeler report made a number of recommendations. The Prime Minister immediately announced, as if almost from the script of Yes, Prime Minister, that he accepted what he called ‘the thrust of the recommendations’. This was typically careful prime ministerial phrasing meaning that the government reserved the right not to accept any specific recommendations, just the thrust of the report. A year later we can see what this means in practice. The Wheeler report found a number of deficiencies in Australia’s aviation security system. I will give the House just a few quotes. First of all, the report said:
12. Policing at major airports in Australia is often inadequate and dysfunctional, and security systems are typically uncoordinated.
Another quote says:
18. The present Aviation Security Identification Card (ASIC) system has a number of weaknesses, and there is confusion as to what airport access an ASIC enables.
Another quote from the report of Sir John Wheeler says:
... in the current environment, consideration should be given to more comprehensive security control over regional flight passengers when arriving at major airports such as Sydney because of the risk to larger aircraft and facilities when passengers disembark at the apron.
The report continues:
25. While 80 per cent of Australia’s air cargo is carried on passenger aircraft, it is not all screened. It is clearly inconsistent for one category of aircraft user to be treated differently from another, thereby putting the safety of the aircraft in jeopardy.
These are all quotes from the report of government-appointed Sir John Wheeler. To use the Prime Minister’s terminology, the ‘thrust’ of the Wheeler report was that aviation security in Australia is inadequate and dysfunctional—mainly because of the overlapping jurisdictions and confused lines of responsibility. This is always a sign of weak leadership from the top. It was not Sir John Wheeler’s role to make recommendations about the structure of government, so let me once again make the obvious recommendation: Australia needs a single, full-time minister for homeland security—someone like the member for Brisbane—with undisputed authority over aviation security matters.
Australia also needs a full-time Inspector of Transport Security, a position currently occupied by former police commissioner Mick Palmer, from my home state of Victoria, when he has time to spare from his other duties at the moment. The opposition has been saying for over a year that Mr Palmer should be doing the job full time and that, if he is not available full time, someone should be found who is. Yesterday in question time, the minister said that Mr Palmer is not:
some kind of ‘el supremo’ who is in charge of all airport security in Australia.
… … …
It is not his role—
intoned the minister—
to take on some particular oversight of all of the transport security arrangements in Australia.
The obvious response to this is: why not? If Mr Palmer is the right man for the job, and the opposition agrees that he is, then he should be an ‘el supremo’ and he should indeed have oversight of all the transport security arrangements in Australia. We are still waiting for the government’s legislation giving the Office of the Inspector of Transport Security a statutory basis and giving the holder of this post real authority over the multitude of competing authorities.
Sir John Wheeler made 17 recommendations. Time does not allow me to go through them all, but let me say something about the more important ones. Wheeler recommended that the background checking process required to obtain and hold an aviation security identity card be further tightened and centralised in the Attorney-General’s Department and that this should be harmonised with maritime cards. The ASIC is becoming something of a scandal. The honourable member for Brisbane asked the minister yesterday about the reports that 384 of these cards, which give access to security sensitive areas of airports, have been lost or stolen. The minister did not deny the figure. As the member for Brisbane pointed out today, he simply replied by saying, ‘Well, people lose these cards all the time—they are like Parliament House passes.’ But holders of Parliament House passes, just as the member for Brisbane said, do not have to undergo criminal background checks. A lost or stolen ASIC is not just an inconvenience, Minister. It is a breach of security and it is potentially a threat to the lives of Australians. Doesn’t the minister watch TV? Doesn’t he realise that one of the suspects in the arrests over the weekend in London was an employee at Heathrow airport? Doesn’t he understand the parallels and the implications for the Australian people?
A stolen ASIC has great potential value to criminal elements as well, and the link between criminal activity at airports and security risk is something that Sir John Wheeler specifically commented on. Each one of those cards represents a real security breach. The minister said that 384 lost or stolen cards is a small number in relation to the total number of cards issued. Perhaps it is, but I do not find that reassuring when I think of 384 potential breaches of security at our major airports.
Wheeler also found that there are 188 authorities competent to issue an ASIC, that there is no single database of everyone who has been issued an ASIC and that there is no single set of criteria of eligibility for an ASIC. He noted:
... even at a single airport an applicant can be rejected by one employer and given an ASIC by another on the basis of the employer’s assessment of a criminal record.
In other words, airport employees are able to make subjective judgments about whether a person qualifies. Sir John also highlighted another fundamental weakness of the ASIC system when he noted that there was confusion between the function of the ASIC as a background checking process. He said:
Many take the ASIC card to be a general access card, rather than merely to be an indication that the holder has had a background check to enable potential entrance.
It does not follow that everyone who is qualified for an ASIC should have access to all security sensitive areas, as currently seems to be the assumption of some airports. There needs to be a much clearer definition of what an ASIC is and what it is for and tighter regulations on who is allowed to go where among the tens of thousands of people who are currently holders.
Let me conclude by saying something about regional airports. The Wheeler report noted that the great majority of Australian airports—in fact, 147—have no specific additional requirements beyond those imposed on all airports, such as protecting secure areas and having a transport security program. Screening of either passengers or property is not compulsory at these airports. We have four security teams for 140 airports. What a joke! The minister does not seem to understand that, in the case of the September 11 hijackers, the terrorists entered from a regional airport in Portland, Maine, and then got into Logan airport from where they began their monstrous task. This is the potential that he should remember when addressing insufficient security at regional airports. (Time expired)
I have listened carefully to the Australian Labor Party’s arguments. When it comes to terrorism they are weak, they are indecisive, there is a true lack of knowledge, there is a lack of leadership and there is a lack of commitment. Apart from that, they are doing a great job! What I would first like to discuss is their weakness in this area.
What I have seen since being a member of parliament is that every time terrorism or security or drug related issues come up the Labor Party enjoys ripping the guts out of the legislation to make it as weak as possible, even offering ridiculous suggestions. One of the classic ones I heard related to the telephone intercept legislation, which would help law enforcement agencies, in the case of terrorism or drug trafficking, by allowing police to tap the phones of a third party. One suggestion by a Labor Party member was that they should alert the person whose phone is to be intercepted so that they can notify their friends. That is the dumbest piece of security advice I have heard.
We can also look at what has happened recently. All last week’s migration bill—which the Labor Party opposed—was about was securing our borders. This government’s No. 1 responsibility is the protection of its citizens. The situation, which the Labor Party supported, of allowing people to be processed on Australian shores rather than offshore is obviously a worst-case scenario for our country’s security. From looking at the latest potential terrorist attacks in the United Kingdom, we can see that one of the persons charged was a mother. Therefore we have to get out of our heads that the only people who get involved in terrorist attacks are males. We have seen the same thing happen with suicide bombing attacks in Israel.
The Australian public also realise that one of our greatest strengths is the war against terrorism. In the latest Australian Newspoll for 14 to 16 July, Mr Howard’s total support for his way of handling national security and terrorism related issues was 56 per cent, Mr Beazley’s was 25 per cent and, going back to Latham’s days, it was 31 per cent. I have heard the member for Melbourne Ports and the member for Brisbane say that we need a minister in charge of homeland security. We have got that person: he is the Prime Minister of this country. His No. 1 priority is the security of this nation. He is doing a fantastic job.
I have also seen a number of issues raised today by the member for Brisbane with regard to the restricted area access. This was a construction site. It is not like we had people going there planning terrorist attacks. I do take the member’s point though—everything needs to be done to make sure we have the best security possible, but let us get real about it: this was not a life or death situation.
We should also look at the arguments about regional airports. We heard the Minister for Transport and Regional Services say today that only four per cent of travellers use regional airports. The cost of upgrading security would be in the vicinity of $400 million. I am not sure if the Labor Party is actually suggesting this—and this is what greatly interests me. If it is suggesting this, and if it is going to ignore intelligence—which is the way we should counter terrorism—it should also look at having police and major security at every train station and every bus stop. We all know that is totally impracticable; therefore, we must rely on the intelligence we are receiving.
Let us have a look at the figures on ASICs. It is reported that 380 ASICs are lost or missing. Obviously, we hate to see that happen, but more than 100,000 cards have been issued. We also have the position of Inspector of Transport Security. We cannot have only one person in this country with the overall responsibility of being on the ground all the time, and that is why we have spent $700 million to upgrade law enforcement agencies and to assist with Customs and the AFP. They are our people on the ground; they are the ones doing the hard yards.
To find out how crucially Labor looks at this issue, I looked through Hansard for the year that I have been a member. I believe the shadow minister for homeland security has asked questions only on aviation security, and that was in the last two days. If the Australian Labor Party want to get serious about aviation security they should get their act together and bring it to question time rather than some of the ridiculous questions they raise. It is vitally important that we make sure this is a major issue which is being addressed, and the Australian Labor Party need to get serious about it.
So what has the government done? The government has spent a lot of money on aviation security. The major thing we need to remember is that this is for risk based security outcomes. We have 187 airports in Australia, up from 38 under the previous regime, and the Australian government is working very hard to ensure that all security is upgraded. On international flights, 100 per cent of luggage is checked. That is contrary to the Australian Labor Party’s statement that that is not taking place. Since September 11, 2001, the government has invested $1.2 billion in additional aviation security measures. There have been 100,000 ASICs issued, with photo ID and police background checks. We have introduced a unified policing model at a cost of $800 million. ASIO funding has been doubled since September 11. There are air security officers on selected flights. There are hardened cockpit doors on all jet RPT aircraft of 30 seats or more. The Australian government used an expert, Sir John Wheeler, to look at our security measures.
I would like to see what would happen today if the Australian Labor Party were in charge of the federal government. First of all, we should look at what the state governments do when it comes to security. One of my biggest criticisms of the state Labor governments is the lack of data exchange—that is, police forces do not pass information from their databases to other states. We had the ridiculous situation of Cornelia Rau. She was a missing person in one state. Her correct name was checked in another state, but it did not match up. My greatest concern is having crazy situations like the high school teacher in Queensland who used false identification to purchase 53 kilograms of Powergel explosive—equivalent to 10 times what was used in the London bombings. It is the responsibility of the state Labor government to make sure that proper identification checks are done on people who buy chemicals and explosives and who receive a photo ID. In Melbourne and Sydney, in November last year, people were purchasing chemicals. With proper identification checks, the chemical manufacturers will be aware of these people and the police can immediately be notified. The police can then do a check and they may find that the person is connected to a terrorist organisation. At the same time, we will not have people using false identification to buy 53 kilograms of explosives.
That’s what happened in New South Wales originally.
I would love to see the member for Melbourne Ports tell Victorian Premier Steve Bracks that this is an absolutely urgent issue. Have a look at what happened in Jordan in 2004. Terrorists got hold of 20 tonnes of chemicals—enough to kill 100,000 people. You must go back and tell the Premier of Victoria to get his act together and share intelligence with other states on the CrimTrac database.
In the UK at the moment, 25 terrorist suspects are in custody under preventative detention legislation. When it comes to our preventative detention legislation, I have not heard the Labor Party say that we can hold a suspect in custody for 14 days. This was recommended by the states, but the Australian Federal Police and state police cannot ask one question of the terrorist suspects. That is an absolute disgrace. We need to have the interview clause removed and allow our law enforcement agencies to do their job. If the same thing happened in Victoria, or anywhere in Australia, our law enforcement agencies would only have 24 hours, under part 1C of the Crimes Act, before the person must be released. (Time expired)
I would like to speak to this matter of public importance, which is an issue that I have raised on a number of occasions before. I do not think the matters that have been raised on other occasions—up to three and four years ago—have been sufficiently addressed. I think the member for La Trobe gave an inkling—probably inadvertently—as to why some of the issues about regional airport security have not been addressed. He highlighted the amount of money that would be required to do that. I think he gave an estimate that it would cost something like $400 million to secure our airports from terrorist attack.
He also made the point, in terms of the Labor Party calling for a homeland security minister, that the Prime Minister was currently that, and that in his view he was doing a great job. He also said that the main focus of the Prime Minister’s job is—as it should be, and I do not vary from that—the security of the nation.
That brings me to my key point, which is that we seem to have an illogical way of determining which airports or which aircraft are possibly at risk. I have raised this issue a number of times. One time, I was given a briefing by the appropriate departmental people, which did not tell me much, on the risk assessment process applied to our airports. Essentially, the logic goes, as I understand it, that some airports or aircraft are more at risk than others. And when you ask about that risk assessment process—and I think the minister said of it today that it is constantly changing, and I do not disagree with that at all—obviously the answer comes back that, because it is about security, you cannot talk about the process.
What I can talk about, and what I think demonstrates the illogical approach to security at airports, is that I can board a 50-seat Dash 8 Qantas aircraft in Tamworth and carry virtually anything I like onto that aircraft. I proceed to Sydney, where I disembark from that aircraft and am screened going into Sydney. And then, on some occasions, I can board the very same 50-seater aircraft again and and have my luggage screened et cetera. The question is: why are different airports being treated differently? Why is the aircraft, the 50-seater aircraft that I—
Mr Forrest interjecting
The member for Mallee says there is no risk at Tamworth. I suppose he would say to the people in America, where some of the aircraft that carried out the September 11 atrocity came from some regional airports, that there was no risk to them. I sincerely hope—and I have a great respect for the member for Mallee—that those words that there is no risk at regional airports do not come back to haunt him.
The process, as I said, in my view is very illogical. Why is Sydney airport at risk when Tamworth and Wagga and other airports are not at risk? Who has determined that? And I think the member for La Trobe gave an inkling of the answer, as I said, today. It is not about risk assessment or potential risk. Obviously, a terrorist with half a brain, when he or she views the Australian scene and sees a number of airports with Dash 8 aircraft will see that some are screened and others are not. If that were the choice of weapon, obviously they would probably avail themselves of a hire car and drive to one of those places.
There seems to be this logic that it is only the big aircraft that can do damage. I do not believe that and I think history says that that is not necessarily the case. But it also says to me that these people, these murderers that are carrying on their activities around the world, will make choices based on the ease of access to ways and means of destroying Australian people and various pieces of infrastructure. They are probably more intelligent—more intelligent than some of us would think—than that they would all blunder into Sydney or Melbourne airports and be detected by some form of detection there and not even consider a regional airport. As the member for Mallee says, there is no risk, apparently, at regional airports! I sincerely hope it is on page 8 of the al-Qaeda handbook on terrorist attacks that regional airports are not at risk.
I think the government really has to look at this issue. The member for La Trobe talked about the money issue—that it would cost $400 million to secure our airports. Since the government has been in power—and I respect the government’s economic management, and the way in which it has been able to create surplus budgets et cetera—something like $33 billion has been returned to the taxpayer through tax cuts alone since 2001.
It is not a matter of whether there is enough money to be able to secure the airports. There are decisions made, on this very airy-fairy definition of risk assessment, that are in a sense financial decisions. It is expensive to do that. Everybody would agree with that; I would agree with that. But if it is expensive, why protect Sydney airport? If there is no risk, why protect Sydney airport? Why not have every airport in Australia treated the same? If we are going to protect some airports from terrorism, and if terrorism is deemed by the government to be a threat to this nation and the people who live within it and who we need to protect—and we heard the debate today about a gate left open and all the semantics that went on about whether that gate was open or not open—
It’s still open.
Irrespective of whether it was open or not, the whole debate was about the security of that gate and the possible impact on people. So there is obviously recognition within the government, and the opposition for that matter, that there is a threat to the Australian people from terrorist activity. If there is not, we should not have any protection at any of our airports. But the way in which it is structured at the moment, and the way in which people will look at our airports, is obviously that some airports are protected and others are not. They have similar aircraft on them, in many cases. Obviously, if there were a terrorist threat, people would be making their own determination as to where they were more likely to be caught.
A lot of people have argued about a range of matters in respect of security. I would like to offer a contribution from today’s Northern Daily Leader, which asked—as I am sure they have in many regional newspapers—whether security at our airports is up to scratch. Helen Green, from Tamworth, said:
No. Security needs to be tighter. We definitely need more security in country areas.
Andrea Fox, from Tamworth, said:
Yes, it is. If they (terrorists) want to get through, they will.
Jodie Thompson, from Quirindi, said:
Probably not generally speaking. It needs to be tighter.
Tania Kasch, from Kootingal, said:
No, I don’t think it is. If people can get on planes with nail files or knives, no.
Christina Tattam, from Tamworth, said:
In some ways, yes. There are areas that need to improve, though. I would like to see more security guards and more cameras.
Paul Kelly, from Narrabri, said:
No, I think there should be more security. You only have to look at what happened in London. Security at regional airports should be increased.
That is a bit of a snapshot of what real people are actually thinking about security. Obviously they recognise that there is a risk, because we are being told at government level and internationally that there is a risk. People who use regional airports would like to be treated as equal citizens to their city cousins, not as second-class citizens.
The discussion is concluded.
I present the report of the Selection Committee relating to the consideration of committee and delegation reports and private members’ business on Monday, 4 September 2006. The report will be printed in today’s Hansard and the items accorded priority for debate will be published in the Notice Paper for the next sitting.
The report read as follows—
Report relating to the consideration of committee and delegation reports and private Members’ business on Monday, 4 September 2006
Pursuant to standing order 222, the Selection Committee has determined the order of precedence and times to be allotted for consideration of committee and delegation reports and private Members’ business on Monday, 4 September 2006. The order of precedence and the allotments of time determined by the Committee are as follows:
COMMITTEE AND DELEGATION REPORTS
Presentation and statements
1 AUSTRALIAN PARLIAMENTARY DELEGATION VISIT TO MALAYSIA AND JAPAN
Report of the Australian Parliamentary Delegation to Malaysia and Japan
Malaysia—10 April to 17 April 2006, Japan—17 April to 22 April 2006
The Committee determined that statements on the report may be made —all statements to conclude by 12:40pm
Speech time limits —
Each Member —5 minutes.
[Minimum number of proposed Members speaking = 2 x 5 mins]
2 JOINT COMMITTEE OF PUBLIC ACCOUNTS AND AUDIT
Report 407: Review of Auditor-General’s Reports tabled between 18 January and 18 April 2005
The Committee determined that statements on the report may be made —all statements to conclude by 12:50pm
Speech time limits —
Each Member —5 minutes.
[Minimum number of proposed Members speaking = 2 x 5 mins]
3 PROCEDURE COMMITTEE
Learning from other Parliaments: study program 2006
The Committee determined that statements on the report may be made—all statements to conclude by 1:00pm
Speech time limits—
Each Member—5 minutes.
[Minimum number of proposed Members speaking = 2 x 5 mins]
4 STANDING COMMITTEE ON ENVIRONMENT AND HERITAGE
Review of Green Office Procurement Audit
Review of Audit Report No. 22, 2005-2006
Interim report—Inquiry into a Sustainability Charter
The Committee determined that statements on the report may be made—all statements to conclude by 1:10pm
Speech time limits—
Each Member—5 minutes.
[Minimum number of proposed Members speaking = 2 x 5 mins]
PRIVATE MEMBERS’ BUSINESS
Order of precedence
Notices
1 Mr Katter to present a Bill for an Act to amend the Fuel Quality Standards Act 2000 to regulate the amount of renewable fuel in motor vehicle fuel, and for related purposes. (Fuel Quality Standards (Renewable Content of Motor Vehicle Fuel) Amendment Bill 2006). (Notice given 10 August 2006.)
Presenter may speak for a period not exceeding 5 minutes —pursuant to standing order 41.
2 Mr Garrett to move:
That this House.
Time allotted —remaining private Members’ business time prior to 1.45 pm
Speech time limits —
Mover of motion —5 minutes.
First Government Member speaking —5 minutes.
[Minimum number of proposed Members speaking = 6 x 5 mins]
The Committee determined that consideration of this matter should continue on a future day.
3 Mr Baird to move:
That the House:
Time allotted —30 minutes.
Speech time limits —
Mover of motion —5 minutes.
First Opposition Member speaking —5 minutes.
[Minimum number of proposed Members speaking = 6 x 5 mins]
The Committee determined that consideration of this matter should continue on a future day.
4 Mr Georganas to move:
That this House condemn the Federal Government for:
Time allotted —remaining private Members’ business time.
Speech time limits —
Mover of motion —5 minutes.
First Government Member speaking —5 minutes.
[Minimum number of proposed Members speaking = 6 x 5 mins]
The Committee determined that consideration of this matter should continue on a future day.
by leave—I move:
That the bills be referred to the Main Committee for further consideration.
Question agreed to.
Debate resumed from 14 August, on motion by Mr Ian Macfarlane:
That this bill be now read a second time.
upon which Mr Martin Ferguson moved by way of amendment:
That all words after “That” be omitted with a view to substituting the following words: “whilst not declining to give the bill a second reading, the House:
The Petroleum Retail Legislation Repeal Bill 2006 repeals the Petroleum Marketing Franchise Act 1980 and the Petroleum Retail Marketing Sites Act 1980. These acts cover only part of the petroleum industry, with well over 50 per cent of the industry by volume of sales not covered by the current acts. The acts also discriminate between classes of business, large and small. In the small business sector, franchisees are advantaged over commission agents and independent operators. In the large business sector, Caltex and Shell are advantaged through their arrangements with supermarket chains over other larger companies such as Mobil and BP.
Immediately after these acts were repealed, the Minister for Industry, Tourism and Resources introduced a regulation under the Trade Practices Act 1974 to replace the retail protections provided under the repealed acts and to provide coverage of the whole petrol retail industry. The new regulation is an industry code to be known as the Trade Practices (Industry Codes-Oilcode) Regulations 2005. The Oilcode will provide better protections for and regulation of the petroleum retail sector than is the case currently. The Oilcode has been developed over a period of time. The current acts apply only to part of the industry. The acts have not prevented and indeed have encouraged the growth of retailing outside the acts’ ambit and the entry of supermarkets and independent import marketers into the industry. The acts have also restrained competition by limiting the ability of the majors to compete with retail operations.
It has been argued that the current legislation has advantaged small business franchisees over commission agents. The government sought to repeal this act back in 1998 but at that time it was unable to get support for a mandatory Oilcode and it would not proceed with the bill because the interested parties could not agree to an Oilcode. There has been a series of steps along the way to get to where we are today. In December 2004, the Minister for Industry, Tourism and Resources announced that the government intended to proceed with reform. The minister outlined components of the Oilcode, which will introduce a nationally consistent approach to terminal gate pricing. It is important to note that currently only Victoria and Western Australia regulate terminal gate pricing and set minimum standards for new fuel reselling arrangements, with greater coverage of different forms of agreement and dispute resolution.
In March 2005, following an industry roundtable, a number of changes were agreed to. The important issue was to ensure that the tenure of pre-Oilcode franchise agreements would continue to apply until they expired. Once this and a couple of other issues had been agreed to, the government was able to proceed. In April 2005, the department held an industry briefing on section 46 of the Trade Practices Act, and from there we have come to the legislation that is before us today. I may return to that a little later.
At the outset of my contribution to this debate, I want to make it very clear that I am supporting the amendment that moved by the member for Hunter. Australians are hurting as a result of high fuel prices, and the government’s inaction has done nothing to remedy the situation. It took the Prime Minister until yesterday to come into the parliament and make a very belated attempt to remedy the problem. There is no denial that high oil prices have contributed to the rise in petrol prices, but the government has been ignoring this looming disaster; it has not planned for a future where oil prices would increase, with a subsequent increase in the price of petrol at the bowser. It is nothing new. It did not happen yesterday. It was blatantly obvious for a long time that the price of petrol was going to increase.
It is interesting to note that government speakers—or should I say ‘government members’; I cannot see any government speakers in the chamber—are so uninterested in the price of fuel that only one government member has bothered to come into the chamber and speak on a piece of legislation that I think is of vital importance. If any evidence were needed to show that the government is arrogant and out of touch with the Australian people, this is it.
The people in the electorate that I represent in this parliament—the people who live in the Hunter and on the Central Coast of New South Wales—are very disturbed and worried about the increase in the price of petrol. When only one member from the government speaks on the legislation—and currently there are no government members in the House—it is evidence that the government is not that concerned about petrol prices. Government members say one thing to the media and their electorates but ignore the issue of high petrol prices when debating legislation on it in the parliament. I have to say that I am very disappointed.
The first thing that I believe the government needs to address is a long-term energy plan. The energy plan outlined by the Labor Party looks at the diversification of the Australian fuel industry so that, as a nation, we can become more self-sufficient.
I mentioned earlier that it was obvious for a long time that petrol prices were going to increase. One of the most obvious signals has been the conflict in Iraq, which the government involved us in. To a large extent, it has been responsible for the increase in the price of oil. We on this side of the House were very aware that the invasion of Iraq would impact on the price of petrol at the bowser. I am surprised that it took the Prime Minister until yesterday to seriously contemplate where we were going with fuel prices.
It is also very important to note that the supply of oil is finite. One day there will be no oil left. So, as a nation, we should be thinking about what we can put in its place to deal with the eventuality that our oil reserves will become depleted. To think that it has taken us until now to fiddle at the edges in dealing with an oil shortage is absolutely disgraceful. Our government needs to have a long-term perspective on energy. We need a viable, long-term energy plan. I implore the Prime Minister to go back to his statement of yesterday and take it further.
We on this side of the House were pleased that he embraced part of Labor’s blueprint. We were very pleased that he has taken up the issue of converting cars to LPG, but there are many people in Australia whom it will not help. I do not think the Prime Minister should stop there, because Australian families are struggling with the rising price of fuel. More than ever, our nation needs a federal government with a long-term strategy to reduce our dependency on overseas oil.
We need to be an independent country. We need to be independent in all things, and oil is one of those things that is a very pressing issue for us as a nation. Our independence there will remove us from the shackles of high overseas oil prices. It is very easy for the Prime Minister to come into this chamber and say that the price of petrol is high in Australia because of the price of oil overseas, that it is influenced by the global market. That is obvious to everyone.
We are saying that we need to remove ourselves and put in place a strategy to relieve the impact of that overseas oil market—to be independent, to stand on our own two feet. We must increase the use of Australian transport fuels and reduce our reliance on foreign oil. We also must develop and use fuels that will become cheaper in the future. Australians will not be able to afford to pay $5 or $10 at the bowser.
