Bob McMullan (Fraser, Australian Labor Party) Share this | Hansard source

That of course was your colleague, Mr Deputy Speaker, Senator Boswell, the National Party Senate leader, who said 87 per cent of the money would benefit the oil giants. That is just part of the analysis that shows the inadequacy of the response. Nevertheless, there are some elements of it that I welcome: some elements will assist some citizens to do things like LPG conversions. In terms of the challenge the parliamentary secretary defined, particularly as it relates to climate change, what the Leader of the Opposition has correctly described is one of the four great challenges facing the international community—poverty, terrorism, weapons of mass destruction and climate change. As a response to that or even as a response to the problem of petrol prices, which is the immediate political problem facing the government, it was very inadequate but any positive aspect of it is welcome.

I make one brief reference to which all such statements—and not just by this government but by previous governments, including state governments—are reported in Australia. I think there is a serious inadequacy and manipulation, which is reflected in this statement but not unique to it, which has been going on for years. There is an elastic time period over which expenditure announced with regard to packages of reform is included. For example, in this proposal it is blithely reported that it is a $1.5 billion package when, in fact, it is a $1.5 billion package over eight years. I think we have to move towards some sort of standardisation when the forward estimates impact of measures is reported. The rest is entirely notional. There is no certainty that any of those things are going to happen and they would not be included in the budget papers.

I want to take the balance of my time to deal specifically with a misleading implication in the Prime Minister’s statement. It is one that has been recurrent with regard to the Labor Party’s attitude, and my attitude in particular, to ethanol. It arises because of my campaign, for which I make no apology and of which I am very proud, to expose the rorts and special deals on ethanol in the period from late 2002 to the early part of 2003.

Every statement I made in that period and every statement I have made since has been consistent with the longstanding position I and the Labor Party have held—that is, there is a significant future for ethanol, going back to the introduction of the ethanol subsidy by the Keating government, which of course was abolished by the Howard government. What we were against then and what I spoke out against then were rorts and special deals for mates. We always made it clear that we were opposed to rorts, we were opposed to special deals for mates, we were opposed to consumers not being informed and we were opposed to the failure of the government to set a 10 per cent cap on ethanol in spite of all the scientific advice that it should do so. We said then that this failure to act would adversely affect those who were selling legitimate E10 ethanol products. There were some then and we never criticised them then. There are some now and I support them now. E10 has always been a valid option. It is the special deal for Manildra, the big supporter of the Liberal Party, that was our objection and concern.

Let us look at the facts: in November 2000, Environment Australia advised the government that it should have a limit of 10 per cent on the ethanol level in petrol, consistent with international standards. In December 2001, the Australian Competition and Consumer Commission wrote to the Minister for the Environment and Heritage calling for a 10 per cent limit and urging that consumers be advised when they were sold high ethanol blends. But even as late as September 2002, the first time I raised it—which was almost two years after the first advice and almost a year after the ACCC recommendation—the government was refusing to act and we had the head of the Australian Institute of Petroleum making it clear that the then Minister for Agriculture, Fisheries and Forestry had said to him that the Prime Minister would not agree to a 10 per cent ethanol limit if it affected the operations of Manildra. That is the basis upon which we said that consumers were not being advised as they should be, that the limit was not being set as it should be— because of special deals for mates.

Every policy statement that we put out, every piece of information that we put out, made that clear. We said there seemed to be no risk of damage up to 10 per cent in ethanol but that every producer—every major Australian motor vehicle producer and the people in the boating industry as well—was saying that warranties on engines would be voided if you put in more than 10 per cent ethanol, and yet customers could not know whether or not they were doing it because the government refused to advise them. Was this a scandalous policy we were proposing, that there should be a 10 per cent cap and that consumers should be advised? It is so scandalous the government adopted it. It is so scandalous it is now the government’s policy. But when we advocated it the government twisted and turned and did everything it could to avoid having to implement it.

It was not a lack of information. In 2001 the then consumer affairs minister, the Minister for Financial Services and Regulation, Mr Hockey, said that consumers have a right to know if their engines are at risk, but the government would not act to require people to disclose. The head of the Australian Competition and Consumer Commission, Allan Fels, recommended to the government that they should put a limit and they should require disclosure. He said:

This silence may mislead consumers.

But would the government act? No. They set up a task force and everybody on the task force except two said they should put a limit and they should have disclosure—and the two dissentients were both from the ethanol industry, representing the manufacturer, who did not want the limit. The government said, ‘Well, this committee can’t get a unanimous decision, so we’ll put off making a decision even longer.’

Everybody