I know that the Prime Minister assured the Australian people that fuel prices will probably drop to $1.15 per litre, but I really cannot see how that will happen. I cannot see how any strategy that this government has put in place will lead to fuel prices falling to $1.15. I think it is much more likely that we will be paying $2 a litre by Christmas. I do not know how the Prime Minister is going to explain his rash promise to the Australian people.
We need some national leadership to develop existing alternatives like LPG, ethanol and biodiesel; emerging alternatives such as compressed natural gas, liquid fuel from gas and stored energy; and future fuels such as hydrogen. We need a government that looks to the future, embraces new technology and invests in research and development—invests in the future. We do not need a government that goes down the same track of supporting the tired old things of the past. We need a government of vision. We need a government that says, ‘No, Australia is not going to pay $5 a litre for petrol.’ We need a government that recognises our vulnerability and then puts in place strategies that are going to protect us from those external shocks. Australia needs to be much less reliant on foreign oil because not only is that affecting the price at the bowser; it is also affecting our trade deficit and foreign debt.
When we had the last interest rate rise, the Prime Minister was quite happy to blame our level of inflation on the price of petrol. He did throw in bananas as well—I cannot forget the bananas. When he blamed the price of petrol for the interest rate rise, why didn’t he decide to act immediately to make Australia independent and remove Australia from a situation where we are affected so greatly by external shocks? This is a Prime Minister who only acts when he is forced to act because he can see that it is going to have a detrimental effect at the ballot box. He is a reactionary Prime Minister, one who sits on his hands and does nothing until he is absolutely forced to do so.
I have brought with me today the statement that the Prime Minister made in this parliament yesterday. To say I was disappointed with it would be an understatement. He goes through and uses his—dare I say—weasel words to explain away the reason for the increasing petrol prices. Then he tacks in:
Since oil is a globally traded product, and Australia is a net importer of oil, there is no escaping the surge in oil prices.
Yes, there is, Mr Prime Minister. You can escape the surges in oil prices if you invest in Australian industries and try and make Australia a lot less dependent on imported oil. It would be good for Australia in a number of different ways. It would make us an independent nation. It would develop Australian industries. It would develop alternatives. It would be good for the environment. To be quite honest, I cannot see one argument against going down the track of standing on our own two feet and looking at alternatives.
We need to re-examine the depreciation regime for gas production infrastructure, and we need to allow selective use of flow-through share schemes for small operators. If they refer to the opposition’s blueprint No. 3 on Australian fuels, the government can get a number of good ideas about where they can go with their policy. They can look at making alternative fuel vehicles tariff free and at $2,000 off the price of hybrid cars. I really think we should be doing everything we can to encourage the research and development of hybrid cars, to see if we can make them not a rarity, not a curiosity, but rather something that is actually out there tackling the issues of high fuel prices and pollution. For hybrid cars to become a really viable alternative, the government need to work with state and local governments.
One of the failings of the Howard government is that they do not work with the states; they are more interested in blaming the states for everything that goes wrong. I think that the Prime Minister would be working in Australia’s interest if he actually sat down with the states and tried to look at some alternatives—giving city traffic and parking advantages to hybrid cars and examining the grants of tax rebates for converting. The government have done that. LPG is the part of our policy that they have embraced, and we congratulate them on doing that. We are happy to assist in any way we can with their policy development. A Beazley Labor government would conduct a feasibility study into a gas to liquid fuels plant in Australia—new technology, jobs for the future.
This government has failed the people of Australia in that it has led to increased fuel prices at the petrol pump. The bill before the House today is a bill that changes the Petroleum Retail Marketing Franchise Act 1980 and the Petroleum Retail Marketing Sites Act 1980. This government needs to embrace the amendment moved by the member for Batman and take on board the Labor Party’s ideas in this area. We do not mind. What we want is the best thing for Australia, and the best thing for Australia is for the government to adopt the Labor Party’s policy.
It was a good speech that my colleague the member for Shortland has just made looking at alternatives. It is interesting that only one government speaker has spoken in this debate on the Petroleum Retail Legislation Repeal Bill 2006. That is a bit of an indictment of what that side of the House thinks about petrol prices. I see that two members from Tasmania, the member for Bass and the member for Braddon, are not in here endeavouring to defend the price of petrol or even to speak about their bosses’ policy of yesterday when they stole the Labor Party’s policy and brought it in. They are not even keen to be in here to defend that or even to put that before the people. So they are failing to give representation to the people of northern Tasmania about the price of petrol.
As my colleagues who spoke previously have mentioned, the Petroleum Retail Marketing Sites Act 1980 and the Petroleum Retail Marketing Franchise Act 1980 are outdated and serve no useful purpose in today’s petrol retail industry. Well over 50 per cent of the industry by volume of sales is not covered by these acts, including the supermarket chains Coles and Woolworths, which makes the rules for market participation inconsistent and unfair. That is bad for the industry and bad for consumers. Therefore, they need to be replaced, but replaced with something that actually deals with the problems facing consumers today.
The proposed Oilcode will finally bring the whole industry into a common regulatory regime with better protections for market participants and better protections for consumers. It will also, for the first time, bring some protection to commission agents and independent operators who currently do not have access to low-cost dispute resolution. But Labor is determined to go further and make amendments to section 46 of the Trade Practices Act, which are necessary to address outstanding concerns about the potential for abuse of market power. This is the substance of the amendment being proposed by this side of the House.
There is no doubt that the cost of fuel is concerning many people throughout the nation, and I am only too aware of the impact that is being felt across the electorate of Lyons. The regional nature of communities means that relatively long distances are travelled as part of daily life. The amendment moved by the member for Batman puts responsibility fairly and squarely back in the lap of the government—a government that has lost the ability to look beyond today, to take their own advice on the future fuel needs of this great country—to fix what they have clearly ignored. This amendment calls on the government to ensure that the Department of Industry, Tourism and Resources works towards increasing the market penetration of ethanol, biodiesel, LPG and CNG, giving a real choice to consumers and helping to reduce our reliance on the foreign oil market. Part of this process will require a study into the feasibility of a gas to liquid fuel plant, which includes the investigation of financial concessions and allowances to encourage investment in research and development and the infrastructure required.
It also calls on the government to embrace Labor’s first blueprint to cut tariffs on alternative fuel vehicles, including hybrid cars, and provide tax rebates for converting petrol cars to LPG, which is where the government stole Labor’s policy yesterday and badged it as their own. LPG is the only widely available alternative fuel capable of halving the average weekly family fuel bill at the moment, here and now. The challenge will be to provide a real incentive to encourage more outlets to install delivery infrastructure, especially in regional areas, and to increase usage outside the major centres, which would in turn create more consumer confidence in LPG as an alternative fuel. The government’s announcement yesterday acknowledges this fact with their rebate for converting vehicles to run on LPG.
Clearly, a bigger stumbling block to introducing a new fuel is funding delivery infrastructure and gaining enough public support to convert or purchase vehicles capable of running on the alternative fuel during the early stages of introduction. This too was addressed in yesterday’s announcement, and it is about time too. It only takes 10 years to get this implemented, and it is Labor Party policy when it is done. Affordability of new technology is always going to be a difficult issue unless a real financial incentive is given for consumers to change. The amendment moved by the Labor Party paves the way for a reactive approach, paves the way for a responsible approach and gives ways for it to be achieved.
I have been approached by many of my constituents from across the electorate of Lyons who are concerned about their future. Many of them are people who have worked productive lives building the communities that they call home. Many of these communities do not have the services or major hospitals, banks or department stores that many of us are able to take for granted, and they accept, to some degree, that they will be required to travel some considerable distances to access these services, but never in their wildest dreams did they think that the cost of fuel would reach $1.50 a litre and that they would be $40 to $50 worse off every single time they filled up their fuel tank.
The fact is that fuel is taking food off the tables of the people who can least afford it. It does not matter whether I am talking about an average single pensioner or a family with four children: the cost of fuel is biting because the average amount of fuel required does not change that much, but the cost does. In any week, in any town, families are still driving the kids to school or to the school bus. They still have to do the shopping; they still need to pay the bills, to get to work and to take little Peter to the doctor.
Spare a thought for the delivery drivers who, through no fault of their own, have been contracted to deliver goods, from newspapers to shipping containers, at a set rate negotiated before fuel costs rose the best part of 50 per cent. Add these astonishing figures to the steadily rising interest rates, which will have a significant impact on business loans and overdrafts in the coming months, and remember them when their backs are against the wall of their economic future.
But this is not the end of the matter, as the impact of additional fuel costs begins to affect community services in all regions and centres. Volunteers who deliver meals on wheels; Lyons, Apex, Rotary clubs; sporting clubs; advocacy groups and even volunteer emergency services are at risk of losing valuable members simply because the cost burden is too great for people to be volunteers. To get there to be a volunteer is costing people a lot of money. The very people who fill the gaps required to build better communities are finding the going pretty tough, to say the least. How much longer this has to be endured will directly determine what services will survive into the future. This must be addressed by finding ways of getting alternative fuel supplies to the general population now. We certainly cannot afford to let the issue lie for another 10 years.
The amendment being proposed is a simple solution to a complex problem. It is not the complete answer; it is a start in the right direction. It provides a foundation, with processes to follow and targets to meet. The answers that come from the required reporting system will drive research and development and the roll-out of fuel alternatives as well as provide support for progressive vehicle technology to reach the marketplace. After all, there is not much use spending millions of dollars on R&D if the outcomes never see the light of day—if we never get to see the results of that in practical terms. This amendment is a simple solution, but that is not to say it will be an easy task to overcome the problem. The problem will not go away. We need to work smarter, not necessarily harder; and to do that we need achievable goals and a process of making it happen.
We have heard a lot about ethanol in the last three weeks. I support the blending of ethanol with petrol, but it needs to be done in an economic and sustainable manner. My good friend the member for New England has been a champion of this for a long time, and a man who takes his work representing the people of Australia and the people of his electorate very seriously. I have listened to his words over a long time now on this matter. And my colleague Mr Fitzgibbon spoke in the House last week. He reinforced the difficulty of mandating ethanol up to a 10 per cent blend at this present time and that the country simply does not have enough opportunity to produce enough ethanol to get to 10 per cent at the moment. So there has to be a heck of lot of work done to get production up to any level like 10 per cent.
There is a clear need to support further development of the ethanol production industry, and Labor showed foresight by presenting our plan for the future fuel requirements of this country before yesterday’s announcement. I know some years ago we had a pilot study in Tasmania with the sugar beet industry, looking at ethanol in farm tractors and other vehicles. So the opportunities for the rural sector are quite real when we start talking about ethanol production.
Biological ethanol production is quite simple, I understand, compared with other fuel refining methods, and there are a number of very good reasons to begin producing it on a large scale. The first and foremost reason is that it is quite literally home-grown fuel—it gives us some independence. The largest single use of ethanol is as a motor fuel and as a fuel additive. The largest national fuel ethanol industries exist in Brazil. I remember speaking to the Brazilian agriculture minister last year. I think the member for New England was there with me. The Brazilian ethanol industry is based on sugar cane. As of 2004 Brazil produced 14 billion litres annually, enough to replace about 40 per cent of their petrol demand. Also, as a result, they announced their independence from Middle East oil in April 2006. It is a pretty important milestone, I would think, in one’s country’s history when you can say that you have your energy and fuel at an independent level and you are not relying on a very unstable part of the world. I will say it again: Brazil announced their independence from Middle East oil in April 2006.
We are floundering in this country. Most new cars sold in Brazil are flexible-fuel vehicles that can run on ethanol, petrol or any blend of the two. In addition, all fuel sold in Brazil contains at least 25 per cent ethanol. Flexible-fuel vehicles are nothing new. Henry Ford was the first person to mass produce them, with the Model T, which was designed to run on an ethanol and turpentine blend. So it goes back a long way. As it turned out, the petroleum industry saw an opportunity and took it, creating an industry that we have struggled to escape or have some independence from ever since.
Yesterday we heard the Prime Minister, John Howard, address this House with all sorts of facts and figures claiming that the fuel tax in Australia is low by international standards, but he failed to mention why it is that other countries have higher fuel taxes or what relevance that has in comparison to our overall economy. He was simply playing with the figures in an attempt to take attention away from his inaction on alternative fuels. They certainly do not reduce the pain of paying for a commodity which is fast becoming a luxury.
Europe has alternative fuels such as biodiesel available to the general public. It is made from a variety of waste or unwanted oils which would otherwise have been disposed of in some other way. The fact that there is a cottage industry of backyard biodiesel manufacturers speaks volumes for the efficiency and cost-effectiveness of this fuel.
I cannot remember where I read it but I did read somewhere that, if nylon strands could be made twice as strong and twice as thin, we would reduce world consumption of oil by one-third. I cannot tell you if there is any truth to that statement, but it certainly provides some food for thought if nothing else. It highlights the fact that oil is used by more industries than just fuel producers.
I have taken a broadbrush approach to this question because we need to have the debate about petrol and its possible replacements if we are to make the various forms of energy available to the consumer. Petrol will not last forever and will continue to rise in price. We have to find alternative strategies and fuels, and we have to have a way of implementing them and putting them into our system. Being independent of other parts of the world is the way to go—home-grown fuel, home-grown processes.
I understand that natural gas in cars is an option for the future, but it needs R&D. I understand it might take 1½ hours to fill your car up with natural gas but you would probably run it on 20c a litre. Those are incredible savings, but how do we get there? We get there by having R&D and governments willing to chase a positive approach.
We have enormous amounts of natural gas in Australia, but we do not have a pipeline from the North West Shelf to the eastern seaboard of this country. Maybe it is time we started to think in that way. Maybe we should start to think about building some infrastructure that can really set this country up for this century. Where is the population? Of course, it is on the eastern seaboard.
We accept that the world market of oil dictates to us and we say that if we have anything else we are kidding ourselves because, if we ever had to go on the world price of oil, that would affect our economy. Of course it would, but if you have home-grown energy you can do that a lot better. If towards Christmas this year petrol gets to $2 a litre, which some commentators are talking about, that will mean a great deal of sadness for many people in Australia.
The Labor amendment gives us some opportunities and this government ought to be picking them up, like they picked up our policy yesterday and ran with it. They ought to be picking up the other amendments that we have put up here to give this country an opportunity to go forward and not give us another 10 years of doing nothing, of not backing R&D or moving us forward. I will be supporting the amendment by the member for Batman, and I certainly hope the House does.
Until he made his last few comments, I was about to say I agreed with much of what the member for Lyons had to say, but he spoiled it there at the end. This particular piece of legislation, the Petroleum Retail Legislation Repeal Bill 2006, was on the Notice Paper before that range of measures was announced by the Prime Minister yesterday. Yet this bill still goes a small way in one small measure towards trying to take some of the upward pressure off the price of petrol. This bill aims to do that by increasing competition by reducing the restrictions on competition in the petrol market, thus trying to put some downward pressure on prices at the margin. There is no doubt about it: motorists are feeling the pain of high petrol prices—whether they are parents driving their children to and from school or sporting events or to do the shopping, whether they are commuters travelling by car to and from work, whether they are small businesses using their motor vehicles as part of their work, or whether they are larger transport companies and are passing on the high cost of fuel to consumers purchasing their products and thus adding to inflation in this country. Whichever they are, there is no doubt that the higher fuel prices are causing significant pain throughout this country.
I didn’t see your name on the speakers list.
You flushed him out.
Let us be honest about it. The predominant reason for high petrol prices is the high cost of world crude oil prices. Over the last seven years, world oil prices have risen by 400 per cent from roughly $15 a barrel to $75 a barrel. We hear interjections, hyperbole and rhetoric from the other side. If they think they can do anything at all to bring down world crude oil prices, let us hear it. What will they do to reduce world demand for oil? What will they do to stimulate world production of oil? What would Labor have done to stop world prices rising 400 per cent from $15 a barrel to $75 a barrel? What would they have done? Can they pretend they would have done anything about world oil prices? The reality is—and Labor knows it—that by far the predominant factor driving petroleum prices is rising world oil prices driven by the rapidly increasing demand from the industrialisation of China and India in particular, and driven by the simple fact that supplies are limited.
Mr Adams interjecting
Order! The honourable member for Lyons has made his contribution.
Because of those limited supplies and the exponentially growing demand, world prices continue to rise. I might point out a couple of other things that are also important in this context. The dominant factor is crude oil prices—there is no doubt about that. The second significant factor driving petrol prices is the level of taxation. Let me point out the fact that, of the 30 OECD countries, Australia has the third lowest level of excise on fuel, the third lowest level of taxes on fuel. As a result, our prices are in fact the third lowest in the OECD. Yes, it is painful at $1.35, $1.40 or $1.45 a litre. But in most European countries it is in fact over $2 a litre. In some it is over $2.40 or $2.50 a litre.
I might point out that if it had not been for this government fuel prices would be higher, because in 2001 we removed the system of six-monthly indexation introduced by the Labor Party in 1983. If the Labor Party had their way—if we still had the tax regime that was introduced and operated by the Labor Party—fuel prices would be 8½c a litre dearer than they are now. It is because this government removed Labor’s system of automatic indexation that fuel prices in fact are not 8½c a litre dearer. So let us not hear any of this humbug and hypocrisy from the other side. The fact is Labor’s regime of taxes was a high-tax regime. This government has brought those taxes down. We have the third lowest level of taxation in the OECD.
If we want to talk about taxes—and it is not really my job to praise the Queensland government or indeed any state government—at least the Queensland government has an 8.4c a litre rebate on the GST that it gets on fuel. So Queensland motorists are paying less than motorists in every other state because the other state governments want to take every cent of GST that they can. At least the Queensland government is willing to hand some of that back.
This government has already introduced a number of measures in addition to the very significant one that I have just mentioned. In addition to abolishing Labor’s six-monthly system of indexation of fuel, we have introduced a number of other measures: expenditure on research and trials as to the suitability of biofuels, a $55 million concessional excise regime on biofuels and measures to assist us towards that target of 350 megalitres of biofuel by the year 2010. Interestingly in this context, the uproar from the other side, the strident opposition from the other side, when we tried to introduce ethanol—
Mr Burke interjecting
Hang on a minute, Member for Kingsford.
It’s Watson!
Yes, Member for Watson. I am talking about when we tried to introduce, a couple of years ago, ethanol. We had uproar from the other side about how unsafe it was, how outrageous this was, how it would ruin our engines and everything else. So do not give us your hypocrisy about being concerned!
Order! The honourable member knows that he should be addressing his remarks through the chair.
Mr Deputy Speaker, let not the opposition give us any of their humbug and hypocrisy about their ‘real concern’ about introducing biofuels. Their opposition is clearly on the public record.
I come to the third thing that we have done. We hear this rhetoric from the opposition about giving the ACCC real powers to monitor petrol prices. They already do that—3,600 sites around this country. They have the power. We have already had fines of $20 million for price fixing around the Ballarat region and just last year in fact there were almost half a million dollars in fines for two Brisbane service stations for price fixing. They were prosecuted under section 45 of the Trade Practices Act. So do not give us this nonsense, as we have heard from the other side, that the government has not been doing anything. We have been, in spite of the policies of the opposition and in spite of the opposition to some of these measures that we have heard from those in the Labor Party.
But the very significant thing is the quality initiatives announced by the Prime Minister yesterday to do more where we can. We cannot do anything about international prices and everyone, even the Labor Party in their rare moments of honesty, will admit this. But we can do something around the edges to try to take the pressure off prices. And yesterday’s package of $1.57 billion to be spent over the next eight years—that is, $1,570 million over the next eight years—has a range of measures to help where we can. The first one of these—the one I am very pleased with—is the subsidy of $677 million to assist the conversion of cars to LPG. We had already planned for a subsidy of $1,000 for new cars starting in five years time. We have brought that $1,000 subsidy forward to start immediately. As well, there will be a $2,000 subsidy for motorists who want to retrofit—that is, convert—their existing vehicles to LPG.
This has the potential for very significant savings because, as anyone knows, LPG generally retails for less than half the price of petroleum. For a motorist with a six-cylinder car doing about 20,000 kilometres a year, this would mean a saving, if their car were running on LPG, of around $1,600 a year or more than $30 a week. People doing more mileage, such as those in my electorate of Macquarie—people living in the Blue Mountains and people living on the Hawkesbury who often travel significant distances to work—would save more than that because they would be doing more miles. So this is a very positive measure. The cost of retrofitting is around $2,500 to $3,500 and up to $4,000. This subsidy of $2,000 will help a lot. It will significantly reduce the break-even time, from what might have been 18 months to two years, to probably less than a year. So a motorist, with the help of this subsidy converting—retrofitting—his or her vehicle to LPG, should be able to make enough savings to pay that off in less than a year.
I think this is a very positive measure. Certainly, it does not suit everyone—it does not suit everyone’s motoring needs, it does not suit every vehicle; I am advised that roughly 30 to 40 per cent of vehicles would be suitable for retrofitting—but it will help enormously those whose vehicles it suits. It gives another option and it shows that this government is serious—and serious to the extent of $677 million—in trying to take the pain off motorists where we possibly can. There are also other, environmental benefits—an estimate of about 15 per cent fewer greenhouse gas emissions from the use of LPG.. That is significant. There will be fewer toxic pollutants that come with petroleum. The other very obvious benefit is that it will reduce, albeit at the margins, our dependence on oil and petroleum imports. We are a net exporter of LPG. We produce just over three million tonnes a year and we consume about two million tonnes. By going down this path we will also reduce our reliance on imports. So it is a win for motorists, it is a win for the environment and it is a win for our current account deficit.
What do we hear from the other side? Just carping and rhetoric, instead of getting behind this very positive measure. The Prime Minister announced a couple of other measures yesterday that are also very important—$17.2 million over the next three years to encourage service stations to take up the challenge of increasing the availability of E10 fuels. That is, $10,000 up front for those service stations which are willing to convert their service stations to provide E10—that is, ethanol blended fuel—and, if they then meet particular targets of sales of ethanol blended fuels, another $10,000 to assist them in that. That is a very real incentive to help rapidly spread the availability of ethanol blended E10 fuels. Again, that is a very positive measure.
The third measure announced yesterday was the extension of the Renewable Remote Power Generation Program—that is, to take the pressure off those remote communities that are dependent on diesel for their power generation. With diesel prices rising rapidly in recent years, there is much greater expense and pain for those remote communities trying to generate their own power. Again, this measure of $123.5 million, over the next four years, to take up alternative energy sources—wind power, solar et cetera—will help take the pressure off some of those remote communities.
The fourth measure announced yesterday increased support for exploration—an extra $76.4 million over the next five years to Geoscience Australia for their offshore seismic exploration program to try to find other sources of petroleum and indeed natural gas. In addition, there will be another $58.9 million over the next five years for onshore exploration. In all, there is a lot of extra money for exploration to try to increase Australia’s self-sufficiency and reduce our dependence on petroleum imports.
The fifth measure, and by no means least, is a much greater focus on examining alternative sources of fuel—exploring geothermal options; gas to liquid research, which offers enormous scope, given Australia’s abundance of natural gas; and coal to liquid research et cetera. This very substantial package of $1.57 billion over the next eight years goes a very long way towards addressing the pain that motorists are feeling as a result of high petrol prices. We cannot do anything about soaring world oil prices. As I have said, they have increased from $15 a barrel to $75 a barrel in just the last seven years. World oil prices have risen by almost 17 per cent just in the last 12 months. Those world market supply and demand forces will no doubt continue to put rising pressure on world oil prices. We cannot do anything about that, despite the rhetoric that we hear a little from the opposition.
We can help where it is possible and these measures announced yesterday are, admittedly, around the margins, but they are serious measures by the government to try to reduce the pain being felt by motorists. I commend these proposals put by the government. I am sure that they will help substantially by creating extra options for our motorists. It is disappointing to hear the other side criticising for criticism’s sake, with their typical negativity. They ought to be getting behind the government’s measures in supporting us in trying to reduce the pressure of rising fuel prices in this country.
I am pleased to see that another member of the government has spoken on this very important legislation, the Petroleum Retail Legislation Repeal Bill 2006, particularly given the announcement made yesterday by the Prime Minister. The member for Macquarie made some important points. I think a number of things in the announcement are positive, but he made the point that they are fiddling around the edges and we are not—
I did not say ‘fiddling’.
Well, you said ‘around the edges’ twice. On the second occasion I think you said ‘around the fringes’. That, plus the Special Minister of State’s response in the chamber today to a letter from the member for Throsby, shows that the government has not thought through the processes that were announced yesterday. This is policy that is being made very much on the run. I think it is commendable that we do encourage the use of liquid petroleum gas in our vehicles. It was commendable some years ago when about one million Australians converted to LPG, because there was no tax imposed on LPG for use in motor vehicles.
Last year the government changed that and as of, I think, 2012 there will be an excise, based on energy equivalents of, I think, 12c a litre imposed on LPG.. I raise that issue for a number of reasons. The Prime Minister made some statements yesterday that he thought about 300,000 people would actually take on board LPG because of cheaper operating costs, even though they were going to have some capital outlay—a subsidised outlay, nonetheless, but some form of capital outlay.
The motorists that I talked to—and I had people in my office some months ago, before it was even proposed that there be a subsidy to encourage people to have vehicles fitted for LPG—were concerned about the changes in the tax regime coming along. They were concerned about the price rise in LPG, which was tied to the petroleum price rise. They were concerned about the profit taking of the fuel companies themselves and the lack of surveillance in profit gouging that was occurring. So there is concern out there that if they do invest in LPG it may be good at the moment and it may have all those environmental benefits—and I am sure it does—that the member for Macquarie spoke about but the government can change the rules. It has done that in the past. It has gone from no excise to 12c a litre excise. It can reverse that or it can double it. Are people going to trust the administration in terms of the government’s thirst for energy taxation? Are they going to trust the fuel companies, who are going to be in control of the outlets for LPG? The fuel companies have strangled—with the government’s assistance and the Labor Party’s assistance—the ethanol industry and the biodiesel industry in Australia because they have control of the outlets. There is more than enough money for potential investment in and bankrolling of ethanol plants and biodiesel plants if the fuel companies take on what is called offtake arrangements from those producers. Part of what happened yesterday is really window dressing or, as the member for Macquarie said, addressing the edges of the problem, to buy time for the fuel companies to move away from the call that is being made by many in this parliament—and I am pleased to see that there are members on both sides of this parliament now starting to make this call—for a mandate in the use of E10 ethanol in our vehicles.
As I mentioned the other day, I have just returned from a visit to the United States, where I visited 10 ethanol plants and some biodiesel plants. I saw the very positive attitude that there is in America. There is a positive attitude from the policymakers, who are recognising that they cannot depend any longer on the Middle East and on other parts of the world for their energy needs and that they have to look at alternatives. Some states—California, for instance—have had an environmental requirement for the carcinogenic discharges and the fine particle emissions from modern engines. Because of the impact on the health of their communities they have had to look at other ways of oxygenating fuel and keeping the octane rating up et cetera that is less dangerous to human health. So the Americans—at a policy level; at a state level, where they have mandated; and at a federal level, where they have put in place some restrictions for Brazilian imports—have encouraged an industry to develop to the stage where there are 106 ethanol plants in production in America at the moment, and 60 million tonnes of corn out of a total production of about 285 million tonnes of corn is now going into energy for their citizens rather than the corrupt food market which we here all know only too well from Australia’s involvement in the wheat market.
So the announcement yesterday, welcome as it is, still faces a degree of scepticism within the community. What price will the fuel companies set? There are no restrictions on the fuel companies. They will in fact have some degree of control over these people who are converting to LPG because they will have made a capital investment and they will feel obliged to use it. There could be price manipulation to take advantage of those people. The other issue is policy change to the taxation regime, and we have seen that in the past. The member for Lyons mentioned compressed natural gas, and I think that is something that really does need to be looked at. I understand that there are some problems. But it is cheap, it is combustible and it will burn in modern engines—although I know that there are some modifications that need to take place. If we are looking at the longer term and the comparative advantages that this nation has, we have to look at natural gas as a potential energy source for the future.
To avoid a mandate with the growing pressure on fuel prices, two of the fuel companies, BP and Caltex, announced last week a drop of 3c a litre in E10 fuel. Yesterday there was some encouragement from the government for an opening up of bowsers. I have been putting E10 fuel into my vehicle for about six years now. I obtain my fuel from a small community near Tamworth. I happened to call in there the other day, the day after that Caltex press release came out saying that they were dropping the price of E10 fuels by 3c. I spoke to my reseller, who is one of those people who has been promoting this in a small way for a long time. He has not been there only since it became fashionable; he has been selling Bogas E10 fuel for six or seven years, and I have been buying it from him for that period of time as well. He was a little annoyed because the day after Caltex dropped or discounted their price—and there are some semantics here about the price they are actually dropping—and put out a favourable press release about the government, saying, ‘This hasn’t happened because of the threat of mandating; it’s happened because of incentives by the government,’ which gave away the real thoughts in the fuel companies’ minds, who have gone into this gimmickry so that the government will not force them to use E10, the wholesale price of E10 fuel to my reseller went up 1.8c per litre. So, when everybody is lauding the fact that now ethanol is going to be available across the nation, that it will be coming out of every bowser that has ever existed, people who have been reselling that product for many years are being penalised—and there are some similarities between this bill we are talking about today, the Petroleum Retail Legislation Repeal Bill 2006, which will repeal the Petroleum Retail Marketing Franchise Act and the Petroleum Retail Marketing Sites Act, and the impact on the smaller independent operators, the fuel distributors and their relationships with the major companies.
I bring that point to the attention of the House because I think it does show that a number of things need addressing. If we are serious about fuel pricing and price gouging, we have to start looking at the terminal gate price. I know that Western Australia does, and I think one other state has a better way of administering or keeping a degree of surveillance on prices. My information is that the ACCC does not do much, if anything, in terms of terminal gate pricing and wholesale pricing, because there are a whole range of inconsistent messages coming from the fuel companies themselves. We heard the other day that there is going to be a discount. People assumed that that was a price drop. That discount could be removed next week or in a month’s time. When the heat is off this issue, that discount could be removed.
On the broader issue of taxation receipts and energy, I would like to suggest to the government that the addiction to fuel as a source of revenue is something that we should look at. I am very pleased that the member for Aston is at the table, because I have regard for some of his economic thoughts from time to time. I am sure he would agree that the taxing of a comparative advantage in terms of a nation’s capacity to trade internationally and be an effective economy—the taxing of energy—under the guise that it is to be used as a rationing instrument so that you can reduce consumption is something that we should start to review.
Some years ago, before I was in this parliament, when the GST was originally discussed—I was privately a supporter of the GST—I think a member of the cabinet, whom I will not name, suggested that the excise on fuel be removed totally and that the GST be increased slightly to take account of the revenue loss. In these times, when energy is so important—as the member for Macquarie said, not only in terms of transport for individuals but in terms of our comparative advantage as a trading nation—it is all very well to say we are the third lowest in the world, but 40 per cent of the petrol price is tax. To suggest that that is good economic policy or good taxation policy is a nonsense. In the next breath we will have people—I think the trade minister must be overseas today; he is not in the chamber—trying to deal with others overseas with respect to level playing fields and achieving access and advantage for our product. We are trying to keep the manufacturing industry in Australia alive under possible threat from the Chinese free trade agreement and the Indian free trade agreement. All these things are happening when we are tying our own people to the floor. Some people say, ‘For some businesses it is a cost; they can write it off their tax or they can get a rebate.’ Some of them do; some of them do not. For a modern economy to have energy as a revenue source is quite wrong. I think the Americans are starting to see that.
The other day in a matter of public importance the member for Page accused the Americans of entering into a subsidised existence for ethanol and renewable fuels. To suggest that the oil market is some sort of pure market is an obvious joke. When I was in America, many Americans, particularly those in the renewable fuel business, were saying that the Iraqi war was a subsidy of the fuel industry and that it was, in a sense, a protective arrangement for the energy assets of the capitalist world. People would argue about that, but those arguments have to be of some significance. The Americans have moved on. The Europeans have moved on. In Europe now the biodiesel market has exploded. It is having an impact on the world canola oil and vegetable oil prices, on the renewable oil price.
People ask, ‘Why are the Europeans subsidising these things?’ With the uncertainties in the world at the moment, you only have to look at what the Europeans went through in the Second World War. They thought they were self-sufficient in food. The reality was something quite different. We now argue that they subsidise their farm community and we put them down because, in our eyes, they will never run out of food again. They thought that before the Second World War. In that sense, they have protected themselves. The Europeans and the Americans have moved on. As the member for Lyons said earlier, in a matter of 12 or 15 years the Brazilians have moved from a situation of being 80 per cent dependent on imported oil product for their energy to being 100 per cent self-sufficient. They have done most of that through renewable energy, through the fermentation of sugar starches into ethanol.
So there is enormous capacity to play a role in this debate. I would encourage all members of this House not to give up on this. Do not just sell the peripheral and argue that you have cured the problem, because you have not. The other day, the member for Page said words to the effect—I do not want to verbal him—that it would be impossible to produce a mandated 10 per cent. When you do the numbers, you find that 10 per cent is equivalent to about six million tonnes of grain. We produce about 30 million tonnes of grain in Australia. Ten per cent of that would be six million tonnes or about two-thirds of the sugar production. It is quite possible, quite easy over a period of time—four or five or six years or whatever—to produce a mandated 10 per cent. The only member of a party that I hear who is really serious about this—I know the Independent members are serious about it—is the National Party’s Senator Barnaby Joyce, and I give him credit for that. I have no doubt that he is serious about his views on this issue and the impact it has on regional communities and the impact it could have on agriculture generally.
Another issue we do not look at seriously is Australia’s very high rate of nitrogen use—again, that is oil driven and the price has skyrocketed. We use it not only to achieve yield but also to achieve a protein level that gives a premium in the global wheat market. With ethanol production, in which you do not need high protein in the grain, we could see a reduction in the use of nitrogen fertilisers and a complete change in the breeds of wheat. We would be breeding wheat for starch production. Feed wheats, which are poorer in protein, have a higher starch content, and that is exactly what the fermentation of starch process is looking for.
I encourage the government to look at a number of these issues. Do not give up and trivialise this issue. It is too important not only for the individuals who drive cars and the businesses that rely on petrol, diesel et cetera as an energy source but also for our capacity to be independent of others for our energy needs into the future. I encourage all members of the House, whether they be in the government or the opposition, to get serious about renewable energy. Stop looking for the negatives. Look at what other countries are doing with their own energy resource security. Look at the problems we are having globally with oil in particular and start to put in place policies that are going to do something about it.
I am very pleased to follow the member for New England, and I indicate to him that the Australian Labor Party is certainly taking renewable energy and renewable fuels seriously. I want to speak on the Petroleum Retail Legislation Repeal Bill 2006 and the amendment moved by the member for Batman, which points out exactly what Labor’s plans have been. In the statement made by the Prime Minister yesterday it was as if, as he indicated to the parliament last Thursday, he had read Kim Beazley’s Aussie fuels blueprint. He decided to adopt bits of it, but he should have adopted the lot. We have had a half-baked response to the crisis being faced by Australian families who are battling to pay their petrol bills.
That blueprint outlined a number of programs. It outlined the fact that a Labor government will re-examine the depreciation regime for gas production infrastructure; allow the selective use of flow-through share schemes for smaller operators; allow the selective use of flow-through share schemes in the gas, oil and mineral exploration industry; make alternative fuel vehicles tariff free, cutting up to $2,000 from the price of current hybrid cars; work with state and local government to give city traffic and parking advantages for these vehicles; examine the granting of tax rebates for converting petrol cars to LPG; conduct a feasibility study into a gas to liquids fuels plant in Australia; offer petroleum resources rent tax incentives for developers of gas fields which provide resources for gas to liquid fuels projects; examine a new infrastructure investment allowance for investment in Australian gas to liquids infrastructure; develop a targeted funding scheme for research and development in this area; work with industry to improve engine design and fuel quality standards; ease regulation of biodiesel production on farms; and encourage a sustainable ethanol industry. It is a very comprehensive plan to address these issues.
But the Leader of the Opposition, Kim Beazley, went one step further. I was very pleased to be with him on 7 March 2006 when he launched Labor’s blueprint No. 6, ‘Protecting Australia from the threat of climate change’. That blueprint contained Labor’s green car challenge to industry. It started from the fact that 18 per cent of new cars in Australia are bought by federal, state or local government. It stated very clearly that, if the Australian car industry could build a competitive, value-for-money green car, a federal Labor government would put it in the Commonwealth fleet. As Kim Beazley put it: ‘You build it; we’ll drive it.’ It was a very simple proposition using 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 not only ensures good outcomes for the environment and lower fuel bills for Australian families but also ensures good outcomes for the Australian economy and Australian jobs.
It is a fact that Australia has, by and large, produced six-cylinder cars that are powered by petrol. The world has moved on. The world is very much diversifying its motor vehicle production and use. That is why Labor’s green car challenge is so important. It is a great example of Labor leading the way in innovation. It has the support of the Australian Manufacturing Workers Union, which covers the workforce in the motor vehicle industry. They know that, if you stand still while the rest of the world is moving forward, you get left behind. Yet here we have a failure by the Commonwealth government to do anything about this issue.
Having an Australian-made car that is cheaper to run and cheaper to buy simply makes sense. Have a look at the figures on the waiting lists to buy hybrid cars in this country, and at what has occurred in the United States car market. The biggest increase in sales there last year was for the Toyota Prius, a hybrid car. Even in the United States, known as the gas-guzzling capital of the world, they are turning towards these forms of vehicles.
We need to encourage that innovation, and Labor’s green car challenge would certainly do that. As Kim indicated in that speech, we also would work with the states and private fleets to guarantee that there was a market for those Australian cars that could meet cutting-edge environmental standards. So, on the one hand, you have Labor putting forward a comprehensive plan on fuels and a plan for a domestic green car. What do you have on the other hand?
My colleague, the member for Throsby, the shadow parliamentary secretary for the environment, wrote to the Special Minister of State about her own car: could her car, when it was renewed, be one which was converted to LPG fuel? And just one month ago the member for Throsby, Jennie George, got a very disappointing response indeed from the minister. The minister said in that letter dated 13 July 2006:
Further, cost benefits are only achieved in most cases where vehicle travel is in excess of 50,000km, and this is outside the standard usage pattern of the Commonwealth’s fleet.
In addition, mandating the use of LPG fuel for all Australian Government vehicles would be inconsistent with the Australian Government’s recent support of the use of ethanol-blended fuels and be contrary to existing industry development initiatives, due to the limited number of vehicle manufacturers offering LPG powered vehicles.
That was the response of the minister to the member for Throsby’s suggestion that the Commonwealth use its position in procuring vehicles—using industry policy, essentially—to make sure that the Commonwealth fleet was powered by LPG fuel. That was the practical suggestion put forward by the member for Throsby and rejected by the Special Minister of State.
That stands in stark contrast to the Prime Minister’s statement of yesterday. Yesterday, he spoke about LPG and how important LPG was for the future of the Australian economy and of Australian fuels. And that contradiction, I think, led to a very sorry performance in question time today, where the minister, inexplicably, continued to dig a hole further and further into the ground. He should have just said, ‘I made a mistake; we’ve changed our policy,’ and sat down. But we did not have that at all.
He was digging for oil.
Mr Dutton interjecting
The Assistant Treasurer has worked out a strategy; he just does not turn up for question time when we are going to ask him the first question—a very sensible strategy by the Assistant Treasurer indeed, and one he has stuck to since, because on these issues Labor is leading the way. We simply cannot allow a situation where we continue to have Australia being reliant upon Middle East oil. We have Labor leading the way because we need good industry policy, not just for the economy but for the environment. And when it comes to the use of biofuels, I want to indicate, as the shadow environment minister, that I am very supportive of an increase in biofuel use in Australia, in particular an increase in ethanol production.
There has been enormous loss of opportunity when it comes to the energy debate. We have a government that is obsessed with making small measures, taking some of Labor’s policy; a government that is obsessed with its nuclear fantasy for Australia. Yet, at the same time, it is ignoring the opportunities for Australia to be the Silicon Valley of the solar industry.
I conclude by calling on the government to revisit its decision to shut down the Photovoltaic Rebate Program which ends on 1 July next year, a program which has been well received. It allows a rebate of up to $4,000 for a solar energy system to be placed on a rooftop. Solar PV has grown by 40 per cent globally over the past five years but by only 16 per cent in Australia. When it comes to energy policy, we need support for the renewable energy industry. I commend the amendment to the House.
When I put my name down to speak on the Petroleum Retail Legislation Repeal Bill 2006, there had not been statements by the Prime Minister or the Leader of the Opposition with regard to challenges for our energy industry. But it is good to see that the Prime Minister has, belatedly, responded to the petrol price crisis and—I guess precipitated by a backbench revolt—made some announcements, paltry though they are, on this matter. It seems important to every driver of every vehicle that goes through my electorate, so it is nice to see that, eventually, it became important enough for the Prime Minister to spend one half-hour considering the future of our industry in this nation. I welcome that effort. However, as the member for Grayndler and others have said, it certainly has fallen short in properly attending to the problems associated with our needs in this area.
Further, it was lifted from Labor Party announcements that were made last year and repeated throughout the course of this year. It certainly worries the opposition and, indeed, it should worry every person in this nation that this government takes so long to respond to matters of such urgency. It should concern the Australian nation that this government is so out of puff and out of touch that it has not considered these matters properly.
Mr Deputy Speaker Barresi, I congratulate you on being elevated to the important position of chairing the IR task force and I will be happy to talk with you about that at another date. It is good to see the government responding to the important issues and the adverse effects that Work Choices have already resulted and will result in. I look forward to our engagement on those matters—a bit of catch-up there also for the government.
Getting back to the particular bill before us, the Petroleum Retail Legislation Repeal Bill 2006 should have been introduced into the House some time ago. As the member for Batman rightly asserted, never has reform of the petrol retail industry been needed so urgently. The Petroleum Retail Marketing Sites Act 1980 and the Petroleum Retail Marketing Franchise Act 1980 are no longer appropriate in today’s environment. Well over half the industry by volume of sales is not covered by current legislation, and that includes the retail stores Coles and Woolworths. Clearly, the rules of market participants are not providing the necessary competition, which in the end hurts consumers. 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, reforms should also include—this was mentioned by the member for Batman—amendments to section 46 of the Trade Practices Act in order to attend to the potential for abuse of market power.
Unfortunately, this government has been stagnant in reforming this industry. This failure to reform has produced chickens—and they have come home to roost. I mention chickens, but I do not want to go any further than using it as a metaphor; I know that it has been used in recent days in this House to refer to the Treasurer. However, I think it is important to note the government’s long-time failure to respond to this industry. Let us not forget how long this government has been in power. Having entered its 11th year in power, this government cannot continue to blame its predecessors on matters of public policy. It seems to want to try to blame or to shift the blame to others, its predecessors, even though it is now into its fourth term.
Therefore, I would ask the government to start to take some responsibility. It should start to realise that it has been in power for more than a decade. It should accept that these matters have to be resolved by the government of the day—and, of course, as soon as possible. One of the problems we have is that the government has left it for so long to respond to these problems that we now have a crisis in petrol prices, which places unbearable burdens upon ordinary families.
I know that in my electorate many households are under enormous strain. Families are experiencing difficulties in using their vehicle to go to work and then using it to drop their kids off at school and at sporting events. In no way has the requirement to use the car diminished but, because of the price hike in petrol, people are facing real difficulties in meeting their ordinary day-to-day family obligations. I consider, first and foremost, that a government that is in touch with the electors, the people who voted it into power, should attend to the need of looking after the basic requirements of families—and that certainly is not happening with these price hikes.
That is not to say that these hikes were not foreseen. We have seen a gradual increase in petrol prices. We have seen a few occasions when very high spikes have occurred in the price of petrol. I accept that the government does not have full control over this situation and that there are external factors that help to determine the price of petrol. But certain things that are within the reach of government have not been implemented by the Howard government—and that is the failure.
Combined with the increase in petrol prices, which is causing an enormous burden on family budgets, there is the increase in interest rates. For a member of a family living in Caroline Springs in western Melbourne, a very fast-growing community—a very good community, I might add—wanting to get their kids off to school and then to get to work by either going back towards the city or heading towards Geelong or to other parts of west or north-west Melbourne, these concurrent increases both to mortgages and to petrol prices have caused enormous distress. By the way, these increases have already eaten up the tax cuts that were announced on last budget night, so effectively very little relief at all is now being felt. In fact, people at the very high end of the income scale may still be doing reasonably well or be doing okay because they received the much greater proportion of tax relief. However, 90 per cent of householders in my electorate received only a paltry sum, and the additional expense from the interest rate rises and petrol price hikes has certainly gone well beyond any amount they may have received in the form of tax relief as a result of that budget decision.
Clearly, there is a real failure of economic policy by the government in attending to these needs. Remember, that is coming off the back of an election campaign, when the Prime Minister looked the television camera straight in the eye—he looked at every Australian voter—and said, ‘I will keep interest rates down,’ and effectively implied that he would keep them down for as long as he was Prime Minister. We can see from the advertisements as well that he played loose with the truth by effectively saying he would keep them at record lows.
Let us remember that, firstly, there have been three interest rate increases since the Prime Minister’s government was returned. So there is already a failure to fulfil his promise. I am sure even the Prime Minister would not try to call interest rate promises noncore. I reckon he would have a hard time actually describing interest rate rises as non-core promises. He could give it a go because he has done it with other matters. We know that he quite happily disqualifies promises after the event when he fails to comply with those promises, but I do not think anyone will accept that three interest rate rises are anything other than a reneging of a commitment to the Australian people that he would not place pressure on the family home.
I do not want to distress people unduly and I do not want to create unnecessary alarm, but it will get to a point—and I see the Assistant Treasurer is at the table, and he knows this—where in certain parts of Brisbane, where the Assistant Treasurer resides, and Melbourne, where you reside, Mr Deputy Speaker Barresi, where the member for Watson resides in Sydney and indeed where I reside in Melbourne banks will foreclose and people may have to consider selling their homes. That is an awful thing. That is a dreadful thing to contemplate. If we look at the combination of petrol price increases cutting into the family budget combined with the increase in interest rates—we now know that a higher proportion of the household income is paying back the interest rates on the mortgage than was the case in 1991; we know there is now a higher proportion of household income being spent on just servicing the interest on the household home—we know that we have major problems. And the government has not attended to those problems.
The way the government has chosen to respond to the petrol prices is too little too late. But I guess you have to start somewhere. As the Leader of the Opposition said in his response, we welcome any relief. If it is stealing our ideas, we do not care. We think it is a sign of a good opposition when the government has no ideas of its own and it takes ours. We will happily accept that, because we do not care whether they are ours or the government’s, as long as they are being used to alleviate the problems associated with the burdens due to the petrol increases and the other associated increases to which I refer.
That is why there has to be a change to the way in which we use energy. We have to move away from a reliance on particular sources of energy, particularly Middle Eastern oil. It seems to be now that there should have been more done to look at the way in which we would remove ourselves from areas which are not stable and cannot provide stable sources of fuel. The member for Batman, the Leader of the Opposition and others have referred to the need to look at other sources and new technologies. Indeed, the Leader of the Opposition, in a blueprint speech last year—as long ago as last year—mentioned the need to move into new technologies. I think there should have been a much quicker response by government to do that.
When you are assessing the way in which a government is responding to these matters of national importance, it is important to see the way it is operating. You want to know whether it is sensitive enough to respond to the problem. As I said, the only reason there has been a statement this week is a backbench revolt. The only reason the migration bill—that pernicious piece of legislation, that weak-kneed legislation—was taken out of the chambers, not to be voted upon, was the backbench revolting and crossing the floor.
We have a situation where the government is in disarray and in a ditch in areas of public policy. Again today in question time the Special Minister of State, as mentioned earlier by the member for Grayndler, showed that there is a divide in the executive government about the extent to which LPG can be used to provide relief for consumers. As we know, the Prime Minister hung his little hat on the importance of bringing forward the rebate to subsidise new cars that have capacity for LPG use and also a $2,000 rebate to convert vehicles to the use of LPG. We support that. In fact, it is something we promoted. We actually suggested that a long time ago. We also suggested quite a while ago, too, that we should not have an excise apply—certainly not the excise that is coming on board to affect LPG costs in the very near future. If the Prime Minister were serious, he would have deferred the impending increases to LPG costs by not applying the excise duty to the LPG, as will be the case in a few years. So there are a number of failings.
In question time today the Special Minister of State fundamentally contradicted the Prime Minister’s statement on LPG. The Prime Minister, in his statement—and I draw your attention to it, Mr Deputy Speaker Barresi—said, effectively, that he would announce these changes and these changes would accelerate the relief for users of LPG and for people who require private vehicle use. He went on to boast:
LPG is readily available through 3,200 service stations in Australia, and nearly half of them are in regional or rural areas. It is usually much cheaper than regular unleaded petrol and diesel due to a range of factors, including concessional tax treatment.
Well, that is true. But the impression the Prime Minister left us with is that this magic wand that he was introducing, by way of a statement in the House yesterday, was going to somehow, in some way, alleviate in an across-the-board manner the problems experienced by every vehicle user in the country who wanted to take up LPG conversion—that is, those buying new vehicles or, indeed, seeking to convert their current vehicle.
The shadow parliamentary secretary for the environment, the member for Throsby, in a letter quite rightly asked about whether there was any capacity for the Commonwealth to save money and improve its environmental standing, and she also asked about LPG matters. The Special Minister of State in response to her letter said, ‘LPG fuel powered vehicles do not meet certain operational requirements of users, nor is supply of LPG readily available in all regional and rural areas.’ The Special Minister of State said—and get a load of this, Mr Deputy Speaker—‘Further cost benefits are only achieved in most cases where vehicles’ travel is in excess of 50,000 kilometres, and this is outside the standard usage pattern of the Commonwealth fleet.’ So he is effectively saying no. He is saying that, in many respects—in fact, in most respects—LPG is not going to provide the alternative source of fuel required for the Commonwealth fleet. Whether you lived in a regional or metropolitan area did not seem to qualify. If you have problems of access to LPG in regional areas, where you probably use the vehicle more often—and they suggest that you only make a benefit when you use up to 50,000 kilometres—how many people will choose to take that option?
That was contradicting the encouraging announcement by the Prime Minister that somehow the LPG plan would be the silver bullet that would solve the problems that beset the nation. Instead, we have to say that this has been a failure by the Prime Minister. This is a government out of touch and out of puff on major matters of public policy. It does not respond unless there is a backbench revolt or a backbench member crosses the floor. The fact is that this government only responds now when there is an internal crisis, internal dissent or public displays of dissent. That is the only way in which this Prime Minister seems to be operating. He is not thinking forward or concerning himself with these sorts of matters. He should have foreseen these matters many years ago, but he failed to do so. (Time expired)
I thank my colleague for his great contribution. It was a stimulating debate, and he has a sense of knowledge about the subject.
You weren’t listening, were you?
I listened very closely, and his acumen is to be commended. As we know, the shadow spokesperson on resources, Mr Martin Ferguson, has moved an amendment on the Petroleum Retail Legislation Repeal Bill 2006. This amendment has a number of parts, which I will go through in my contribution. In brief, it goes to six proposals. Firstly, it calls on the government to require the Department of Industry, Tourism and Resources to report to the parliament annually, commencing August 2007, on a number of measures to do with market penetration of ethanol and biodiesel, LPG and CNG; to invest in biofuels, LPG and CNG production and supply infrastructure; and to invest in new alternative transport fuel industries. Secondly, it calls on the government to review in 2009 the proposal to introduce excise on ethanol and biodiesel, and LPG and CNG in 2011, and consider whether or not there is a case for delaying the introduction of the excise, depending on the progress made in a number of areas.
It then criticises the government for its tardiness in moving on petrol retail reform and calls on the government to immediately conduct a feasibility study into gas to liquid fuels in Australia, and I will come to that later. It calls on the government to immediately embrace Labor’s fuel blueprint proposal to (1) make alternative fuel vehicles tariff free, cutting up to $2,000 off the price of current hybrid cars and (2) grant tax rebates for converting petrol cars to LPG. It calls on the government to immediately embrace Labor’s fuel blueprint to find more oil and gas by re-examining the depreciation regime for gas production infrastructure and to allow the selective use of flow-through share schemes for smaller operators.
During his contribution to this debate yesterday, my colleague the member for Hotham made mention of the fact:
The government continues to claim credit for freezing petrol excise.
Those of us who were in this parliament when the government first proposed the GST would remember that it was Labor that exposed the government’s folly that the GST would lead to cheaper prices. Of course, it never happened, not even before the impact of increasing world fuel prices. The freezing of the petrol excise was forced by public pressure on the government to act following a campaign spearheaded by Labor.
Recall again the back-stepping that occurred just prior to the introduction of the GST. The government’s proud boast at the time that fuel would be cheaper under GST was changed to the limp statement that fuel need not increase in price as a result of the GST. As I am sure you will recall, Mr Deputy Speaker Barresi, they said that they would reduce the excise by 7c a litre to compensate for the GST. If it was compensation, why is it that Australian motorists are now paying higher fuel taxes? As my colleague the member for Hotham said, the impact of the GST at the time of its introduction was only zero when petrol was priced at 69 cents per litre. When the GST was introduced, the price of fuel in my own electorate of Lingiari was already over the dollar mark. That was only in the larger populated areas of the electorate; in the more remote parts they were paying considerably more, as is the case today. Motorists in Lingiari and other parts of remote Australia—in the north-west of Western Australia, the far north of South Australia and western Queensland—know very well just how much extra fuel tax they are paying as a result of decisions taken by this government.
This government has never been able to deliver on its guarantee that petrol prices would not rise because of the GST. Not even the introduction of the Fuel Sales Grant Scheme, which was designed to provide savings of up to 3c a litre for consumers in regional areas, gave any relief. Now the Fuel Sales Grant Scheme is gone. To be quite frank, motorists in remoter parts of the electorate of Lingiari would not notice the difference. Indeed, I think that would be true of many parts of regional Australia, especially in some parts of my electorate where they could be paying $2.50 or even $3 a litre for fuel, or even in the main towns, where they are paying up to $1.70 a litre. As for the revenue saved by scrapping the Fuel Sales Grant Scheme, the government says it will go to roads. Motorists are not holding their breath waiting for the $810 million saved from the scheme going to roads in rural and regional Australia. Like the great many infrastructure needs in remote parts of Australia, they will believe it when they see it.
I have spoken on and on in this place about the failure of this government to address the road needs of rural and remote Australia. I have particularly raised my concerns about the failure of this government to provide adequate resources for roads for people who live in remote Aboriginal communities—on land which is not incorporated under any local government scheme—and for roads that link communities that might traverse through cattle properties and are major economic links for many people in the Northern Territory and other parts of Northern Australia. These roads need considerable work. In the case of the Northern Territory, there are between 8,000 and 9,000 kilometres of these roads, none of which are kept up to a standard that you would believe to be appropriate. There are many places in the Northern Territory, as I have said before, where the roads are out for six months of the year.
The promises of this government when they are made are not made or directed towards the people who live in these far-flung regional and remote areas. Generally speaking, the promises made in this place by the government in relation to relief for regional Australia are made to address relief to named National Party electorates and some Liberal Party electorates in regional parts of Queensland and New South Wales.
We know, despite what they say and despite what arguments might be put forward by the Prime Minister or the Treasurer, that the GST is nothing but a tax on a tax in relation to petrol. That is something that this government said—promised, indeed—would not happen. As we all know—a basic understanding of pricing would tell you—the GST gets larger the higher the price. This is true of petrol as it is of anything else. It is a new form of tax indexation. There is no point in seeking virtue by freezing the excise when the GST is a movable feast and moving ever upwards.
Since introduction of the GST in July 2001, the price of fuel in my own home town of Alice Springs has increased by 42 per cent. The total tax on fuel for the corresponding period in Alice Springs has seen a 17 per cent increase. This increase has been due to a reduction in excise but an increase in GST. The Prime Minister gave a summary of this increase in question time yesterday. He admitted that the GST take on fuel had increased over time, but he could not bring himself to say—he conveniently forgot, as members of the government continually forget—that, while the GST has increased for all Australian motorists, it has increased to a greater extent for motorists in regional and remote Australia, because they pay more for fuel. I spoke inside and outside this chamber time and time again prior to the introduction of the GST—and have many times since its introduction—on its impact on rural fuel prices. I will say it again: remote communities in this country pay the highest fuel prices and pay more tax than motorists anywhere else in the country.
During the winter recess I travelled to a number of communities in my electorate. A month ago in Borroloola the price of unleaded fuel was $1.63 a litre. That equates to extra GST of around 9c. Down the road at Cape Crawford the price was $1.72 a litre. That equates to extra tax due to GST of around 9½c. I also travelled to Urapuntja—better known to some as Utopia—and paid $1.75 a litre. That equates to nearly an extra 10c on GST. Even down the spine of the Northern Territory on the Stuart Highway things were not greatly different. In smaller communities like Tennant Creek and Elliott, the price of unleaded is similar to that at Borroloola at around $1.62 a litre.
We love the grey nomads. They spend a lot of money in the Territory and a lot of money in regional Australia, but travelling up north from down south as they do at this time of year they will no doubt know the impact of the GST as they go to fill up their vehicles to tow their caravans. They will understand, as the government clearly does not, the additional costs that are suffered by people living in remote Australia as opposed to those living in capital cities and will come to the conclusion very quickly that you pay more tax in the bush than you do in the city.
I could go on about this, but remember that all of these increases in total tax factor in that fuel excise has been reduced since 2001 by 7c and that its indexation was abolished early in 2002. So much for the government’s claim that the GST would reduce fuel prices. Now the government argues that the total fuel price increase has been primarily due to circumstances beyond its control. Granted, this may well be the case, but it is no excuse for the government to sidestep the increasing tax factor in current fuel prices. It remains to be seen if the regulation of industry conduct through the industry code and the Oilcode, and the repeal of the sites act and franchise act, will have any substantial benefit to consumers, particularly in remote parts of Australia. I will say, because I know, that in Alice Springs the number of outlets has been reduced over recent years. Three have closed down and one new station has been set up, operated by a major supermarket chain. I fear for the loss of competition and the impact on price competition in the long run.
Hopefully, the introduction of the Oilcode will ensure all participants, including independents, are subject to the same regulatory requirements, including a nationally consistent approach to terminal gate pricing. However, the reality for many in my electorate is that they have no choice at all. They are at the mercy of the one pump in their community, most often provided by the community store, not a one-stop service station for all your fuel and motoring needs. These community stores do not have the turnover to buy substantial quantities of fuel and to pay to have it delivered the long distances. Consumers then pay the highest taxes on a litre of fuel of any Australians, and in most circumstances these are the poorest of Australians. I am disappointed that the Prime Minister did not mention that yesterday when he acknowledged that the GST had led to higher fuel taxes than those that existed at the time his government introduced the GST.
On the issue of the government’s response to soaring oil prices—to provide tax-free grants to motorists to convert their vehicles to LPG—I would like to make a couple of comments. It is not often I agree with a radio commentator, particularly John Laws, because I make certain I do not listen to him, but I have listened to him in the last day or so. I think he was right when he pointed out today that subsidising conversions discriminated against people with older and cheaper cars, as they do not see the point in paying the difference of the conversion costs. Many people in my electorate, who are, as I say, the poorest of all Australians, buy the cheapest motor vehicles because they do not have the financial resources to buy new cars or even quality second-hand cars.
I did a quick search of the motor fuel outlets on major roads and found 3,200 LPG outlets in regional Australia. In my electorate I looked at 29 service stations; only 17 had LPG. If you happen to live in Borroloola, forget it—there is no LPG. At Nhulunbuy, a town of 4,000 people, there is no LPG. If you drive up and down the Stuart Highway you find that there are many roadhouses that do not have access to LPG. I am not quite sure what the Prime Minister was proposing in trying to promote these new service stations providing LPG, but I can say that currently in large areas of the Northern Territory you just cannot access that fuel.
Forty per cent or thereabouts of my electorate live in remote communities. If they are lucky they have a community store that operates a petrol bowser. We know that, by and large, they do not have any access to LPG. Of course, my point here is that the government policy to reduce reliance on diminishing petrol and diesel by encouraging conversion to LPG faces a snag—access for motorists who live in remote areas. As there are limited LPG suppliers there is no incentive to convert vehicles. The lure of a subsidy for a new or used car conversion means, by and large, absolutely nothing. In responding to Mr Laws, the Prime Minister claimed that, while grants were not the complete solution for people feeling pain at the pump, it was offering some relief. He said:
It is doing something at the margins to help, I suspect, a reasonably large number of people.
The Prime Minister must know—and his ministers and members must know—that, once again, it is rural and remote Australia that will wear the burden of ever-increasing fuel prices due to the lack of access to the cheaper LPG. Not satisfied with fuel taxes for regional and remote Australians increasing to levels higher than those that exist in the cities, the Prime Minister has now turned his back on the bush by offering assistance to a reasonably large number of people and forgetting those at the margin, where fuel prices are highest.
My colleague the member for Hotham said yesterday:
What can be done to ease the price differential between city and regional areas and ease the burden on regional motorists?
He pointed out that the Prime Minister says that the solution is through direct tax cuts. But the member for Hotham was right on the money when he said:
The trouble with this response is that the government has increased the price of petrol in regional Australia ... with no compensation in tax cuts for people living in those areas.
As I have said time and time again, and I repeat it here today, there needs to be an understanding in this place—and I do not think there is; in fact, I am sure there is no understanding—of the costs that people who live in remote and rural Australia are asked to bear. They are paying more in indirect tax on petrol, and they do not get any more than metropolitan areas in tax cuts. It is about time we had a targeted tax rebate for regional Australia. We could do that with a bit of creativity and inventiveness and if this government came down with proposals which address the needs and concerns of people who live in the bush, as it should do, and not just those people who live in the Prime Minister’s electorate.
I want to speak on a couple of matters pertaining to the Petroleum Retail Legislation Repeal Bill 2006 and to the Prime Minister’s announcement yesterday. Firstly on the matter of this bill, the long-heralded Oilcode is the issue of transparency. Prima facie, it seems to be the direction to which most people have been arguing for many years. But in looking back at the debate in 1998, when the repeal legislation was first introduced, I was concerned at that point, and I remain concerned, about the impact of the abolition of these pieces of legislation, irrespective of the introduction of the code, on the smaller service station operators, particularly in towns and villages outside the interests of the major operators, and particularly the supermarkets.
I took note of the member for Kennedy’s comments in this debate last night. Those wonderful words ‘competition’, ‘competition policy’, ‘transparency’ and so on have effectively brought about a concentration of market power. Supermarkets, perhaps here with the oil companies, are forcing out the smaller suppliers, the smaller garage, workshop and all of those job opportunities that the petroleum industry has traditionally offered in smaller country towns.
On the LPG conversions and the Prime Minister’s announcement yesterday, it remains to be seen whether these initiatives really will convert us to liquid petroleum gas. I note today concerns that the scheme will reward owners of large, gas-guzzling cars with a subsidy from taxpayers who do the right thing by buying small cars or, in the city, catching public transport. There has also been concern expressed to my office today from those who have already invested in the LPG conversions. It is a substantial expense, and they are wondering whether there is any retrospectivity in this process. I think not.
Buyers of new cars will receive a $1,000 grant while second-hand cars will be eligible for a $2,000 grant towards the cost of conversion to LPG, but the money has to be paid up-front. This is not possible for those people of limited income and means, who perhaps have the need to save whatever they can on their fuel bill. The member for Scullin talked last night of the metropolitan experience, where those from the outer suburbs of Melbourne, and no doubt in other major cities around Australia, are more often the ones living in the most affordable homes and the ones who need the biggest financial break they can obtain. They are the ones travelling the furthest, whereas those living in the inner cities with their big homes, and no doubt big cars, are able to take advantage of this without any financial pain.
It begs the question, among other things: where are the public transport initiatives for the cities? We cannot leave it all to the states. Sure, they should be spending far more, but we see now the states at least re-examining an old axiom of economics—that is, it is not a negative thing to borrow for infrastructure that will be paid off by future generations. But they should not be borrowing for tunnels and grand flyovers, inducing more and more cars onto the highways of our metropolises in particular.
And therein lies a very sound argument that the Prime Minister has well documented—that is, this easing of the cost of private transport in private cars should not be encouraged by reducing the excise on petrol. It should be used to encourage the introduction, through biofuels, ethanol and other means, of a cheaper additive to our petrol supplies that will give a win-win benefit to the environment and to those who purchase that product. But I do not see anything in yesterday’s package to suggest that, by not mandating the use of ethanol, we are going to go anywhere near satisfying an environmentally sound outcome.
The Prime Minister says the government may look at ways of mandating the availability of cheaper ethanol blended fuels—whatever that means. He does not say, ‘Because through some ideological position you do not mandate anything in this world.’ I think there is finally a recognition in this place of the situation with global warming. I had members around me in the last few years who severely questioned the veracity of the argument about global warming. I heard some members—I will not say exactly where they sit in this place, but they are still around—daring to say that the whole global warming plot was a figment of the scientific world’s imagination and that it was just one of those cyclical things that occur on this planet as time goes by. But they did not explain why it is that since the industrial revolution we have had a gradually increasing global warming that has accelerated to such a fantastic degree in recent years, and it is only going to get exponentially worse with the bringing on of the demand for motor vehicles in India and China, fuelled by their massive growth in GDP.
It is a huge crisis. This initiative by the government is a very hastily arranged package—as we saw today in question time, I would suggest—to try to head off flak about the increasing price of fuel. I do not think any government should offer any hope that there will be a reduction in fuel prices in the years ahead. The government should take the issue firmly on the chin. It should take the electorate into its confidence and say, ‘There will be some tough questions asked and there will be some tough policies here.’ Part of that toughness should be to mandate the inclusion of bio-friendly fuels, ethanol and others into our fuel chain, with the full price benefit passed on and not gouged back.
The member for New England detailed in his contribution to this debate how the oil majors get the headlines and say: ‘How good are we! We are offering this discount,’ yet they are quietly gouging it back at the retail outlet. More often than not, those independent operators have been prepared to carry the ethanol flag for so many years now, believing in it as a product in rural areas in particular that is part of an answer to our decline in rural economies. I hinted at this in a question today, where Cowra is looking down the tube at the closure of its abattoir and the loss of a couple of hundred jobs. This has been brought about by the extensive drought and the fact that stock numbers are down significantly. Maybe, just maybe, down the track there will be an abattoir industry of the proportions we have seen in the past but, unless there is a buyer for Cowra—and it is looking fairly bleak—those workers will be on the rack.
There are other industries in the town of Cowra. One is the Windsor Farm Food organisation, which is desperately hanging out for an answer from the Minister for Justice and Customs on an interim excise that has been applied to an imported Chinese mushroom product, which it claims is being dumped—and any fair judgement of it would suggest it is being dumped. It is being put on the shelves by whom? By the major supermarkets, as a generic brand and at far below the cost that Windsor Farm can turn out the product. The gouging of the market by the foreign supplier has led to the closure of the tin-plate manufacturing plant on the South Coast, which produced the cans for Windsor Farm to put its product in. Because Windsor Farm’s production has fallen through unfair competition from offshore—along with others in the market—we have lost another industry. This cannot go on forever.
There are two furniture manufacturers in Cowra, and the abattoir and Windsor Farm Foods, which are all in very tenuous circumstances. They would argue, quite fairly, that products are being dumped on the Australian market, and they are finding it very hard to get the government or trade ministers to argue at a world forum that they are faced with unfair competition. Surely the ethanol industry is but one that offers a strong alternative—one that we should encourage through a mandate. As the member for New England pointed out following his recent study trip, it is mandated in states throughout America. There is also the Brazilian example, where something like 30 per cent of ethanol goes into the fuel chain.
The fuel companies have strangled the ethanol process in this country because they control the outlets. Coming back to the bill, there is nothing to suggest that anything other than further control will occur. I am mindful of the arguments as to why this act may result in a more efficient industry, as many have said, but I am also mindful of the fact that the repeal of the franchise and sites acts is likely to result in some other concerning outcomes, such as franchisees being likely to lose from this restructuring. The number of small businesses will inevitably diminish.
I am constantly brought back to the words of the Motor Trades Association when they said to me and my Independent colleagues—and they told the Senate inquiry—that the outcome of these changes will result in the closure of more small, franchised and independent retail outlets in rural and regional areas. Motorists will have to drive long distances. There will be increased dominance by the retail petroleum market, increased dominance by the supermarket chains, a loss of competition in the retail and wholesale markets as independent importers struggle to find sufficient retail outlets. It will be detrimental to motorists in the long term as smaller competitors exit the market and so on. The consumer may finish up with a cheaper product, but it raises the question: are we heading towards one-stop shops, one-shop towns, newsagents and chemists as well?
I am mindful of the Blayney BP independent petrol station, where I often fill up my car. The owner points out that the retail price of their petrol cannot compete with that of stations further down the road in the big regional centres. It is not only the petrol that is an issue. Once petrol station owners decide that they cannot make enough from the petrol, they shut their doors, and that affects the garage, the mechanic and the apprentice—that whole unit which is so important to the social and economic fabric of many country towns.
Cheaper petrol, yes—but at what cost? There is a need to control market share of supermarkets not only in retailing, I would suggest, but in other areas too, including petroleum—as the member for Kennedy outlined in his contribution, when yet again he spoke of the US antitrust measures that have been in place for such a long time to control the influence and power of the major retailers in that country.
I could say a lot more about this, but I will just say this: the supermarket chains account for about half of Australia’s retail petrol sales, yet they do not fall under current legislation. It could be argued that it is important that we standardise the industry to that extent. It is no small irony that the two other majors that are not connected with the supermarkets are being squeezed by the very competition of the supermarkets. It is all right to say that we are going to even out the competition between the four majors, but we are lifting the whole competition debate to another plane, where we now talk about ‘the big four, plus the two’—the supermarkets—or ‘the big six’, if you like, in petroleum. It seems as though we are now forever to close the door on the smaller, independent operators, who I argue are very important to the economic fabric of smaller communities.
Finally, the question is no longer whether global warming will occur or whether its cause is largely due to the human activity of burning carbon in oil refining, power generation and car emissions. Even the world’s largest denier, the US government, now acknowledges it as fact and its causes—something the world’s scientific community has been shouting from the rooftops for decades. It seems that we now have consensus in this place that global warming is not a figment of Steven Spielberg’s imagination. However, the question now is: by how much is it warming, and what results will it bring?
I am not satisfied that the government’s hurried LPG fix or any of the other initiatives it outlined yesterday will go anywhere near curbing our petrol addiction. I am not convinced that they will go anywhere near providing a viable alternative energy process, whether it be for fuelling vehicles for transport or for power generation. While the extension of the solar subsidy to remote communities is welcome, it should be part of a process that is extended to the entire country. I am also not satisfied, as I have said, that in the long run this legislation will be in the best interests of smaller, independent operators or of rural motorists. I am not satisfied that the government’s energy package will benefit those most in need of a break either in price and access to fuel or in operating smaller rural outlets and workshops.
I support the second reading amendment for the substance contained therein, particularly around the Trade Practices Act. It should have been introduced as a cognate bill with this legislation, so important is it to implement the Dawson and Senate recommendations. So the amendment has my support. But I have grave reservations about the impact of this legislation on smaller rural operators. I will certainly look with interest at any amendments that might be moved in the other place that would further protect the interests of those operators.
I am delighted to add my voice to those of my colleagues who have spoken on the Petroleum Retail Legislation Repeal Bill 2006, and I endorse in particular the approaches taken by the Leader of the Opposition and the members for Batman and Hunter in their speeches on the bill.
Unfortunately, the bill as put forward by the government highlights the government’s failed approach to petrol retailing in that it has taken so long for the government to act on these issues. Yesterday, we had the unedifying spectacle of a rattled Prime Minister cobbling together a hasty reaction to the fuel issue in an effort to shore up his support amongst his frustrated and angry backbench—and his backbenchers are justifiably angry. They have been telling the Prime Minister, the Deputy Prime Minister and the Treasurer for months that rising petrol prices are causing pain throughout the country. But the Prime Minister has been blithely telling them that it is not his fault, that the cause of rising prices is tied up with overseas oil and that there is nothing he can do—that is, until yesterday.
Yesterday the Prime Minister announced a range of measures to alleviate pressure coming from the issue of petrol prices, and he pinched a number of ideas from the Australian Labor Party. We do not mind that. We are big enough to take that and to congratulate the Prime Minister on taking our ideas on board. But, unfortunately, the government has not taken up all of our policy suggestions for fuel independence, which the Leader of the Opposition announced in his blueprint on fuels last October.
The government has at last adopted Labor’s policy to subsidise the conversion of cars from petrol to LPG and the guaranteed supply of LPG from a network of distributors. Unfortunately, this approach is likely to be compromised by yet another Howard government failure—our skills shortage. The subsidy will increase demand on an already overstretched industry in terms of conversions. As the Leader of the Opposition pointed out yesterday in the House, in Western Australia there are no conversion workshops in Karratha or Port Hedland, so vehicles must be sent to Perth for conversion, which alone costs $750.
Given the government’s track record on fuel taxation, there are also no guarantees that it will not be mean and tricky again and at some stage increase the tax on LPG. I know that members do not need to be reminded that, in the last parliament alone, the government changed its mind three times about the excise regime. In fact, it was not that long ago that I remember the Treasurer sneaking in an excise rise in the rate of LPG in a budget. There was such outrage from industry—and also taxidrivers, strangely enough—about what was being proposed that almost overnight the conversion industry went broke. Tank manufacturers were going out of business because people were not converting to LPG, and the government had to do an automatic backflip, so to speak, to try and reverse some of these trends. Here we are, and the government has come full circle and agreed with Labor’s philosophy that we need to subsidise people who take up the option of converting their cars to LPG.
There is a very important ingredient of any sensible response to the fuel crisis, which the Prime Minister has again squibbed. He keeps telling us that the ACCC has the powers to monitor retail fuel prices. That is true, and the ACCC does that on its website. But it should have the power to formally monitor petrol prices at the terminal gate and to obtain all information from refiners, wholesalers and major retailers and conduct other investigations into rising petrol prices.
One of the amendments we seek to the Petroleum Retail Legislation Repeal Bill is that section 46 of the Trade Practices Act be strengthened to provide greater scope for dealing with abuse of market power. The amendment we seek to this bill, as explained by the member for Batman last Thursday, would enable sharper and better monitoring of petrol prices; the evaluation of the market share and new investment potential for other fuels such as ethanol, biodiesel, LPG and CNG; the evaluation of the availability of those other fuels around Australia; the examination of excise arrangements for other fuels; the review of the trade practices framework for petrol marketing; the investigation of the feasibility of gas-to-liquids fuel plants in Australia; the examination of resource rent taxation arrangements for the gas field developments; the consideration of infrastructure investment allowances for investment in gas-to-liquids infrastructure; the development of a funding scheme for R&D into alternative fuels; alternative fuel vehicles to be tariff free; tax rebates for converting petrol cars to LPG; and the re-examination of the depreciation regime for gas production infrastructure. These are all important ingredients in the Labor Party’s approach to the fuel crisis facing Australia today.
Political reality decrees that it is difficult for governments to accept the policies put forward by oppositions. I would be naive if I thought that the situation could be any different for fuel policy, but I commend the amendment put forward by the member for Batman as a sensible and positive framework which would enable all realistic options to be examined and considered in a constructive way. It would be good for all Australians if the government could for once forget its pride and adopt the approach outlined by the member for Batman. But I know that this is pie in the sky for this government.
There are no simple fixes to the problems we are facing as a nation as we deal with the impact of higher fuel prices on family budgets and on businesses. The insidious aspect of fuel is that it is an input to just about every service or good produced in Australia. That is why increases in fuel prices underpin inflationary pressures throughout our economy and, indirectly, rising fuel prices ultimately impact on interest rates. So fuel prices hit families and businesses directly, but they also have pernicious impacts indirectly through their impact on interest rates. That is why so many Australians are hurting at the moment. The truth is that the pain that they are experiencing could have been avoided.
This bill repeals the Petroleum Retail Marketing Sites Act 1980 and the Petroleum Retail Marketing Franchise Act 1980. These acts are no longer effective, as they cover less than 50 per cent of the petrol retail industry by volume of sales. The Oilcode, which will be introduced as a mandatory industry code under section 51AE of the Trade Practices Act, will bring the whole industry under a common regulatory regime. This is sensible and appropriate. The Oilcode will improve the protections available to commissioned agents and independent operators, who currently do not have the protections afforded to franchisees. Both franchisees and commissioned agents will also have access to low-cost dispute resolution schemes for the first time.
As I said before, it is essential that section 46 amendments to the TPA are made to address outstanding concerns about the abuse of market power. I understand that the government has agreed to these changes, to be made in other legislation to be introduced into the parliament at a later date.
The introduction of the Oilcode is an important improvement to petrol retailing, and it is a reform which is long overdue. Since its election in 1996, the government has been talking about the need to reform petrol retailing—long on talk, short on action until now. Unlike the government, the Labor Party knows that national leadership is needed to develop an agenda for the use of those fuels which will become cheaper in the future. This agenda is neatly summarised in the amendment moved by the member for Batman. This agenda is necessary and, as I said, long overdue.
At community forums and morning teas throughout my electorate of Swan, one of the most often discussed topics is the fuel industry and the outlook for petrol prices. People know that the price of petrol is fundamentally determined in the international marketplace. They also know that we are too dependent on petrol and that it is sensible to explore the feasibility of adopting other fuels. They want to see action on this front as a matter of urgency. Families and businesses in my electorate are hurting because of higher fuel prices, just as they are in most electorates in the country. I say ‘most’ because, according to the member for Wentworth, these issues are not hitting so hard in his own electorate. But, in electorates in the rest of the country, as members of parliament we all know that people are feeling the pain of higher fuel prices on a daily basis. They know that the government collects almost 40c of the price of each litre of petrol. They want relief.
Many members will recall the early months of 2001, in the immediate aftermath of the introduction of the GST. The government lost a by-election in the seat of Ryan, up in Brisbane. The reason for that loss was the bad publicity the government was receiving for what was perceived as a swiftie it pulled when the GST was introduced. I know that you will recall, Mr Deputy Speaker, that when the government introduced the GST the excise on fuel was supposed to be adjusted in full so that the price of petrol did not rise, but in reality that did not happen. The government provided some part of the necessary adjustment but not the full amount. This swindle became very apparent to Australians, including the voters of Ryan, and so it was not surprising that they voted against the Liberal candidate in numbers sufficient to cause the government to lose the seat.
As the Liberal Party did the usual navel gazing after the by-election loss—and the previous drubbing which the coalition received in the Queensland state election—members may recall that a curious document came to light. It was the infamous ‘mean and tricky’ memo written by former federal Liberal Party president Shane Stone to the Prime Minister, which was leaked to the doyen of the press gallery, Laurie Oakes from Channel Nine. According to Mr Oakes, one of the major points of the memo was to do with the introduction of the GST. ‘We have just been too tricky on some issues’, said Mr Stone with regard to the GST on caravan park fees, beer and fuel. In terms of the impact of the GST on fuel, it was the government’s failure to honour its promise that the excise would be fully adjusted to ensure that the introduction of the GST did not lead to a rise in petrol prices that did the damage. Once again, the words of the then Liberal Party president are proving true in the way in which this government approaches fuel policy.
There is currently an inquiry being conducted in the other place into petrol prices and there is a submission to the inquiry by the Motor Trades Association of Australia, the MTAA. It makes interesting reading and I commend it to members. In its submission, the MTAA explains the very complex formula used to calculate the wholesale price of petrol in Australia, which then, of course, determines to a large degree the Australian price of petrol at the bowser. Import parity pricing means that the wholesale price of petrol in Australia is determined by making adjustments to an ‘international benchmark price of refined petrol’ set in Singapore for Australian fuel standards, wharfage, freight and insurance. This calculation is made in US dollars, which then have to be converted into Australian currency. This means that exchange rate changes can have a significant impact on the retail price of petrol.
One question which often comes up in discussions about petrol is: where is the advantage to Australia from having our own oil and gas fields? Obviously Western Australians are acutely aware of the huge expanse of oil and gas fields in the North West Shelf. The argument often put is that if we refined our own crude oil in Australia we would not be paying a price which is determined internationally. Obviously the oil companies have argued successfully that in order for them to invest in exploration they must be able to charge a higher price for petrol to make that investment worth while. Fair enough. But the international benchmark price is based on the cost of refining oil in Singapore, not Australia. The MTAA submission calls for the ACCC to undertake a complete review of the international benchmark price, including how the Singapore price is set. Such a review could also highlight the components of the wholesale price in Australia at the terminal gate. As I said, the MTAA submission is worth reading and it raises some very salient questions.
Just looking at what has gone on in my own electorate in terms of petrol prices, the increases are stark. According to FuelWatch in Western Australia, since January 2006 petrol prices in metropolitan Perth have increased by 40 per cent. That is a huge impact on family budgets by anyone’s reckoning. The government’s tax cuts do not compensate for the petrol price hikes, let alone the recent interest rate rises. The impact on businesses, especially small businesses with tight margins, is also severe. My message to the families and businesses in Swan is this: Labor will deliver a practical and comprehensive approach to fuel and we will leave no stone unturned in assessing the viability of alternative fuels. As outlined by the Leader of the Opposition in his blueprint last year, the Labor Party’s approach is to develop existing alternatives, such as liquid petroleum gas, ethanol and biodiesel; emerging alternatives such as compressed natural gas, liquid fuel from gas and stored electricity; and future fuels, such as hydrogen. These steps will stand us in good stead as we seek to protect Australia’s interests in the wake of rising fuel prices.
The Prime Minister knows that his government is suffering as a result of rising petrol prices, and now he is scrambling for initiatives to make it look as though the government is on top of this issue. Anyone watching the Prime Minister’s demeanour this week will at last know that he is rattled. It is not just because of the courageous stand taken against him by the members for Kooyong, Pearce and McMillan, as well as the abstentions of the members for Cook and Forrest and the strength of Senator Troeth. His rattled visage is also due to the fact that the government is clearly on the back foot with regard to petrol prices and interest rates. I call on the Prime Minister and his tired government to look at the petrol price issue objectively. If there was ever a time for the government to take a lead from Labor, it is on this issue. The government is demonstrating that it has run out of steam, and, thanks to the Leader of the Opposition and the members for Batman and Hunter, quite clearly Labor is setting the agenda.
Just before going to the next speaker I note that I think the member for Swan meant that the member for Mallee, Mr Forrest, abstained.
I rise to speak on the Petroleum Retail Legislation Repeal Bill 2006 and to indicate my support for the amendment moved by my colleague the member for Batman. Before I go any further I would like to correct some of the anomalies put forward by those opposite—or the very few speakers opposite who have actually spoken on this bill—about Labor’s attitude towards ethanol blended fuel. Labor, it is true to say, has had some major reservations about ethanol blended fuels and expressed those reservations a couple of years ago when the issue first became apparent in this parliament. It did so with good reason. At that time there were situations where a lot of unscrupulous distributors and retailers were artificially putting in ethanol and acetone or paint thinners into petrol or unleaded petrol to try to enhance their profits and increase their margins. It is quite illegal and potentially quite dangerous.
I have had some experience with the use of ethanol as a fuel. In my youth I was involved in competitive motorcycling and we used to use 100 per cent ethanol in those motorcycles because it enabled us to use engines with much tighter tolerances and clearances. The fuel burnt much cooler and enabled us to get more power from those particular engines. But there was a downside: the fuel had a very short shelf life. If it was not extracted from the machines, it used to form a gel-like substance, like wax. That could clog the carburettors and render the engines inoperable. It was very dangerous. If it was to be put into automobile engines in larger quantities—and, remember, the government was not advocating a 10 per cent ceiling on ethanol in those days—and do the same thing, it could render those engines inoperable at the worst possible time and perhaps cause an accident. It is potentially dangerous but certainly lethal. Unleaded petrol is also used in marine engines. If you are in a boat five kilometres off the shore of the coast of Australia and that situation happens, it is very dangerous.
It is more dangerous in aircraft engines. The Rotax engine, for example, is designed to run on unleaded petrol. If it had a fuel mix of higher than 10 per cent, the very same situation could occur. That is what I am advised by some of the experts, and I am certainly not one of those. So that was the reason for Labor’s opposition to ethanol in fuel at that particular time. I am told by the experts that a 10 per cent blend would be quite sufficient to enable most modern automobile engines to run quite successfully. So let us have no more of this nonsense from those opposite about Labor’s attitude to ethanol blended fuels.
Labor will never allow major oil companies to drive any competition out of the market. Australia needs an independent fuel retailing sector that will prevent the major oil companies, and their partners such as Coles and Woolworths, from dominating and controlling the market. That is precisely what this bill is all about.
Labor is supporting and amending this bill on the basis of the government’s so-called commitment to change the Trade Practices Act, something it failed to do in yesterday’s prime ministerial statement on the energy crisis. Competition in the fuel retailing sector cannot occur unless we have a stronger Trade Practices Act designed to encourage competition and discourage less than ethical behaviour by those who seek to dominate particular markets. There can be no clearer example of the need to beef up section 46 of the Trade Practices Act, which contains the main provisions for protecting against the misuse of market power and for protecting and enhancing competition. I use the term ‘so-called commitment’ because I believe—and there is plenty of evidence to suggest—that this government is still not fair dinkum about doing anything to enhance the powers of the Trade Practices Act, especially in monitoring petrol prices and profits.
In fact, while some aspects of Labor policies have been stolen and were incorporated in the PM’s policy statement yesterday, the government has predictably stopped short of providing the ACCC with the power it needs to effectively examine current and future petrol price rises. Petrol prices are one of the three areas where the policies and/or inaction of the Howard government are wreaking havoc on ordinary Australians, especially on the residents of my electorate of Bendigo, which is already one of the poorest, if not the poorest, regions of Victoria and one of the poorest regions in Australia in terms of weekly family income.
These policies and failings have created a new and unprecedented level of insecurity throughout the Bendigo region. Firstly, the government has destabilised the region’s employees with its draconian IR legislation and its potential impacts. Secondly, the government welshed on its election promise to keep interest rates at record lows. Thirdly, escalating petrol prices are a complete disaster for low-income earners in Bendigo. Craig James, chief economist with Commonwealth Securities, has estimated that the average Australian family spends $191 a month on petrol—and this includes an increase of $30 a month since the start of this year. That is an extra $7.50 a week sucked away from motorists at the bowser.
Not only has this government failed to act on rising petrol prices; it has backed the US invasion of Iraq. The US policies since then have created the Iraq chaos that has massively slashed the production of oil in Iraq. No other OPEC oil producer has made up for this lost oil production capacity. The policies of the Howard government in support of the Bush administration are a direct cause of the high petrol prices that Bendigo region motorists have been paying at the pump.
The RACV has warned motorists to purchase petrol early this week to avoid paying up to 15c extra per litre, as petrol prices in Melbourne are likely to rise to $1.50 per litre or more over the next few days. If fuel prices reach the $1.50 per litre mark in Melbourne then regional Victorian motorists will pay much more, as is always the case. Unleaded fuel hit $1.45 per litre for the first time in Bendigo leading up to the June Queen’s Birthday long weekend. Other states that observed the public holiday experienced similar petrol price rises. It is interesting to note that, in Western Australia, where there is no June Queen’s Birthday long weekend, petrol prices remained stable.
There is little doubt regarding the evidence that suggests that motorists are being ripped off by Prime Minister Howard and Treasurer Costello, while they continue to refuse to lift a finger to help. Petrol prices differed by as much as 13c to 14c per litre around regional Victoria over the previous Easter break, and Bendigo motorists paid the highest prices for petrol. Mildura, for example, is situated 600 kilometres from Melbourne and 400 kilometres from Adelaide, yet motorists were able to buy unleaded fuel for around 13c per litre less over the Easter break than motorists were paying in Bendigo. This should prove beyond all doubt the need for an effective monitoring and investigative body to ensure motorists are paying a fair price for fuel.
What makes central Victorian motorists very angry is the varying difference between metropolitan and country fuel prices, differences that in most cases are almost impossible to justify. What makes them even angrier is that, when the world crude oil price rises, it is often reflected at the bowsers in regional Australia in two or three days. When the world price for crude oil drops, as it sometimes does, it can take up to two weeks or more to be adjusted down at the bowsers—just another reason for the coalition to direct the ACCC to effectively monitor both fuel prices and profits.
Victoria’s peak motoring body, the RACV, has labelled recent petrol price hikes in Bendigo as simple profiteering. In recent weeks there have been occasions when petrol prices have jumped by as much as 7c a litre in less than an hour, usually between Wednesday night and Thursday morning. Often the price has fallen back to the original price within hours. The Royal Automobile Club of Victoria spokesman and head of government relations, Mr David Cumming, has described such action as unacceptable. He said:
All that is doing is saying to the market I want to make a bigger margin ...
They are also saying to the market to follow them. If the other stations don’t follow, they will then put their prices back down.
Another clear example of evidence that warrants a thorough investigation by the ACCC.
There is something sinister regarding the coalition’s do-nothing attitude to rising fuel costs. They constantly hide behind the mantra of ‘its out of our control’ or ‘it’s caused by the world pricing structures for crude oil.’ Of course the world price for crude oil is a significant factor in determining what Australians pay at the bowser—no-one disputes this fact. However, the rising world price of crude oil is being assisted by turmoil in the Middle East—and, as I said earlier, the Howard government is contributing to that by being an active partner in the coalition of the willing in Iraq.
The hypocrisy demonstrated by the coalition government is simply breathtaking. On the one hand they hide behind the chant that fuel prices are solely determined by world pricing for crude oil and that turmoil in the Middle East is keeping these oil price at record highs. On the other hand they are contributing to turmoil in the Middle East by participating in the invasion of Iraq.
Adding insult to injury, regional Victorian motorists have paid a staggering $198 million more in petrol taxes since the introduction of the GST, with central Victorian motorists contributing a massive additional $22 million to the Howard government’s fuel tax rip-off. The fuel fraud was revealed at a national trucking convention in Newcastle last year when the shadow roads and regional development minister, the member for Wills, who is at the table, proved that, if the government had stuck to pre-GST fuel taxes, it would have reaped $41 billion in the previous four years. Instead, it was estimated it had collected more than $44 billion. Spread evenly across the nation, this made regional Victoria’s share of the secret Howard government windfall around $198 million and rising. And I suspect our true share of that vile amount is even more than $198 million, given that country people pay more per litre for their fuel—and, according to transport economists, make more and longer vehicle trips than city motorists. Country people are even worse affected by the secret taxing, because of the transport costs component in absolutely everything they consume. The country transport industry has every right to feel very angry about this. In his address to the Australian Trucking Convention in 2005 the member for Wills said that in 2000-01 total petrol tax revenues were $8.38 billion. In 2004-05 it was estimated the tax take would be $9.32 billion, almost a billion dollars more than in 2001.
By the end of the financial year 2004-05, the Howard government would have collected an estimated $44 billion in petrol taxes since the GST came in—$36 billion in excise and $8 billion from the GST. If the government had stuck with the pre-GST petrol tax arrangements it would have collected $41 billion, or $3.31 billion less, during this period. Even allowing for the 1.5c per litre cut in March 2001, and for revenue forgone as a result of a nonindexation of petrol excise, the Howard government is still over $3 billion better off in petrol taxes since the introduction of the GST.
The Howard government does not seem to care that its bowser rip-off is becoming worse as time goes on. It so far shows no interest in stopping this scam. The coalition government prefers to walk away from its moral responsibility to use fuel tax revenues, including GST, to fund and maintain Australia’s national highway network on a fair and equitable basis as its AusLink strategic regional roads funding program was used as a $93 million slush fund in coalition held or targeted seats during the last election campaign. It is little wonder it refuses to take any action to provide motorists with any relief at the bowser.
The Howard government claimed the GST would lead to a drop in some indirect taxes but, when it comes to petrol taxes, the GST has been used to conceal a grotesque petrol tax rip-off. Of course, the coalition hides behind another mantra: that the states receive 100 per cent of all GST revenue. Perhaps they do, but the GST is a Howard government initiative. It and it alone was responsible for initiating the policy, deciding on what basis and what goods and services it would apply, and collecting the revenue. So let us have no more nonsense of blaming the states for the GST component in petrol taxes.
There is another example of the government’s sinister motives in doing nothing to assist motorists experiencing record high fuel prices. In 1996 the government abolished the Prices Surveillance Authority, which used to effectively monitor fuel prices and profits. Of course, the Howard government regarded this agency as unnecessary, so it abolished it at the first opportunity after gaining office. Abolishing the Prices Surveillance Authority and refusing to provide the ACCC with the direction and powers it needs shows that the Prime Minister seems hell-bent on seeing motorists continue to be ripped off by excessive fuel prices while he refuses to take any action to drive prices down.
Over the past 2½ years, the annual cost of the average Australian motorist’s fuel bill has skyrocketed by more than $400. The long-term price increase was worsened by a savage increase in the lead-up to Easter that pushed fuel up to and over $1.45 a litre in some instances. If the fuel price hike is sustained, and the 2006 annual average price ends up being $1.35 a litre, then typical Australian motorists will end up paying a massive $660 extra a year for fuel. Without formal direction the ACCC is powerless to use its compulsory information acquisition powers to vigorously investigate this year’s Easter fuel price hike and all of the others. Part 7A of the Trade Practices Act provides the competition watchdog with the power to subpoena documents and witnesses, but only after receiving a direct and precise set of instructions from the federal government.
Prime Minister Howard and Treasurer Costello have both assured motorists that the ACCC is ‘on the job’ investigating the current record fuel price hike. It is dishonest for the Prime Minister and Treasurer to make these claims when both have so far refused to formally direct the ACCC to begin effective monitoring of fuel prices and profits. The Chairman of the ACCC, Graeme Samuel, confirmed on ABC radio on 7 April that the ACCC had not been directed to begin formal monitoring of fuel prices, and he has not been given that instruction since then. The Prime Minister and Treasurer appear happy for the ACCC to adopt a ‘look but don’t touch’ approach to fuel prices and are still refusing to let the competition watchdog off its leash.
They are all talk with precious little action in addressing the petrol pricing rip-off. It is only when there is an ongoing and regular regime of petrol price monitoring with appropriate powers, similar to the task the former Prices Surveillance Authority used to provide, that any incidences of price fixing are able to be detected. The Howard government should reinstate the Prices Surveillance Authority or give the ACCC the appropriate direction and powers to monitor petrol prices and profits and prosecute offenders when they are charged with price fixing.
Labor is the only major political party that has a long-term commitment to enabling Australia to become self-sufficient in fuel, as stated in our amendment to this bill. We need to fast track a home-grown fuel industry for the 21st century. Yet, until yesterday, Australians had not heard one constructive suggestion or proposal from the government about fuel self-sufficiency. Today the government has stolen some of the very policies that it previously criticised Labor for advocating over the past 18 months. Labor in government will, as we have said since October last year, through the encouragement of innovation and tax initiatives, encourage the development of a gas to fuel industry using our massive natural gas reserves. Labor will also encourage the development of a biofuel industry using ethanol. But this is a medium- to long-term plan that a Beazley Labor government would initiate. What we need is relief at the pump right now. The Prime Minister continues to walk away from high petrol prices and wash his hands of the problem. All he has to do is have the Treasurer direct the ACCC to formally monitor petrol prices and profits, but he will not do it.
Recently, on Melbourne’s radio 3AW, the Prime Minister used spin and distortion when he promised Australian motorists that he would direct the ACCC to formally monitor fuel prices. When Neil Mitchell asked him:
Will you ask the ACCC formally to monitor prices?
the Prime Minister replied:
Naturally I will go back to them in the light of what’s been claimed and alleged in the recent past ...
Neil Mitchell said:
Let’s just get that clear. You will ask them now.
The Prime Minister said:
Yes I will. I will ask them again to have a look at it. They probably are anyway, but I certainly will.
There is a world of difference between asking the ACCC to simply ‘have a look at it’ and directing them to effectively monitor prices and profits. The ACCC is already recording or ‘looking at’ fuel prices in various locations across Australia but cannot effectively investigate allegations of artificially inflated fuel prices until the government directs it to do so.
Of course, there has been no follow-through on the promise of formal petrol price and profit monitoring. Mr Howard has constantly refused to formally direct the ACCC to begin what is called part VIIA monitoring of petrol prices. Until the ACCC uses its part VIIA powers to subpoena documents and witnesses, we will never know if current record fuel prices are just a function of rising world prices or if the oil companies, distributors and retailers are exploiting the situation to artificially inflate fuel prices.
The Prime Minister promised Australian motorists a full and frank investigation by the ACCC into record fuel prices—and he has not delivered on that promise. Unfortunately, the Prime Minister has decided to ignore that commitment completely. He is all spin and no solutions. The Howard government is a policy-free zone on fuel prices. Until yesterday, it had no short-, medium- or long-term solution to our reliance on imported oil and foreign prices. All the government has is an expensive offer to make to motorists who are lucky enough to be able to afford the up-front costs to convert their vehicles to run on LPG—and it will continue its regular multitax rip-off policy, which devastates the household budgets of most Australians.
In the short term, the Howard government should be forced to give the ACCC the powers it needs to investigate fuel prices and, over the middle to long term, it should develop fuel self-sufficiency strategies, as suggested in our amendment to this bill. The next Labor government will lead Australia’s way to fuel self-sufficiency so that average Australians can get relief from high petrol prices at the bowser. I urge all members to support the amendment as well as the bill.
It is my pleasure to follow the member for Bendigo in this debate and to endorse what was a very well researched speech into many aspects of petrol pricing. He was kind enough to quote some remarks about the impact of GST on petrol prices and petrol taxes that I made at a trucking industry conference at the end of 2004. It is my melancholy duty to inform him that, since that time, the government’s GST take has increased. The estimate I have seen for the financial year 2005-06 is that the GST petrol tax take will exceed $2 billion, bringing the total GST petrol tax take since the government introduced the GST to over $10 billion.
The Prime Minister says, ‘Oh yes, but you have to look at what would have happened to the excise had we not frozen it,’ as the government did at the time. I think it is incorrect to simply assume that the public would have accepted an increase in petrol taxes via the excise at the same time as other petrol prices and components of petrol prices were increasing. The government’s claim that ‘it is too expensive to reduce petrol taxes’ masks the fact that petrol taxes continue to increase as the price of petrol rises, because the GST is a 10 per cent tax on the top.
The government also claims that GST revenue goes to the states and people ought to look to the states in this regard. Mr Deputy Speaker Hatton, you may recall that, when the GST was introduced, the government claimed it would lead to new breakthroughs in federal-state financial relations and it would mean the end of disputes between the states and the Commonwealth over financial matters. In fact, it has done nothing of the kind. The Commonwealth has endeavoured to reduce other outlays to the states, which puts additional financial burdens on them, and the federal-state fiscal argument continues unabated, GST notwithstanding.
It is my pleasure to support the amendment to the Petroleum Retail Legislation Repeal Bill 2006 moved by the member for Batman. In particular, I draw the attention of the House to the aspects of his amendment that call on the government to review, in 2009, the proposal to introduce excise on ethanol and biodiesel, and on LPG and CNG in 2011, and to consider whether there is a case for delaying the introduction of excise, depending on the progress made in increasing market penetration of biofuels, LPG and CNG; in securing new investment in biofuel, LPG and CNG production and supply infrastructure in Australia; and towards achieving the 350 million litre biofuels target in 2010.
The amendment goes on to criticise the government for failing to introduce amendments to the Trade Practices Act to implement the 2003 Dawson and 2004 Senate recommendations for reform. It also calls on the government to immediately conduct a feasibility study into a gas to liquids fuels plant in Australia, including consideration of petroleum resources rent tax incentives for developers of gas fields which provide resources for gas to liquid fuels projects; examining a new infrastructure investment allowance for investment in Australian gas to liquids infrastructure; and developing a targeted funding scheme for research and development in this area. Further, the amendment calls on the government to embrace Labor’s fuels blueprint proposal to make alternative-fuel vehicles tariff free, cutting up to $2,000 off the price of current hybrid cars, and to grant tax rebates for converting petrol cars to LPG. It also calls on the government to embrace Labor’s fuels blueprint to find more oil and use more gas by re-examining the depreciation regime for gas production infrastructure and allowing the selective use of flow-through share schemes for smaller operators.
Regrettably, today’s debate on petrol prices has followed the effective doubling of petrol prices in Australia for motorists in the space of a mere two years. I was entertained today to hear the industry minister at the dispatch box suggesting that Labor’s proposals in relation to greenhouse gas emissions and our targets for 2050 would lead to a doubling of petrol prices by that time—by 2050—when the government has managed it in two years.
But, while this has been happening, those opposite have been sitting on their hands, saying, ‘We’re terribly sorry, but there’s nothing we can do.’ In fact, all along they could have done many things. For example, they could have moved to strengthen the power of the ACCC to ensure that things were being done properly and fairly in the market. They could have restored and they still can restore the Trade Practices Act to its former glory—in particular, section 46—so that the ACCC has some prospect of securing prosecutions for misuse of market power.
Indeed, during question time last week, the member for Hunter urged the Treasurer to sign a letter which the member had drafted—he had done the hard yards; he had drafted the letter—that would have given the ACCC the power to formally monitor and investigate petrol prices. That letter authorised the ACCC Chairman, Graeme Samuel, to monitor prices, costs and profits relating to the supply of goods and services by refiners, wholesalers and major retailers of transport fuel pursuant to section 95ZE(1) of the Trade Practices Act. The Treasurer refused to do it. But, if he is concerned and if the government is genuinely, sincerely concerned about the impact of high petrol prices on Australian families and on business, he would be strengthening the Trade Practices Act to rein in market power abuse and strengthen the ACCC’s powers to intervene in petrol pricing.
Indeed, it is this government which took away the power to formally monitor petrol prices. The Treasurer says, ‘The ACCC monitor petrol prices.’ What they actually do is go and look at the noticeboards and see what the price is, write it down and collect all these statistics from around Australia which are absolutely useless. Families struggling with higher petrol prices want more than a quarterly report on what the retail price is. What they want the ACCC to do is not to look at the retail price but to look behind the prices to guard against excessive profiteering. If the Treasurer were to reinstate formal price monitoring and investigative powers under the Trade Practices Act, that is what we would get. That is what Australian families want and are entitled to. So the first thing this government could do about petrol prices is to strengthen the Trade Practices Act to rein in market power abuse and to strengthen the capacity of the consumer watchdog to intervene in petrol pricing issues.
Then there is LPG. I welcome the government’s announcements concerning LPG. But it is ironic. We need to recall that, first, the LPG industry took the full brunt of the GST. Back then it had no excise at all. LPG attracted no excise; there was no excise to reduce. It took the full 10 per cent hit—the 10 per cent brunt—of the GST. Then the Prime Minister decided to put an excise on LPG for the first time. So this Prime Minister has been working against LPG in the market these past five years rather than assisting a greater take-up of LPG. It is entirely hypocritical of him to now pose that as the solution to the significant issues we face. LPG is a great opportunity for Australia, no doubt about it. It is an indigenous Australian fuel. We have plenty of it. But the government these past five years has been undermining the take-up of LPG in this country.
We also ought to talk about natural gas. I believe we ought to think of hydrogen as an ultimate solution but, in the short term and in the medium term, natural gas has a great deal to offer. For a start, we have enormous reserves of it: 150 trillion cubic feet. Our natural gas is easily convertible into liquid diesel which can go straight into the diesel engines of motor cars as they stand, without modification. So there are plenty of opportunities for gas to liquids conversion. In fact, around five years ago, the then minister for resources, Senator Minchin, appointed a gas to liquids task force to investigate the feasibility and benefits of establishing a gas to liquids industry in Australia. But, five years later, no action has been taken. The government has been sitting on its hands. The fact that it has been speaking with a forked tongue in relation to LPG was exposed in the parliament today when questions to the Special Minister of State revealed that he as minister thought that LPG was not really a suitable fuel for the Commonwealth vehicles driven by politicians, public servants and so on. So the government stood exposed through the revelation of that correspondence.
We have a situation where the price of petrol has effectively doubled in the last two years. Given these circumstances, I believe it is quite inexcusable that the Howard government has failed to act on Australia’s growing import dependence and its impact on energy security and fuel prices. We are in the process of moving to import 60 per cent of our oil. For the past seven years, we have been using oil three times faster than we have been finding it. Given this, a do-nothing strategy is not an acceptable option. It sells Australia short and, if it continues, it will seriously damage regional Australia. Amongst the things that we can do about it, the member for Bendigo referred to the fact that it would be useful if we gave up some of the foreign policy adventurism which we have seen in Iraq, which has been so catastrophic on so many levels and which has been one of the factors in increasing international oil prices. But, with international oil prices so high, as I have outlined previously we need to increase competition in the Australian petrol retailing industry.
Going back some time, Labor produced a plan which would put downward pressure on petrol prices, seeking to break down the power of the big oil companies and help consumers. That plan included amending the Trade Practices Act to guarantee independent wholesalers and retailers access, on fair terms, to fuel supplies from the terminals of the major oil companies; allowing independent wholesalers and retailers to bargain collectively when seeking fuel supplies from the terminals of the major oil companies; and outlawing predatory pricing under the Trade Practices Act and strengthening section 46 to stop the abuse of market power, thereby protecting independents against the market power of the big companies. That is the kind of thing we believe could have put downward pressure on petrol prices.
In my view, we need to use these huge gas reserves to produce liquid based transport fuels. Using current technology, we could transform some of those offshore gas reserves into what amounts to a limitless supply of transport fuel, which is commercially viable. If we take advantage of the riches we have, we can insure Australia against physical supply shocks and give this nation some genuine energy independence. The government ought to be making Australia a place of gas to liquids production. We should not be sitting on our reserves while the price of our transport fuels continues to skyrocket, nor should we be exporting everything we can find and letting other countries do the value adding, guaranteeing that our current account and trade deficits will continue to rise.
We need to do more to promote biofuels, LPG, compressed natural gas and synthetic fuels produced from gas to liquids technologies. Back in June I commended to the House a paper produced by the Australian Petroleum Production and Exploration Association. The particular parts of that paper which I think are interesting and significant are those which go to the use of gas, in the paper’s own words, ‘as a platform for prosperity’. The paper points out that gas is becoming increasingly important in the global energy mix, that Australia has abundant natural gas resources and that these provide great opportunities for us, as gas is a cleaner and less greenhouse intensive fuel than coal. The paper notes that, even though significant gas reserves have been discovered, many remain undeveloped. It goes on to say that there is great potential in the development of an Australian gas to liquids industry.
This can provide us with a viable additional source of hydrocarbon liquids generated from our large gas reserves. The opportunity exists to develop new Australian LNG projects of between 30 million tonnes per annum and 50 million tonnes per annum by the year 2015. The commercialising of gas technologies would enable us to move into the area of electricity generation and also to increase the conversion of gas to various forms of liquids. There are, of course, forecast capacity additions to Australia’s alumina refining capacity, and growth in gas fired electricity generation would be very useful given that context.
In the remaining few minutes available to me, I want to turn to the other elements of the amendments moved by Labor to this bill. These amendments are in support of Labor’s blueprint for the Australian fuel industry released by the Leader of the Opposition back in October of last year. At the time, the opposition leader indicated that it was Labor’s aim to develop a diversified Australian fuel industry—one which would make Australia a more self-sufficient country. The Leader of the Opposition said:
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 ...
We need national leadership to develop:
… … …
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.
Labor believe that, if we look ahead 10, 20 or 30 years, it is highly unlikely that we will be able to source a consistent supply of petroleum at a sensible price when we have ever increasing global demand and something like 57 per cent of the world’s proven oil reserves in the Middle East, which is clearly in an unstable situation. If we have major disruptions to oil supplies occurring in the decades ahead, it is not reasonable to expect that foreign countries will be giving priority to supplying Australia’s needs. We are in a situation of falling production and higher demand, given that clearly prices will continue to go up. We need a government which can see the writing on the wall, can foresee the soaring demand and can foresee the threats to supply, and a government which is prepared to put the national interest first and prepare Australia for these changes.
In the past three years we have seen global oil prices triple. The era of cheap oil is over. Given that, the government needs to do some hard thinking. The Prime Minister earlier this year said, ‘I can understand the anger of motorists but prices are out of our control.’ Back in June last year the Minister for Industry, Tourism and Resources was asked by my colleague the member for Melbourne, who has joined us in a timely fashion, if the government had done any modelling of the impact of future peaks in oil prices on the Australian economy. The minister provided a five-word answer—at least we can give him credit for a brief answer—and it was, ‘No, no, no and no.’ This is simply not good enough.
This is a national and urgent priority. We need to do the hard work to enable Australia to develop an indigenous fuel industry to get rid of our dependence on imported oil. We need to do the right thing by the environment, to do the right thing by regional Australia and to do the right thing by securing Australia’s national sovereignty and energy independence. (Time expired)
I too rise to speak on the Petroleum Retail Legislation Repeal Bill 2006, particularly as I have received many calls in my electorate regarding petrol prices. Every day, Australians are suffering as petrol prices continue to climb and every day, for months, the government has been insisting there is nothing it can do about it. The government has now admitted that that is not true at all. The government has invested approximately $1.5 billion of the $100 billion that it will raise in association with the fuel excise over the next eight years to subsidise the uptake of LPG fuel. We welcome the announcements that were made on LPG yesterday.
Is the government expecting that the 40,000-plus vehicles within my electorate of Hindmarsh will be converted to LPG and ease the burden on families’ budgets? Is this the central idea of the Australian government’s would-be fuel based credibility and the policy rocket that was the Prime Minister’s half-hour statement to parliament yesterday? Investing $1.5 billion of $100 billion from fuel excise is not a substantial investment; it is a token effort to suggest that they care—that people’s views that the government could not care less about people’s financial pain is not correct—and that they are governing and actually doing something.
Petrol prices of $1.45 per litre in the electorate of Hindmarsh were never inevitable and neither is the forecast of $1.80 per litre. If the government acted with the national interest in mind, Australian motorists could look to a time when fuel prices would not rocket up along with the world price of oil. Indeed, if the government had acted earlier, we would probably right now not be paying anywhere near as much as we are. Urgent action needs to be taken with regard to petrol prices and, more generally, to our fuel supply. Australian families demand it, the economy demands it and the environment also demands it. These considerations must be at the forefront of legislative and policy reform.
Families are already struggling and under the pump from the new, extreme and unjust Work Choices laws and the recent seventh-consecutive interest rate hike that is causing their mortgage bills to bulge. Add to this skyrocketing petrol prices and it can be seen very quickly that things are not looking too good. Let me put the scenario another way: does the government think that it is fair for pensioners to refrain from driving to the doctor’s or to the shops because refilling their tanks is becoming prohibitively expensive? I hope not, but unfortunately anecdotes of exactly this situation continue to roll into the office as the price of petrol continues to soar through the roof. These consequences are bizarre, true and certainly not acceptable.
This government is severely out of touch with ordinary Australians—that is, those Australians who do not have a lazy $50 extra to continually put towards their skyrocketing petrol bill. An extra $50 per week for the petrol bill may not seem like much for some people, but I can tell the House that the people in Hindmarsh feel the pinch. It is not true that there is nothing the government can do about petrol prices. The proof of that can begin with this very bill currently before the House.
The government’s response to the current situation should be at least two pronged: (1) renewable energies and their continued research, development and promotion within the Australian community are essential for Australia’s long-term energy interests and (2) competition within the petrol retail sector must be encouraged through the continued involvement of independent small proprietors, even if not limiting the market share of the big oil companies. We need to protect the independent retailers from the multinational oil companies.
For many years the Australian government has had a choice about whether to be at the cutting edge of renewable energy and biofuels or whether to pretend everything is okay and that a potential increase in the price of fossil fuels would simply be a transitory thing that we could ride out over time. When the rest of the world wanted action from Australia in 1997 through the signing of the Kyoto protocol, Australia insisted it had to be allowed to increase greenhouse gas emissions, with the government refusing to accept the science of climate change. However, it could have invested in research to deliver alternative fuels and reduce our reliance on petrol. In other words, the situation Australians find themselves in today at the petrol bowser is the legacy of a refusal to make Australia the clever country on this issue almost 10 years ago.
Instead of leading the world by developing technologies which would boost the Australian economy and place us at an advantage compared with other nations, we are the international freeloader, contributing more greenhouse gases per capita than any other nation. What is more, we are paying through the nose to do so with high petrol prices. What a ridiculous position we find ourselves in: paying record prices at the bowser for the privilege of emitting greenhouse gases—all because of this government’s lack of direction and leadership to do something meaningful and sustainable for Australian families.
The government have had more than 10 years to get something done about this. It is not as if 10 years ago it was impossible to see that the cost of oil would one day be a choke on the Australian economy and family budgets if action were not taken. The writing has been on the wall for some time and the government have been dragging the chain, making excuses instead of taking responsibility. Unfortunately, we are paying the price now of government inaction.
Petrol prices are rising more quickly than oil prices. Lobby groups estimate that, given the cost of crude oil, we are being overcharged approximately 20c per litre for petrol. The Royal Australian Automobile Association identified this phenomenon after Hurricane Katrina. The cost of unleaded petrol, which was tracking at a reasonably consistent margin over crude oil, suddenly took on the appearance of the Glass House Mountains, towering over a comparatively mild fluctuation in the price of crude. That was over the period of August to November 2005. We can see a similar phenomenon occurring since approximately March this year. Crude oil is represented as being relatively static around the $60 mark, but the cost of unleaded around Hindmarsh has not represented this.
The profits being reaped by the oil companies are astonishing. It has been stated that Shell Australia’s petrol refining and marketing profit jumped from $43.5 million in 2004 to $300 million in 2005. It has also been suggested that Caltex’s forecast profit has been revised upwards to $420 million. These profits are coming out of the pockets of ordinary Australians battling to cover many increasing, everyday, necessary costs.
Australians are concerned by what appears to be collusion within the petrol retail sector. How is the sector viewed by the public when virtually all retail outlets are owned by a few big businesses? The public may well be more receptive to the sector by the demonstration of independent retail outlets on occasion undercutting the big chains. This is evident from time to time in Adelaide, although less and less so. It is sad, but the occasional petrol stations that were typically a number of cents under the big BP, Shell and Caltex chains are increasingly disappearing. Whereas in the past there may have been several scattered around Adelaide’s metropolitan and western suburbs, right now I can only visualise a couple.
I am informed that when FlyBuys were introduced approximately 15 years ago there were approximately 430 individual self-franchisees. Today there is only one across Australia, and that franchisee is Coles. Caltex is little different, with Woolworths being its sole franchisee. Oil barons and retail outlets, I would suggest, undermine the potential for competition and, to some extent, make our response to collusion more difficult. Who are they colluding with? Themselves—one hand with the other.
Only now is the government starting to show some interest in the pocket pain that motorists have been suffering over recent years as a result of its remarkable lack of vision. Even now, with yesterday’s statement on LPG conversion—and, as I said, we welcome that statement—and, more to the point, with the bill currently before the House, the government is only showing a very slight interest in being serious about the matter by repealing an outdated petrol retail regime. We need much more than this. We urgently need investment in a diverse range of energy sources, not just the band-aid solution of blending in a little ethanol to lower the price. We need long-term strategic thinking that will ensure our economic and energy security—something which has been lacking for the past 10 years.
Since petrol derived from foreign oil is a key input into so many other areas of our economy, there is a strong sense of urgency with which we must approach this matter, as well as a sense of importance. The good people of Hindmarsh—for example, pensioners—constantly let my office know that the price of everything is going up. Their income cannot keep pace. Superannuation indexing is not adequate when you take petrol into account. Some people can get by, but many are feeling the squeeze. Few have deep pockets like the member for Wentworth, but they are all intelligent enough to understand that petrol, being a key input, is the primary driver of the increasing cost of living. It does not take much more thought for them to see that, if we were not so dependent on petrol derived from foreign oil, we would not be in the situation we are in now.
This in turn requires that the alternative fuel industries have a sustainable base. The Petroleum Retail Legislation Repeal Bill 2006 is what one could loosely term an attempt at structural reform, but much more needs to be done in Australia if we are to be serious about petrol prices. We could cop out by saying that there is nothing we can do about it, like the government has been doing for the past 10 years, or we could tackle the issue head-on and ensure that all levels of the fuels industries—whether in the area of generation, extraction or retail—have a foundation with the interests of Australian motorists at its heart. Australians do not elect governments to tell them in return that everything is too hard.
I suppose one thing that this government has done on the petrol issue is tell Australians that a little ethanol can be added to their petrol tanks and that will somehow lower the price. This is probably true to some extent. Diluting petrol with ethanol achieves a little, but it can only get us so far. It still does not change the fact that, at least for the near foreseeable future, Australia will still be dependent on Middle Eastern oil and, indeed, foreign oil generally—that is, even if there is a little ethanol in our petrol tanks, it does not change the fact that a hike in world oil prices will still have an undesirable impact on the price at the bowser.
All in all, ethanol is just one tiny element in the more strategic and broader issues relating to petrol industry reform. The government must ensure that, in the long run, Australian motorists have a fuel supply with a sustainable price and product. The fact that some members of the government have this fixation on ethanol only typifies the shallow analysis and effort that has been put into solving this problem. It is better than the effort of most other members of the government, who say that nothing can be done, but it still falls well short of the mark of what Australia needs. We would not be in this place today debating the issue like this if the federal government had exhibited some form of leadership and long-term strategic planning by investing in research and development for alternatives. Natural gas, ethanol and biodiesel are not concepts that have been around for only the past short while. Labor has been talking about these alternatives for years, and the work done by the Hawke-Keating government is but one example of the work that was done to encourage these industries.
The incentives to invest in these industries, whether that investment is made by the petrol manufacturer or the retailer to encourage take-up of alternatives, need to be accelerated. Labor’s alternative fuels blueprint brings this to the fore. The fuels blueprint shows that, in fact, it is possible to do something meaningful about the high price of petrol. These measures can have a long-lasting effect. The blueprint targets investment in several alternative fuels rather than putting all of our eggs in the ethanol basket. It also recognises that there are measures that can be put in place by the parliament to strengthen competition laws so that petrol is sold at a price that consumers—Australian families—can afford. It simultaneously pursues environmental and economic objectives.
The Petroleum Retail Legislation Repeal Bill 2006 perhaps represents one of the basic steps required to set up the conditions for a sustainable alternative fuels industry that would help Australian families and pensioners breathe a little easier. But it would be foolish to think that all we need to do is repeal the old Petroleum Retail Marketing Franchise Act and Petroleum Retail Marketing Sites Act. Much more work needs to be done and the government cannot stop here. I will elaborate on this in a moment.
I want to return to the point I made earlier regarding how this government has taken so long to start the ball rolling on petrol prices. The present Petroleum Retail Marketing Franchise Act and Petroleum Retail Marketing Sites Act constitute a system that is 26 years old. Times have changed significantly since then—in particular, energy markets do not look anything like they used to. Parliament must ensure that the laws on the statute books are appropriate to the time. That is where leadership comes into play. While it is true that the government made an attempt at reforming petrol retail in 1999, it never eventuated. Some seven years have passed since then, and one could be forgiven for thinking that the government has simply shoved it all in the too-hard basket. Indeed, this seems to be exactly what happened.
When attempts were made around 1998 and 1999 to reform the petrol retail industry, nothing ever became of it because the government failed to facilitate the establishment of a new Oilcode. The result has been that, for at least the past seven years, consumers—Australian families and pensioners—have been suffering because of the government’s incompetence and lack of leadership in developing a new Oilcode. History credits governments that have the courage to do things for the good of the nation, not governments that weasel out of matters because they are too hard. Even now, the government keep telling Australians that there is nothing they can do to ease the impact of high petrol prices. It seems they tried to do something in the late 1990s, except that they gave up halfway through the process. Now they are finally coming around to acting, and Labor welcomes that.
The government is conceding that, in fact, something can be done about the high cost of petrol, as the bill before the House shows. For some time now Labor has been calling upon the government to bring about industry reform to help put downward pressure on the price of petrol. The establishment of the new Oilcode is a good start, but it is important to point out that it is only a first step.
Indeed, it is not sufficient to simply establish a new code and leave the rest for the oil companies to sort out. That is like saying that this new code will deliver lower prices because of the inherent benevolence of the huge oil companies themselves. But we all know that is not how it works. Oil companies are not in the industry because they want to help consumers by supplying them with cheap petrol; they are in it to make money. So there is a clear tension. Society needs to draw a line somewhere beyond which we say supranormal profits and anticompetitive activity, at the expense of ordinary Australian families, is unacceptable.
Competition is probably the one most critical thing that can help push petrol prices down. As part of its fuels blueprint, Labor has been calling upon the government to see that competition laws are strengthened. In particular, the Trade Practices Act provision concerning the misuse of market power urgently needs revisiting. Labor notes that the government has given a promise in this House that it will, in this regard, move to strengthen the Trade Practices Act. One hopes this promise, unlike the Prime Minister’s promise on interest rates, will be fulfilled, and we look forward to seeing what the government has to present in that regard.
Petrol is not just like any other commodity. It has a peculiar place in our economy, being a key input into so many sectors. This is a legacy of the government’s failure to invest in alternative energy sources, as I have already mentioned. But also, quite importantly, exactly because of this position, competition laws too must adapt to reflect this. Anticompetitive conduct in any market is bad, but the impact is particularly compounded when it occurs in the petrol industry. So, far from being an optional extra, meaningful reform of the petrol industry must also beef up the misuse of market power provisions in the Trade Practices Act as well as enhance the powers and terms of reference of the competition watchdog, the ACCC. Our economy is in such a precarious position in relation to energy that these changes to competition laws are far too important to be omitted.
Australian families and pensioners are desperately looking for a solution that will lessen their dependence on Middle Eastern oil, and foreign oil more generally. The repeal of the Petroleum Retail Marketing Franchise Act and the Petroleum Retail Marketing Sites Act and the introduction of the Oilcode are a start, but by no stretch of the imagination is that sufficient. Trade Practices Act amendments to beef up prohibitions on anticompetitive conduct are also required. More generally, a strategic approach to diversify our energy sources is required, and that is good for the environment as well as for the pockets of our people.
Labor has this holistic vision, but unfortunately this government do not appear to have a similar approach. Their dragging of the chain, taking seven years to revisit the petroleum retail framework, and even then only to come up with a partial response, says much about how keen they are to do something that can deliver sustainable outcomes. What else will be forthcoming? Their record here too is probably their guarantee. As I said, we need a two-pronged approach. One is to ensure that we develop renewable energy through research and development. The other is that good competition within the petrol retail sector and the continuation of petrol independence are very important. Unfortunately, under this government, I see neither of those two things happening.
I want to speak on the Petroleum Retail Legislation Repeal Bill 2006 for a couple of reasons. The first reason—and it is one I will come back to later in my speech—is that the high cost of fuel is the No. 1 issue for people in my electorate right now. That is the case right across Australia, but it is particularly a problem for people in regional electorates like Capricornia, where long-distance travel between rural communities and major centres is a fact of life. The second reason I want to speak on this bill is that the need for reform of the petroleum retail industry has been around as an issue since I entered this place in 1998. I have been referring to it in speeches on petrol prices ever since that time, so I thought that I should participate in this debate now that the government is finally making some progress towards that outcome.
Consumer confidence in the operation of the fuel industry is a real concern for my electorate. The record high petrol prices we have today might be a relatively recent problem for most Australians, but the question of petrol prices and how they are set by fuel companies and retailers has been a burning one in Rockhampton for as long as I can remember. For some reason that no-one has ever been able to get to the bottom of, the price of a litre of petrol in Rockhampton is always higher than almost all of the other comparable provincial centres in Queensland. As a result of those discrepancies apparent in Rockhampton, I can remember speaking about the need for more competition and greater transparency in the fuel industry in my first term in the late 1990s.
At that time, Labor was calling on the government to implement the kind of reform that these bills represent—or at least these bills represent part of the package of reforms that we identified as necessary to establish a new and more effective system for regulating the behaviour of players in the fuel industry. So after five or more years, here we are finally debating the first part of the government’s plan for the retail fuel industry—a long overdue plan that we hope can promote competition in the industry by protecting independent operators and small operators and reduce the ability of the major oil companies to force other players out of the marketplace. For Labor, these reforms have always been about increasing competition and the flow-on of that to consumers—that is, lower petrol prices.
This bill seeks to repeal the Petroleum Retail Marketing Franchise Act and the Petroleum Retail Marketing Sites Act. Both of these acts date back to 1980, when the structure of the petroleum retail sector was very different to what it is today. The changing structure of the industry means that those acts now apply to only a small proportion of petrol retailers, and over 50 per cent of the industry by volume is now beyond the reach of the legislation. Those laws were introduced to address an imbalance in market power between the major oil companies—those engaged in both refining and marketing fuel—and their commission agents.
In an effort to prevent the majors abusing their market power, the sites act provided for a limit on the number of service stations the major oil companies could run directly, instead requiring them to set up franchise arrangements. The franchise act complemented that act by providing for safeguards to secure the positions of franchisees in their negotiations with the refiners and marketers. It was expected that the combination of those measures would encourage the entry of small businesses into the retail petroleum market. Twenty-six years on, the changes in the industry have made those acts largely redundant. First, it was the major oil companies that got around the regulations by using multisite franchise arrangements. And now, with over 50 per cent of petrol sold through partnership arrangements with supermarket chains, there is effectively a two-tier system of regulation because the two acts do not apply to them. As a result, different market participants are subject to different protections and regulatory requirements, and some are discriminated against relative to others.
Labor supports the repeal of the Petroleum Retail Marketing Sites Act and the Petroleum Retail Marketing Franchise Act, which this bill seeks to effect. But the repeal of these outdated acts is only the start of putting in place the regulatory regime that is 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 is for the government to introduce the Oilcode as a mandatory industry code under section 51AE of the Trade Practices Act.
The Oilcode represents a significant improvement in the regulatory regime applying to the retail fuel sector. It will create a more equal playing field, with all market participants subject to the same regulatory requirements and able to access the same protections. It is what Labor have been calling on the government to achieve for the last five years or so. We have said all along that we would support the government in its efforts to repeal these acts and to reform the fuel industry as long as it implemented the Oilcode to address the gaps in the existing regulatory regime to protect smaller operators and consumers. It has taken the government all this time to finally bring before the parliament the reform package it identified as necessary, and Labor agreed was necessary, eight if not 10 years ago.
I have spent this time going through the technicalities and the history of this bill because it is quite instructive as to the government’s approach and its failings when it comes to putting in place important reforms that can make a difference to people’s lives. The fact that it has taken 10 years to get this set of reforms in place—and there is still some way to go in truly addressing deficiencies in the Trade Practices Act in this area—shows that this government is just coasting along. The government is happy to spend the dividends of the economic prosperity brought about by the resources boom but it is too lazy to do the things that it needs to do to make life easier for Australians now and to secure our prosperity into the future.
Madam Deputy Speaker, you could not get a more obvious example than petrol of how the government’s neglect and complacency has impacted on people’s cost of living. Fuel is an essential commodity and, because of that, all Australians are held to ransom by high fuel prices. We need the fuel, so we pay the price, whatever it might be and however hard it hits the family budget. In those circumstances, you would think that a government would be doing everything in its power to avoid excessively high prices. I say ‘excessively high prices’ because I acknowledge, like all members here, that there is a component of the price of fuel that is beyond the power of this government or any government to control, and that is the world oil price.
Australia is part of the world market for oil and is subject to the variations in the price of oil just like all other countries. But there are other factors that feed into the cost of fuel at the bowser that cannot be explained by the cost of oil on the world market. It is now almost a year since Hurricane Katrina tore through the south of the United States, destroying New Orleans and shutting down oil production in the Gulf of Mexico. We can all remember the impact of that here in Australia and how immediate it was. Service stations in Rockhampton put up their prices within a day of the hurricane’s hitting. While I do not deny that the disruption to oil supplies out of the USA had an effect on the world oil price, like all motorists I get suspicious when the effect at local service stations in Queensland seems to be almost instantaneous.
At that time, there were widespread accusations of profiteering and price gouging by the oil companies, based on the gap between the world crude oil price and the price for refined petrol in Australia. It was Labor that identified the gap back in September last year while the government, and particularly the Treasurer, sought to shift the blame and refused to act. There is a similar reaction from motorists when they see the price of petrol go up on Thursday and fall again on Tuesday, after the weekend has passed. Of course, this opportunistic variation in prices is even more pronounced over long weekends. But again the Prime Minister and the Treasurer take Australian motorists for mugs. They pretend it is not happening and refuse to do anything about this blatant rip-off of struggling motorists.
Their mantra at the time of Hurricane Katrina—and still today—is that we are at the mercy of the world oil price and the government cannot do anything about the cost of petrol. There is a difference between ‘cannot do anything’ and ‘will not do anything’. We think that, for this lazy government, it has been more a case of ‘will not do anything’. It is not true to say that the government is entirely powerless when it comes to putting downward pressure on fuel prices. The government can regulate the industry so that competition is genuine and pricing is transparent. They can strengthen section 46 of the Trade Practices Act to address the misuse of market power in the industry. The government can do as Labor has been asking for weeks and give the ACCC the power it needs to properly investigate petrol prices in this country. It can also take steps to encourage the investment and innovation that can lead in the medium to long term, to the establishment of an Australian fuels industry.
The government can start down that track by supporting the excellent second reading amendment to this bill moved by Labor’s shadow minister for resources. If the government is really serious about taking a strategic view of Australia’s need to establish its independence from imported oil, and the opportunities that exist for that to be achieved, then I suggest it adopt the proposals set out in Labor’s blueprint for developing the Australian fuel industry. You need look no further than Labor’s blueprint on fuels to see the difference between Labor and the government on the issue of fuel prices and fuel security. The Prime Minister came into parliament yesterday with his package of measures to offer motorists some relief from record fuel prices. ‘Fuel prices are high,’ we were told, ‘and increasing demand means that things will only get worse. Australia needs to reduce its reliance on imported oil and develop its own fuel industry based on our natural gas reserves and renewables.’ Funny, but I was sure I had heard that before. Of course, these were the points that Kim Beazley was making back in October 2005 when he outlined Labor’s blueprint.
In the lead-up to that, the shadow minister for resources and I spoke on the MPI debate on 14 September 2005 and raised similar points to those expanded upon in the blueprint. The difference we see here is that Labor is proactive, not reactive, when it comes to addressing the problems that are making life difficult for Australians. We look to find solutions, not to shift blame like the Prime Minister and his Treasurer. Labor look to address what is in the national interest and not just the narrow political interests of the coalition parties. So Labor have been out there for a year putting forward our proposals to try to ease the pain of high fuel prices for Australian motorists now and into the future.
In the short term, we repeat our call on the Treasurer to reinstate formal price monitoring and investigative powers under the Trade Practices Act. It is not good enough for the Treasurer to say that the ACCC is monitoring prices when what he means by that is the ACCC simply writes down the retail prices of petrol around the country. Motorists want the ACCC to do more than just note down the prices of petrol; they can do that for themselves from any website. They want the ACCC to be able to look behind the prices, including the refiner margins, to give consumers confidence that they are not victims of excessive profiteering by the oil companies. The Prime Minister’s statement yesterday made no commitment to give the ACCC those powers to stop the rip-offs.
The other thing to say about the Prime Minster’s statement yesterday is how cobbled together it is starting to look. We heard in question time today that it was only a month ago that the Special Minister of State, Gary Nairn, was telling another MP that LPG could not be used in the government fleet for a number of reasons, including its unavailability in many parts of the country. A month later and a panicking Prime Minister is telling the Australian public that conversion to LPG is the answer to their problems with high petrol prices.
While John Howard was cherry-picking that initiative from Labor’s fuels blueprint, he should have had a good look at our other proposals. They are not about grabbing headlines but about building Australia’s self-reliance in this area so that we can face an uncertain future secure in the knowledge that we have our own supply of transport fuels. Our reliance on overseas oil, particularly from an increasingly volatile Middle East, poses a real challenge to our national security and prosperity. While the government has been fighting over who gets to be Prime Minister for the last year, we have been putting our minds to that challenge.
Labor’s proposal includes: a re-examination of the depreciation regime for gas production infrastructure; allowing the selective use of flow-through share schemes in the gas, oil and mineral exploration industry; conducting a feasibility study into a gas to liquids fuels plant in Australia; making alternative-fuel vehicles tariff free by cutting up to $2,000 from the price of current hybrid cars; and encouraging a sustainable ethanol industry. These are just some of the initiatives that Labor has identified in the blueprint to help Australia become more self-sufficient in the area of transport fuels and to help ease the burden of high petrol prices on motorists.
There are enormous challenges ahead for Australia as the 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 the conversion of natural gas and coal to diesel. As a representative of a regional and rural electorate, I am always interested in the potential for a large-scale ethanol and biofuels industry in Australia.
What I do not want to see for the people in my electorate are ever-rising fuel prices and an increasing reliance on overseas oil, with our future prosperity and security held to ransom as a result of this government’s lack of initiative.
Given that the debate on the Petroleum Retail Legislation Repeal Bill 2006 has been going on for some time, we know that it essentially deals with the retail aspects of petrol and changes that have occurred in the industry which go back even further than the last 10 years. It is a very important bill because it does, at last, recognise significant changes to the industry and the need for us to repeal legislation that has been in place and replace it with a proper Oilcode that will more comprehensively cover the industry.
I am particularly moved to speak on this bill because, like many other members in this House, I am aware that, behind all of the regulatory issues that are of concern, there are two even more pressing issues, and they are all interrelated. Australians in my electorate, as elsewhere, are suffering from the current high petrol prices. Hand in hand with that, people are increasingly fearful that, as a country, we cannot afford to remain dependent on foreign fuel, which predominately comes from the unstable Middle East. Many of the speakers on this side of the House have already canvassed some of these issues. As representatives in this place, we all feel very acutely the pressures that are on families in our electorates. Action needs to be taken because the current pressures on those families is, I think, coinciding with the need for us to take some national decisions and some strategic decisions to ensure that we secure our future fuel needs without such heavy reliance on other countries.
I want my contribution to touch on these three aspects: the change to the retail and regulatory regime, steps that might provide some relief from the current prices, and investments that need to be made now in alternative fuels and technologies, as set out by the Leader of the Opposition in October last year—well before the latest price hike really started to bite in our community.
As we all know in this place, constituents are having to tighten extensively their budgetary belts and many are drastically rearranging aspects of their day-to-day life to take account of the huge impact that high petrol prices are having on their family budgets. We have all read stories in the newspapers and many of us would have had representations from our constituents about these pressures. For example, young people who have not been driving for very long, who are in their first job or studying and who do not have a lot of extra money or disposable income suddenly find that the income they are earning in their part-time job is not sufficient to cover even their petrol needs. Perhaps they have to make a decision that they cannot be involved in a sporting activity because it costs the extra amount of money that they are now paying in petrol.
We can all see that, with the price of petrol at $1.40 and more per litre, the average tank of petrol now costs over $70. This is having a huge impact on people’s lives every single day. I can give one example—although there are thousands and thousands of them across the country—of a family of five who live in my electorate of Gellibrand, in Melbourne. This family, like many others, has two cars. They have had to rearrange their entire transport strategy as a result of the ever-increasing petrol prices. The mother, who drives further than the father to and from work each day, has had to swap cars. The family has three children and, because two other children often travel with them, they drive a large patrol car. But it guzzles petrol and cannot be used to drive to and from work anymore because it is far too expensive. However, even the smaller car goes through about $60 a week in petrol, which is up $20 from the $40 a week that it cost to fill it less than a year ago. For a family of five that is juggling to make ends meet as it is, an extra $20 a week is not an insignificant amount.
Public transport is not a real option for this mother and this family. She drops off kids to school on her way to work. She does the shopping and other errands on the way home. Like many mothers in our community and many parents generally, it is simply not possible for her to achieve any sort of work-life balance without using her car. Her partner drives a larger car to the local train station, as it is much more cost-effective for him to use public transport than to pay the high petrol prices to drive all the way to work. This takes an extra half-hour of travelling each way, each day. In addition, of course, the family are keeping a very close eye on their shopping trolley as they try and make up for the lost part of their budget each week.
I want to emphasise that we could pick almost any family across the country who could tell you the same story. There are very many people—whether they are students, people driving their first car or families who need the car to get the kids to and from sporting activities or to and from school and who often do a lot of running around in cars, as many in this place would know—for whom it is just impossible to adjust their lives in such a way that they do not use petrol at all.
Even if we can encourage consumers to moderate their use of petrol, is it really going to be possible for us to use that as the solution to high petrol prices? I do not think so. Increasingly, people are working further from their homes. The distance they are travelling to work is becoming an issue. The adequacy of public transport to get people to and from work as workplaces are becoming more dispersed is also a challenge. It is not realistic for us to consider that people will be able to do a lot of their day-to-day activities without cars. We would have to be thinking and planning a very long way ahead if we wanted to see that as a solution to the petrol problem.
But we also need to address the fact that this issue is not just for individual drivers and families. They may be able to soften the blow of these extra costs by changing their car use, which of course would be a good thing, but what alternatives are there for businesses, particularly those that rely heavily on transport? There is not just the transport industry as a whole but manufacturing, transporting products and parts between different sites. Obviously the distribution of many of our foodstuffs, let alone other, more manufactured goods, is a serious problem. We have to look at the way that we can sustain these industries with alternative fuels.
Although this bill might help in some small way to deal with price pressures, it is really just setting up a framework which is more realistic in terms of how the industry now operates. I must say that, without the changes that are being suggested by my colleague the member for Batman and that have been moved in his second reading amendment, this bill is not going to have as much impact as it could have.
One of the most obvious examples is Labor’s call for the ACCC to have the power to investigate price gouging without needing the Treasurer’s consent to do so. Many of the speakers in this debate have dealt with this issue. Even the member for Capricornia, who spoke before me, was talking about what I think everyone in the community is often curious and suspicious about: the way the prices change on the weekends and the way they seem to immediately change when there is an incident overseas. There is not a huge confidence in the community that petrol prices are set in a fair way, particularly the variations that happen week in, week out.
We in the Labor Party would like to give the ACCC powers in its own right to investigate potential cases of price gouging. This is an important proposal. It would be fantastic if the government could just see its way to accepting something that we have proposed. The ACCC might not find that there is extensive price gouging going on, but it might give the community much more confidence that the price increases that do occur are occurring for legitimate reasons rather than because distributors or retailers are making the most of world circumstances.
But first let us go through a bit of history on the legislation that we are repealing. The Petroleum Retail Legislation Repeal Bill 2006 that we are debating seeks to repeal the Petroleum Retail Marketing Franchise Act 1980 and the Petroleum Retail Marketing Sites Act 1980 and replace these two acts with an industry code known as the Trade Practices (Industry Codes—Oilcode) Regulations 2005.
When these two acts were originally made law, they were designed to counteract the market dominance of refiner-marketers, the oil majors such as BP, Caltex, Mobil and Shell, and the aim was also to encourage small franchisees into the retail industry. Since the 1980s, however, structural changes have rendered these acts outdated and ineffective. They cover only part of the industry—I was quite staggered to learn that they only cover about 50 per cent of the industry—and their regulatory coverage differentiates between different suppliers in the market, for example, the large franchisees and independent operators. Clearly this is not a workable position for this industry to stay in. The net effect of the current legislation is that different market participants are subject to widely varying regulation. It does not cover supermarket chains which have come into the market in such force in recent years.
So Labor is pleased that the new Oilcode will provide a more effective industry-wide regulation of the petrol retail sector, provide better protections and regulations than currently exist and bring the supermarket chains under a mandatory industry code of practice for the first time. All of this is welcome. The code will also establish standard contractual terms and conditions for petrol-reselling agreements between wholesale suppliers and retailers. These might sound like technical changes—if anyone is listening to the debate at this time of night—but I think that it is important, when we have this lack of confidence in the community that prices are set in a fair way, that we do everything we can to ensure that all of the players in the industry are competing on a level playing field where contractual terms are going to be dealt with in a regulated way. When these standards can build upon and strengthen relevant provisions of both the franchise act and the more general Trade Practices (Industry Codes—Franchising) Regulations 1998 and the relevant code of conduct, this does provide greater certainty and protection for all parties to fuel-reselling agreements. It includes the introduction of a nationally consistent approach to terminal gate pricing. These arrangements will improve transparency in wholesale pricing.
Importantly as well, the code is going to establish an independent downstream petroleum dispute resolution scheme to provide the industry with a cost-effective alternative to taking action in the courts. Again, this is important because, if we are able to find that there is some dubious activity going on in the industry, we need to have a way of being able to effectively take action. This will allow both industry players and consumers to have an effective way of being able to resolve these disputes. So although the code is not perfect it is a vast step forward. The bill has the support of the overwhelming majority of market participants, motorists and peak bodies. Labor support the bill but we do think it would be vastly improved by the amendment that has been moved by the member for Batman.
I will not read all of the amendment that is before the House, but I would like to emphasise a number of points that are raised in the amendment because I do think they are important. The first proposal is that we call on the government to require the relevant department, the Department of Industry, Tourism and Resources, to report annually to this parliament about the measures that have been taken and the progress that has been made to increase market penetration of alternative fuels such as ethanol, biodiesel, LPG and CNG, including the number and location of service stations and the names of companies offering these products on their retail sites. It is important that if we use the mechanism of reporting to the parliament then we can have the debate about whether or not it is going far enough, whether we can be doing more as this parliament or as a national government to encourage the increased reliance on these alternative options. We want to secure new investment in biofuel, LPG and CNG production and supply infrastructure in Australia. A report to the parliament about measures that have been taken and progress that has been made to achieve this would be a big step, and I think it would be a big motivator to the industry to make sure that they were actually actively participating and growing their industries.
We also ask the government to secure investment in new alternative transport fuel industries, including gas and coal to liquids. Just that one item moved in the amendment by the member for Batman summarises our view that there is much more that can be done to secure our long-term future in this area. While we must take all steps to relieve pressure now on families and drivers from the cost of petrol and the pain that they are feeling in their weekly budgets, we also have to think about those families 10, 20, 30 years into the future who will be in a far worse position if we do not make some decisions now to invest in these alternatives.
The amendment moved by the member for Batman covers a number of other alternatives that we would like the government to take but we are also concerned, as I have touched on already, that the Trade Practices Act be amended. There have been changes recommended repeatedly by both the Dawson report and a Senate committee in 2004 for the ACCC to have power, as I have already mentioned, to investigate petrol prices without the Treasurer’s consent but also to amend the abuse of market power provisions to make sure, again, that there is a mechanism that can be used effectively if those who are in a dominant position in the market abuse their position of strength.
Other members have talked about Labor’s proposal to conduct a feasibility study into a gas-to-liquid fuel plant in Australia and have also flagged in more detail some of the other options put forward in Labor’s fuels blueprint. We would like the government to embrace more of that blueprint. They have already, slowly, in this last week come to the table on a number of matters that were proposed in that, including looking at what can be paid and the assistance that can be given to consumers who might want to convert from petrol to LPG. We had proposed in the fuels blueprint that we look at making alternative fuel vehicles tariff free, cutting up to $2,000 off the price of the current hybrid cars and granting tax rebates for converting petrol cars to LPG. Further, we want to re-examine the depreciation regime for gas production infrastructure, and a number of different proposals have also been made for that.
So we call on the government to not close the door to these many other proposals. Labor has put a lot of time and thought into the way we can secure our future and make sure that future generations are not as dependent on Middle East oil. Of course, we all wish and hope that circumstances will become more peaceful in the future and we will not be considering the Middle East as an unstable region in the world, but I think it would be unrealistic not to at least plan for the risk that it might remain unstable for some time. In any case it is a good national strategy for us to be able to provide our own transport fuel to our own consumers and our own industry without the dependence on overseas fuel, if that is at all possible. In a country where we are blessed with so many resources, it seems crazy that we are not able to lead in terms of technology and conversion to these new types of industries.
The amendment that I have talked about covers our plans to: find more oil and use more gas in Australia, and I have gone through a number of things that we could do to assist with that; promote the use of alternative fuel vehicles; protect and promote the growth of ethanol, biodiesel, LPG and CNG; and strengthen the ACCC’s powers. I acknowledge that a number of these things are about the longer term solutions but we are anxious to urge the government not just to respond to the particular petrol price hikes now, although we call on them to do that, but also to set in place a clear strategy for how we are going to go forward into the future.
Labor has actually been out there leading the debate. It was last October—nearly 10 months ago—that Kim Beazley announced Labor’s Aussie fuels blueprint. It has that twin purpose of not just reducing Australia’s foreign fuel dependency but also developing existing and emerging alternatives. By contrast, the government has, for all this time, just been sitting on its hands. As we saw recently, the government has just belatedly come to the table and finally started offering some piecemeal solutions to this pressing problem.
But, unfortunately, as we often see with the coalition and their policy-on-the-run approach to these sorts of vital policy issues, what they have offered is too little and too late. The policy was hurriedly cobbled together as a political fix in face of political pressure that has been coming on them. Throwing money at Australians who can afford the up-front cost of converting their vehicles to LPG is a short-term quick fix which does nothing to put any downward pressure on petrol prices and does nothing to address Australia’s long-term energy needs. Quite apart from that, it does nothing for those many thousands of families in the community who may not be able to make that conversion and who in the meantime are going through—like the example of the juggling act of the family of five which I used at the start of my speech—the process of changing entirely the way they use their cars and their transport, how they drop their kids at school and what activities they do on the weekend simply on the basis that they cannot afford to be travelling any more than they absolutely must because of the costs that have increased so dramatically with the petrol prices.
In the absence of the initiatives that I have briefly outlined, and which are set out in the Leader of the Opposition’s fuels blueprint, John Howard’s fuel policy will do little for the overwhelming majority of motorists, who have no choice but to stay with petrol for the foreseeable future. And it will do nothing to reduce our reliance on fuel from overseas, particularly from the Middle East, at a time when it is in such unstable circumstances. I hope that the government will consider the amendment that has been moved by the Labor Party and that we will continue to have a proper debate about our long-term future, because that is the only way that we will be able to resolve this problem. (Time expired)
The Petroleum Retail Legislation Repeal Bill 2006 repeals two pieces of legislation that were enacted more than 25 years ago: the Petroleum Retail Marketing Franchise 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 review this legislation and remove it from the statute books, conditional upon the implementation of an Oilcode, which is an agreed set of arrangements between 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 this time. Labor supports the repeal of this very old legislation and the implementation of an Oilcode. Obviously, Labor also strongly supports the second reading amendment, which is a very wide-ranging amendment, that has been moved by the member for Hunter. That amendment covers alternative fuels, greater competition in the industry—greater competition is always welcome—and fiscal arrangements that the government might contemplate to implement an alternative fuels policy.
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 minimum terms and conditions 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 large independent retail chains and, even more recently, the supermarket retailers. The Oilcode that has now been brokered introduces, among other things, a nationally consistent approach to terminal gate pricing, which 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.
The current arrangements, as provided for in this legislation, do not constrain importers and supermarkets, which gives them a competitive edge. That is why I say that the legislation does even up the playing field and provides for a slightly more competitive environment. To that extent, it is a good move. The explanatory memorandum to this bill argues that consumers will benefit from these arrangements. It says in the impact analysis that the change has the potential to affect the structure of the retail petroleum industry and may also directly have an impact on consumers. It goes on to say:
... the ongoing use of inefficient business models by some in the industry may be to the detriment of consumers to whom the higher overhead costs are passed on through the price of petrol.
The impact statement associated with the explanatory memorandum argues that one of the benefits of this legislation is to improve the prospects of consumers—that is, to help contain the upward pressure on petrol prices in Australia. There certainly has been intense upward pressure on petrol prices in this country, and indeed all around the world. It is well known that the major source of that upward pressure has been very large increases in world oil prices. I have had the opportunity to examine the IMF world economic outlook. It provides for a very sombre forecast in relation to world oil prices. It is worth quoting:
Will the shock in fact persist? From a historical perspective, about one-half of the 1973–74 oil price shock proved enduring, while the 1979–81 shock was eventually completely reversed. While any long-run oil price forecast is subject to enormous uncertainty, both market expectations and an assessment of medium-term oil market fundamentals suggest that a considerable proportion of the recent shock will be permanent in nature ...
So the International Monetary Fund is forecasting that a reasonable proportion of the oil price shock of the last few years is likely to be permanent. That is a very disturbing forecast. We know in economics that the basic laws of supply and demand are such that, when the demand is so strong, it will, through higher prices, elicit extra production. But the IMF is indicating that, in its view, that lift in production will not be sufficient to remove this big spike in oil prices; therefore, much of the lift in oil prices will persist.
This takes me to an outlook for particular countries in the same report—it is interesting reading—that says Saudi Arabia, unsurprisingly, has 22 per cent of known oil reserves, Iran has 11 per cent and Iraq has almost 10 per cent, possessing the third largest oil reserves in the world. I am not sure that that is widely understood. It is sometimes claimed that Iraq is floating on a sea of oil and yet, despite possessing around 10 per cent of the world’s oil reserves, it contributes only 2½ per cent of world oil production.
The reason I raise this is that, while I have said in the past, and I acknowledge it tonight, that the main reason for high petrol prices in Australia is high world oil prices, one of the key reasons for high world oil prices is the invasion of a country that possesses 10 per cent of the world’s oil reserves. When the Howard government says it cannot do anything about high world prices, it should at least take responsibility for the effect of the attack on Iraq, and the ongoing war in Iraq, on oil prices in this country and the rest of the world. The coalition of the willing attacked Iraq against the expressed wishes of the United Nations and, as a direct consequence of that attack, world oil prices started their upward march. Commentators at that time were arguing that one of the benefits of attacking Iraq would in fact be a reduction in world oil prices. Some were so bold as to predict that world oil prices would fall to $US20 a barrel. They are now more than $US70 a barrel. Such was the folly of creating enormous instability in Iraq, which has flowed into the rest of the Middle East.
In January 2003, Iraq was producing more than 2½ million barrels of oil per day—2.549 million barrels a day. The average for 2005 was 1.878 million barrels a day and the average for the first five months of this year is 1.823 million barrels a day. So there has been a substantial cut in oil production in Iraq, which was already low as a result of UN sanctions and the oil for food program. Far from releasing huge amounts of oil onto the world market and depressing the price of oil, the attack on Iraq has had precisely the opposite effect and the Australian government was right up there in the coalition of the willing.
A paper by Gal Luft called Reconstructing Iraq: bringing Iraq’s economy back online, points to some of the realities. The Energy Information Administration of the Department of Energy in the United States suggests that Iraq has more than 112 billion barrels of proven oil reserves—which is, as I have pointed out, one-tenth of the world’s total. Other petroleum analysts, however, believe the country’s reserves might be twice as high as that. Of all oil-producing countries, Iraq is perhaps the least explored. There are only 2,300 wells in Iraq. Compare that with one million oil wells in Texas alone. Only 10 per cent of Iraq has been explored. You can see that one of the reasons the coalition of the willing was so eager to attack Iraq was that it is a country that is floating on a sea of oil and these foolish people believed that, as a result of that attack, they could get their hands on the oil and drop the world oil price. Instead, a terror premium is now attached to the international price of oil such that, far from being $US20 a barrel, it is well over $US70 a barrel. This government has to take its share of responsibility for very high world oil prices that are affecting the household budgets of everyday Australians.
It is reported that since April 2003, which is when the major hostilities finished in Iraq, insurgents have hit oil targets more than 220 times. So the insurgents are absolutely determined to ensure that Iraq does not get oil into the international market. Iraq today is considered the riskiest destination for foreign investment of any of the world’s emerging oil markets. Iraq gives a new definition to the notion of sovereign risk. Who would invest in oil exploration and production in Iraq when every day it is heading closer and closer to civil war?
There are tragic human consequences of the attack on Iraq and the insurgency that has followed. At least 1,000 people are dying every month in Iraq and it was only the other day, at last, that the Prime Minister admitted that perhaps things were not going all that well in Iraq. So many people have lost their lives from this foolish attack on Iraq and it is getting no better but rather descending towards chaos and civil war. The government cannot get off the hook and say, ‘It’s just the world oil price and we have had no influence on that.’ They have. This government has contributed to a terror premium on the price of oil which has flowed into the household budgets of people all around the world, including those in Australia.
What can be done now about higher petrol prices? Certainly, the outlook in Iraq is not very good. As I have indicated, the International Monetary Fund is very concerned about the prospects for world oil prices, figuring that, by and large, higher oil prices will persist. The room for the Australian government to manoeuvre, in terms of providing genuine relief to Australian motorists, has now been limited by its ineptitude over the last five or six years. The Australian economy now is smashing up against capacity constraints, with domestic demand outstripping the economy’s capacity to supply that demand. As a result of these constraints on the capacity to supply Australian domestic demand, there is now pressure on prices and on interest rates.
In its most recent monetary policy statement, the Reserve Bank pointed out that, even after having had the third interest rate rise since the 2004 election, it expects the underlying inflation rate—not the headline inflation rate, which includes bananas—to be sitting right at the top of the Reserve Bank’s range of two per cent to three per cent per annum. That is, the Reserve Bank expects the underlying inflation rate for the next two years to be three per cent per annum. That leaves the Reserve Bank virtually no room to manoeuvre. Having no room to manoeuvre is not a good situation to be in, when Australia has already suffered three interest rate rises since the election of 2004, when the government promised to keep interest rates at record lows—which it has not done in a most blatant way. In fact, the last seven interest rate changes have been upwards. If the government were to keep interest rates at record lows, it would have to go back well before the 2004 election to come anywhere near to keeping that promise. Instead, it promised that it would keep interest rates at record lows—and, since then, there have been three interest rate rises.
That means that this government’s room to manoeuvre in providing relief for motorists through the budget is very limited. The Reserve Bank’s language in its statement on monetary policy issued on 4 August and its observation that inflation in any event will be at least at three per cent per annum, which is at the top of the acceptable range, mean that financial markets are now tipping—with a more than 90 per cent probability—a further interest rate rise before the end of this year. There is, in fact, the real prospect of a fifth interest rate rise since the election—since the day the Prime Minister issued his promise that interest rates would be kept at record lows.
Looking at the last budget, we can see that it was moderately expansionary. How do we know that? We know that because the OECD, so often cited by the government in support of its economic policies, says—this is in the country survey on page 37—‘The fiscal stance implied by the latest budget projections is moderately expansive.’ It then goes on to provide tables that prove that point.
In its statement on monetary policy, the Reserve Bank quite clearly shows that demand continues to be very strong. It is worried about the look for inflation. It is worried about the impact of high oil prices on inflation. It says that domestic demand is growing strongly again and that budget tax cuts and spending increases have fuelled consumption. Here, it is worth my pointing to a statement of the Reserve Bank that says:
... the recent tax cuts and other fiscal measures announced in the Australian Government Budget, are expected to support growth in household income and consumption in the second half of this year. Despite the expected growth in disposable income, the household debt-servicing ratio is likely to rise further in the period ahead, since household debt has been growing at an even faster pace than income.
Importantly, it goes on to say:
Together with the recent increases in interest rates, this is likely to boost households’ interest payments.
That is why there is so little room to manoeuvre in terms of budgetary policy. If the government provides offsetting income tax cuts, it runs the risk of further interest rate rises. Therefore, motorists are being stuck with the government’s incompetence, they are being stuck with the government’s failure to invest in the nation’s future by easing those capacity constraints and they are being stuck with a government that spends like a drunken sailor. Just in the last budget, the government spent an extra $20 billion on outlays and saved only $2 billion. That is why we have to do whatever we can to relieve the pressure on petrol prices and on inflation. But now the room to manoeuvre is quite limited.
The PRRT collects a lot of revenue, but, again, if some of that were rebated to people through lower income taxes, those risks that I have described would materialise. That is why at the very least we need to look at long-term solutions, as proposed by the member for Batman, including converting to gas to liquids. That is why I commend and fully support the second reading amendment moved by the member for Batman and condemn the government for its incompetence. (Time expired)
I commend the member for Rankin for his passionate and withering contribution to the debate on the Petroleum Retail Legislation Repeal Bill 2006 this evening. The passage of this bill through the parliament is timely indeed. It comes at a time when rocketing petrol prices have inflicted pain at petrol station pumps for ordinary Australian households—a time when the price of living has climbed with inflation. The passage of this bill comes at a time when families are struggling with higher mortgage repayments following the latest interest rate rise under the Howard government’s stewardship. It comes at a time when Australians are burdened with record levels of debt and record proportions of household incomes are being swallowed up by home mortgage repayments. Clearly, this is not a time when ordinary Australians can continue to pay record high fuel prices. I am under no illusions about this, though I wonder whether a few members on the other side of this House still are, given the public statements they have made recently.
The debate about our energy future and the reform of the petrol retail industry, including the repeal of the two acts dealt with in this bill, have never been more important for my constituents in Lowe. The Petroleum Retail Marketing Sites Act 1980 and the Petroleum Retail Marketing Franchise Act 1980 are clearly past their use-by date—if ever they had one. These acts may once have had laudable public interest objects. In 1980 these acts compelled big oil companies to give up many of their retail sites or convert them into franchise operations. The ultimate intention of these acts was to minimise the control exercised by refineries over petrol prices in a market, apparently by increasing the breadth of the petrol industry structure and increasing small business participation.
Given the understandable cynicism many Australians hold towards the big oil companies, it may have made sense to maintain these tight regulations over the business structures they are able to adopt. Indeed, it seems that the economic orthodoxy still remains that government should limit the extent of vertical integration where there is a common ownership of the different stages of production of a product. Clearly, this is because of the potential for vertically integrated entities to engage in anticompetitive conduct, given their position in the supply chain, ultimately resulting in higher or unreasonable prices for consumers. Naturally, the accuracy of the premise underpinning restraints on vertical integration will depend on whether you are a supporter or an opponent.
Supporters of the Petroleum Retail Marketing Sites Act 1980 have sung its praises for placing restraints on the pricing power of the big oil groups. Opponents have spoken of reduced efficiencies in the petroleum industry. Despite prevailing attitudes seemingly supporting the former arguments about the potential misuse of vertical integration, a study in the US by John Gewecke titled Empirical evidence on the competitive effects of mergers in the gasoline industry from 2003 has stated that retail gasoline prices ‘tend to be lower if one company owns both refining and retailing operations than if they are owned separately’. Indeed, in a 2005 report titled Gasoline price changes: the dynamic of supply, demand and competition, the United States Federal Trade Commission stated:
The vast majority of the FTC’s investigations—
that is, into the petroleum industry—
have revealed market factors to be the primary drivers of both price increases and price spikes.
Contrary to expectations, the report also goes on to state that the price of petrol in those states that prevent refiners from operating retail outlets is generally higher than in states without those restrictions.
It would seem that, even at the best of times, legislation of the same ilk, such as that which this parliament proposes to repeal, has had little practical effect in alleviating the perceived problems they were introduced to address. Nonetheless, assuming that the Petroleum Retail Marketing Sites Act and the Petroleum Retail Marketing Franchise Act fulfilled their requirements in 1980 by maintaining the presence of small businesses and independent operators in the retail petrol sector, they seemingly have no role to play in the modern marketplace. This is a regulatory regime that is 26 years old, operating in an industry that bears absolutely no resemblance to the era for which it was designed. Of particular relevance is the fact that the Petroleum Retail Marketing Sites Act applies only to companies which have refining operations in this country. Thus, while supermarket chains including Woolworths and Coles now account for around 50 per cent of fuel sales, their activities do not fall under the scope of the act. The emerging class of retailers that are effectively regulation free have rendered this act useless for industry and for consumers.
The present rules surrounding the petroleum industry are unfair and inconsistent, in my view, leaving many in an invidious position of competing on an unequal footing with emerging competitors such as Woolworths and Coles. It is not in the public interest to continue to provide a free kick to retailers which are using low-margin discounted petrol sales to drive high-margin supermarket sales.
Refineries are giving the impression that a noose is tightening around their necks in light of their inability to absorb short-term losses through other means, such as grocery sales. I have no reason to disbelieve them. Despite the change in competitive dynamics in the petroleum industry and the need for refineries or marketers to compete vigorously with new market entrants, anachronistic legislation is unnecessarily restraining a freedom of choice in selecting appropriate business models.
It is at this point worth noting comments made by the President of BP, Mr Hueston, to the Senate Economics Legislation Committee about BP. He said:
... we do not have the freedom to operate the sites as efficiently as we can ... This has become increasingly important over the last few years, as the supermarkets have entered the game but not with the same rules that apply to us.
Such inefficiencies can only be imposing additional costs on refiners and marketers, which will undoubtedly be borne by consumers. Refiners are, for example, prevented from developing non-petrol offerings sufficiently so they can finance a cross-subsidy of petrol in a manner that would allow them to compete with Woolworths and Coles. The lack of flexibility with which to respond to market changes cannot, in my view, be helping the cause of competition in a market dominated by a few new players. It is a competitive advantage that is being sustained by the Commonwealth for the benefit of Woolworths, Coles and other groups who have exploited large, multisite franchising structures.
This protection, in the form of a distorted industry structure, naturally comes at someone else’s expense. Ultimately it is the consumer who has paid for a lack of competitive drive in the industry to get the cheapest possible prices at the pump. On this basis, I am happy to support the repeal of the Petroleum Retail Marketing Sites Act and the Petroleum Retail Marketing Franchise Act, which have served to perpetuate the problem. While these reforms do not provide an unequivocal answer to Australia’s petrol crisis, it has still taken far too long for the government to provide the four major players and the independent sector with the means to compete with supermarkets under a fair and realistic regime.
Debate interrupted.
Order! It being 9.00 pm, I propose the question:
That the House do now adjourn.
I would like to notify the parliament of the extraordinary claims by Ms Wendy Armstrong, a former staff member of the former Deputy Prime Minister, John Anderson, made in Mr Anderson’s authorised biography, that she was actually in the meeting when he and Tamworth businessman Mr Greg Maguire and Senator Sandy Macdonald discussed my political future. It had been previously assumed that Ms Armstrong was only in the meeting when the proposed equine centre was discussed.
I find it incredible that, until now, the former Deputy Prime Minister, Senator Macdonald and Mr Maguire have never mentioned the presence of this lady in relation to her being there when discussions took place amongst them about my career when there was an investigation by the Australia Federal Police and a Senate inquiry. If Ms Armstrong’s claim that she was privy to discussions about my political career is correct, why did she not come forward when those inquiries were being undertaken? In answer to the following questions from the Leader of the Opposition in the parliament on 18 November 2004:
... was the possibility of the member for New England pursuing a career outside parliament ever discussed? Were diplomatic and trade appointments mentioned in these discussions?
the former Deputy Prime Minister said, ‘No and no.’
Ms Armstrong contradicts her former boss’s answer detailing how my political career was discussed, saying:
And then he (Maguire) said to him (Anderson), “Can’t you find him (Windsor) a job? Can’t you find him a job? Can’t you get him one of those ambassadorships?”
Ms Armstrong recalls:
And John said, and this is his exact words, “That is not within my gift. That is the responsibility of the Prime Minister and Alexander Downer.”
Further, responding to my claim head-on that she had been asked to leave the room, Armstrong is adamant that she was, in fact, there for the crucial discussion, as evidenced by her clear recall of the specific words the men used. She was not, Armstrong stresses, merely there for the conversation that related to the equine centre proposal.
I believe that, by making this claim, Ms Armstrong confirms that Mr Anderson did in fact mislead the parliament on 18 November 2004 when he answered ‘no and no’ to discussing my political future. Mr Maguire told the Senate inquiry that they did discuss these matters. The former Deputy Prime Minister told the parliament on 18 November that they did not. But now Ms Armstrong confirms that they did. Ms Armstrong’s recollection of her reminding of Mr Anderson that she was there also raises more questions. Ms Armstrong said:
I said to John, “I just want to remind you. I was there.” And he (Anderson) leant across, ... and said, “Of course you were there. How could I have doubted myself? How could I have doubted myself? I’ve been really worried. You were there. You would remember. You would know.”
Neither the former Deputy Prime Minister, Senator Macdonald nor Mr Maguire remembered or mentioned in any of their public statements or evidence that Ms Armstrong was there in the meeting at the time discussion took place about my political future, even though, according to Ms Armstrong’s revelation in the book that she reminded Mr Anderson, ‘During the early days ... around November 2004,’ that she was there.
Was this before or after the former Deputy Prime Minister told parliament on 18 November 2004 that the group had not discussed my career? Bearing in mind that, supposedly, the first time that Mr Anderson knew about this matter was the night before, even though in his initial response to the parliament on 17 November—25 minutes after I first raised the matter—he included reference to ‘the member of my staff who was in attendance at the meeting’. Why would Ms Armstrong also admit that she did leave ‘the men’ before the meeting ended but she was sure she was there for the crucial conversations? How can she be certain of that?
Given the obvious contradictions in evidence given to the Senate inquiry, the parliament and now in this authorised biography, and given that the Australian Electoral Commission, to my knowledge, has still not reported back on its investigation into Mr Maguire’s commitment under oath to provide evidence relating to political donations, I call on the Australian Federal Police and the Australian Electoral Commission to reopen this investigation and for the Senate committee to review the report findings.
Today Premier Beattie announced, after visiting the Queensland Governor, that he would be calling the state election. I rise tonight to raise some of the key issues that I know the people of the Gold Coast will be taking into consideration when it comes to the forthcoming state election. I also rise to respond to comments that the Queensland Minister for Transport and Main Roads, Mr Paul Lucas, made with respect to Gold Coast road funding. I will deal with that issue first because Mr Lucas, the non-performing Queensland government Minister for Transport and Main Roads, alleges that the Howard government has not provided adequate road funding for the people of the Gold Coast. He makes the claim that, in some way, Gold Coast constituents and, in particular, constituents in the state marginal Labor seat of Mudgeeraba have been underserviced by the Howard government.
This claim has been made despite the fact that I had the pleasure of announcing as recently as only a couple of months ago that the Queensland Labor government has received a 119 per cent increase in road funding from the Howard government—more than double the level of road funding that the Queensland government has ever previously had. Yet the Labor government has the hide and the audacity to have its minister stand up and claim that it does not have enough money to undertake the adequate road funding and road planning that the people of the Gold Coast desperately need, as it is the fastest growing region in Queensland.
In addition to that, I had the distinct pleasure of announcing that, thanks to the Howard government, road funding to the Gold Coast City Council under the Roads to Recovery program has been doubled for this year—doubled because of the safe, strong, secure and responsible economic management of the Howard government, which has seen budget surplus after budget surplus. It means that we have more money to put into Gold Coast roads so that our fastest growing region of the country has access to the kind of road infrastructure that it expects and that it demands.
In addition, yesterday I announced $13.9 million in untied local grants from the Howard government—again, another record amount to the Gold Coast City Council. As a consequence of this government’s responsible economic management, a total of $189 million in road funding has flowed from the federal government to the Gold Coast. All I hear from the state Labor minister is the claim: ‘We don’t have enough money to get on and build the roads that Gold Coasters want.’ He had the audacity to call me the ‘Typhoid Mary of Gold Coast federal politics’. I have no understanding of the way in which Typhoid Mary possibly has application in this context, so I will not get into that. However, it reminded me a little of some remarks that Leo Tolstoy made when he said:
I sit on a man’s back, choking him and making him carry me, and yet assure myself and others that I am very sorry for him and wish to ease his lot by all possible means—except by getting off his back.
That is exactly the situation we have with this non-acting, non-responsible Labor minister, who claims that he would love to help the people of the Gold Coast if only he had the tools at his disposal. I say to him and I say to the ineffectual state Labor member for Mudgeeraba, Dianne Reilly, that it is high time the Queensland Labor government and she started delivering for the people of Mudgeeraba and started delivering for the people of the Gold Coast, because they have record funding at their disposal—the council has record funding at its disposal—and it is time that they made the Gold Coast a priority in the same way that they make the Brisbane-Ipswich corridor a priority for the Beattie Labor government. Stop the Brisbane bias, stop the Brisbane focus of Peter Beattie, and start to put some focus on regions like the Gold Coast.
This forthcoming state election is going to be crucial in a number of key areas. Road funding by far is the single biggest issue, but it is also clear that health is a major problem. The people of the Gold Coast know that they are underserviced when it comes to the delivery of health services. In addition, this increasingly arrogant state Labor government is determined to put a cruise ship terminal in one of the last vestiges of natural resource on the Gold Coast, The Spit. I say to Peter Beattie on behalf of the people of my electorate of Moncrieff: you need to listen, you need to deliver and you need to make sure that you are doing the best by the people of the Gold Coast.
Last week I urged the Prime Minister to turn his mind from moralising about the Big Brother program and focus on the task of cleaning up the New South Wales division of the Liberal Party. Tonight I draw the attention of the House to the branch stacking in the Prime Minister’s own electorate and renew my call for him to take action against the rorters in his party. I recognise it is an uncomfortable call for the Prime Minister, because it is his own faction responsible for the rorting. Nevertheless, the issue is too important for the Prime Minister to maintain a disdainful distance. To borrow an image from this morning’s Matt Price column, there is ‘an extra-large and malodorous Sandwichus Excretus’ in the Prime Minister’s own backyard, and he can ignore the stench no more.
I have previously brought to the attention of this place revelations about the rotten underbelly of the New South Wales Liberals in the book The Education of a Young Liberal by John Hyde Page. In this book this Liberal insider has revealed the rorting, deception, fraud and violence that characterises the Liberal Party in New South Wales.
The consequences of the recent right wing power grab are on display for all to see during the current Epping preselection contest. Ethnic branch stacking, rorting of rules and bribes—they are all features of the contest between Pru Goward, Federal Sex Discrimination Commissioner and prime ministerial mate, and Greg Smith, the right wing’s anointed candidate.
Mateship is not the only link between the Prime Minister and this contest. The state seat of Epping falls, in part, within the federal seat of Bennelong. Through control of the New South Wales state executive, the right wing has manipulated the preselection timetable for Epping to allow a large number of ‘stacks’ in the Cherrybrook branch to gain eligibility to vote. Cherrybrook is not located in Bennelong but in the adjoining federal electorate of Berowra, held by the Attorney-General. It is reported that up to 130 members of the Lebanese Maronite community have been stacked into the Cherrybrook branch by Mr David Baynie, an associate of right wing powerbroker David Clarke MLC.
As late as last week Mr Baynie was reported to be still building the numbers. Mr Baynie is a bankrupt property developer who first attracted public attention early last year when his supporters were accused of wielding pistols at a meeting to establish a new branch in Kellyville in the federal electorate of Mitchell. Through Mr Baynie’s stacking of Cherrybrook, the right wing controls up to 40 per cent of branch votes in the state electorate. The Epping preselection brawl is the latest in a series of events that reveal the impact of the right-wing takeover of the New South Wales division of the Liberal Party.
In this case, rules have been made to bend to the will of the right wing. Not only have the rules been ignored, so has the will of Goward supporters, including the Prime Minister and the New South Wales Leader of the Opposition. The Minister for Education, Science and Training and Minister Assisting the Prime Minister on Women’s Issues bragged in question time today about the number of women who have found a job. But the one job she will not or cannot deliver is for Pru Goward in the rorted preselection for the state seat of Epping.
This takeover has clear federal implications. It is bad enough that power in the New South Wales Liberal Party has fallen into the hands of a small extreme clique. That right wing clique now has the power to determine the outcome of preselection ballots in a swag of safe federal Liberal seats in New South Wales, including Bennelong, Berowra and Mitchell. And it is likely to engineer the demise of moderate Senator Marise Payne when the New South Wales Liberal Senate ticket for the 2007 federal election is determined. Where the right wing clique lacks the numbers to get its own way in local preselections, it is clear it will do what it did in Epping and stack branches and rort the rules in order to prevail.
It is not often I see eye to eye with the likes of Miranda Devine and Janet Albrechtsen. But I endorse their recent criticism of the Epping preselection process in which a naked grab for power by the right wing has prevailed over all other considerations. It is time the Prime Minister showed some leadership and lanced the boil growing in close proximity to his own backside.
I rise tonight to recognise the efforts of some outstanding young people in my electorate of Hasluck. Although some schools in Western Australia take advantage of the subsidy program to visit Parliament House, the distance, the cost and the time it takes to travel from Perth to Canberra are prohibitive for most schools in Perth. After my election in 2004, I introduced a leadership award in Hasluck to give at least two young school students in my electorate an opportunity to visit Canberra.
The Hasluck Leadership Award is named after my electorate, which in turn was named after Sir Paul and Dame Alexandra Hasluck—two renowned Western Australians. The Haslucks are an example to all of us with their dedication to this country and its people. Sir Paul was a journalist, diplomat, bureaucrat, member of this parliament, cabinet minister and Governor-General of Australia. Dame Alexandra was a historian of note.
There are 12 high schools located within the electorate of Hasluck and each school is asked to nominate one year 11 student who most closely matches the leadership criteria set out by the award. From these students, two overall winners—a boy and a girl—are chosen to visit Canberra and tour the House of Representatives, the Senate, the Australian War Memorial, the Australian Institute of Sport and other nationally significant sites.
The two overall winners are chosen by a panel comprising local schoolteachers, who consider each student’s written application and oral presentation. I am very pleased to announce this year’s Hasluck Leadership Award winners: Zach Cole of Guildford Grammar School and Tara Franzinelli of La Salle College. These two outstanding young leaders were chosen from a field of 10 students from schools throughout Hasluck. I would like to take this opportunity to recognise each of these students: Benjamin Wholagan from Kalamunda Senior High School, Kate Buffham from Southern River College, Mark Letter from Mazenod College, Danielle Lombardo from Saint Brigid’s College Lesmurdie, Aqila Ahmad Sinwan from Forrestfield Senior High School, Toshiff Nathoo from Lesmurdie Senior High School, Jerusha Thomson from Governor Stirling Senior High School and Peter Cheng from Lumen Christi College.
It was very pleasing that the Prime Minister was able to present the Hasluck Leadership Award certificates to all of the nominees and announce the winners at a community morning tea in Gosnells on 28 July 2006. Over 300 residents and representatives from community groups attended the event, which I hosted jointly with the City of Gosnells. The Hasluck Leadership Award is about developing the leadership potential of our young people, so who better to present the students with their certificates than the Prime Minister of Australia? The students thoroughly enjoyed the event and I hope that it will help to inspire them in their studies and future careers. I am looking forward to hosting Zach and Tara in Canberra next month and I know they will enjoy their time here.
It is important for young people to appreciate the democratic principles and institutions which are the foundation of our free society, and I believe that promoting and encouraging leadership qualities in our youth is an important task for all of us. The Hasluck Leadership Award satisfies both of these objectives, and I am proud to contribute to such a worthwhile endeavour.
While the Howard government has spent the last 12 months fighting amongst itself over leadership and developing legislation that sells out Australian sovereignty, Labor has been focused on the kitchen table issues that really matter to Australian families. In June this year the Leader of the Opposition announced the establishment of a family watch caucus task force. This task force has the role of examining and reporting on the financial pressure confronting Australian families. The pressures being examined by the family watch task force include rising interest rates, spiralling petrol prices and the rising cost of child care, education and health.
Earlier this month the task force held a public hearing in Melbourne at which we heard from the Royal Automobile Club of Victoria, the child welfare organisation Barnardos Australia, the Australian Family Association and the Australian Council of Trade Unions. The RACV told the task force that the cost of filling a family car has risen by almost $30 in the past eighteen months—more than wiping out the value of tax cuts implemented over the same period. Contrary to the Prime Minister’s ‘hope’ that petrol prices are on the way down, the RACV told us that higher fuel prices are here to stay until at least 2010, when additional overseas refining capacity comes on line.
Barnardos Australia warned that increased financial pressure on families is having a detrimental and lasting impact on Australian children. The Australian Family Association expressed its concern that the capacity of women to choose to raise children at home is not further diminished. In its submission the ACTU highlighted the consequences of the Howard government’s attack on family-friendly working arrangements and the reduction in job security through its extreme industrial relations changes.
Last Friday the task force travelled to The Entrance to talk to Central Coast families. Among our activities was a trip to the Bay Village Shopping Centre, where we spent three hours talking to families about the rising cost of living. The clear message we got is that the Howard government and its local mouthpieces, the members for Dobell and Robertson, just do not understand how difficult it is for many Central Coast families to balance their budgets and make ends meet. The simple fact is that families on the Central Coast are under more pressure than ever before.
Like all Australians, they are struggling with record household debt, record mortgage repayments, spiralling petrol prices and the rollout of the Howard government’s extreme industrial relations regime. Two issues were particularly significant on the Central Coast. The first was the impact of the Howard government’s broken interest rate pledge. About 30 per cent of households in Dobell have a mortgage and, let me tell you, they know what the member for Dobell’s broken interest rate pledge means for their family budgets. The second cost issue of particular significance for the Central Coast is the cost of transport. A fact of life for many of the families on the Central Coast is that a large number of locals commute to Sydney each day by car. While we were there, it was put to us that 50,000 locals commute to work each weekday, many of them by car. Skyrocketing petrol prices mean these people are paying more than ever before to get to work.
On Friday afternoon the task force heard from local residents and representatives of local organisations, including Sue Mueller, Matt Burke, Craig Thomson from Coastal Voice, David Mehan from the Central Coast Trades and Labour Council, Kathleen Gribble from the Australian Breastfeeding Association, Belinda Preston from Youth Angle and Kilita Na’ati from the Star of the Sea Church parish at Terrigal. We were very pleased to be joined by the member for The Entrance and New South Wales Minister for the Central Coast, Grant McBride, at our afternoon forum and to thank him for his valuable input.
On behalf of federal Labor’s family watch task force, I want to thank all the people of the Central Coast who shared their stories with us. In the absence of effective representation by the members for Dobell and Robertson, federal Labor has embraced the role of giving the Central Coast the voice that it deserves. On Friday we put the needs of Central Coast families under the spotlight. Over coming months we will put the needs of families in other regions under the spotlight through regional visits and a national family watch survey. Federal Labor will continue to listen and respond to the needs of Australian families—families that have been forgotten by this out-of-touch Howard government.
I rise this evening to confirm my strong support for an application submitted by Brisbane Marine Industry Park for funding under the Regional Partnerships program. Operating in Hemmant, a local bayside suburb in Bonner, Brisbane Marine Industry Park is a subsidiary company of Viking Industries, a leading provider of facilities and services to the marine industry worldwide. Viking Industries has contributed significantly to the growth of the marine industry in the Brisbane area through the provision of common user infrastructure at its Brisbane Marine Industry Park. It has developed a major strategic alliance with the Brisbane super yacht base cluster, covering in excess of 40 companies. The company works cooperatively with local businesses, which use the infrastructure and services to provide a platform for growth. This has resulted in the development of significant employment and training opportunities for workers in the bayside of Bonner.
By way of background, it has always been an objective of Viking Industries to provide waterfront infrastructure in the form of berths and ship-lifting capacity to accommodate boats of up to 650 tonnes on behalf of south-east Queensland businesses. It is commonly known that Brisbane lacks sufficient berths for a wide range of marine vessels, in particular super yachts. This factor was recently supported by a study commissioned by the Brisbane City Council and the subsequent report which not only highlighted insufficient berths as a deficiency but also drew attention to the need for an increased lifting capacity in the range of 300 to 800 tonnes. A Regional Partnership grant is pivotal to enabling this infrastructure upgrade to take place. This upgrade would significantly expand the available market for superyacht refit and repair. As super yachts become increasingly larger, this project will provide access to a greater percentage of a global market, which has grown from 241 new builds in 1997 to 662 in 2005. The visitations of these yachts provide lucrative opportunities for the ports that they visit. However, Brisbane Marine Industry Park has been forced to turn away business simply because the current infrastructure cannot support the larger vessels.
With increased lifting capability and supporting berth facilities, the local region and its people would be a prime beneficiary. An additional $40 million in export income would be generated over the initial five-year period. Furthermore, a new labour intensive industry would be created, and a minimum of 10 new businesses would be attracted to the region within the next five years. In turn, this would create substantial new job opportunities on the back of what is effectively the creation of a new industry built on the back of common-use water infrastructure.
This project would deliver positive outcomes directly to Bonner. It is estimated that 500 new apprenticeships would be offered to the youth in the local community over the next five years. Additional employment opportunities would encourage skills development and specialisation in this growth industry. Viking Industries has moved from strength to strength, and I commend the company on its efforts to facilitate industry growth resulting in a significantly enhanced share of the global super yacht market. These benefits extend into the wider community also. I believe Viking Industries has submitted an outstanding application under the Regional Partnerships program. Moreover, I believe that the project underpins what this government seeks to achieve through the program.
Tonight in federal parliament I pay tribute to the work of the Sandakan Community Education Committee and its chairman, Burwood Councillor David Weiley, for the great job he and the committee have done to promote Sandakan Memorial Day. The Sandakan Community Education Committee seeks to increase public awareness and to educate the wider community, particularly school children, of the horror of Sandakan.
Each year a memorial service is held in Burwood Park on the first Sunday in August. When Paul Keating was Prime Minister, he dedicated the Sandakan Memorial in Burwood Park in 1993. I am not sure members of this House are aware that Mr Keating lost his uncle in the infamous Sandakan death marches. At the 2003 memorial service in Burwood Park, Paul Keating returned for the 10-year anniversary. At that service, I recall him describing Sandakan as the ‘saddest story in Australia’s war history’.
We all know that only six of 2,428 Australian and Allied prisoners of war of the Japanese survived the starvation, disease and brutality at the Sandakan camp and the infamous death marches to Ranau in Borneo in 1945. On Sunday, 6 August this year the very distinguished Australian Mr Rusty Priest AM delivered a very moving address at the Sandakan Memorial, reminding all who were gathered there of the horror of Sandakan.
Tonight, I also pay tribute to the collective efforts of Burwood council, local RSL clubs and sub-branches, other local councils and schools for the magnificent support given to the Sandakan Community Education Committee. I know the families of those who lost their loved ones at Sandakan appreciate the work of the committee, and trust that the horror of Sandakan is never forgotten and never repeated. Well done to David Weiley and the Sandakan Community Education Committee.
Question agreed to.
The following notices were given:
to present a bill for an act to amend the National Cattle Disease Eradication Account Act 1991, and for related purposes. (National Cattle Disease Eradication Account Amendment Bill 2006).
to move:
That the House: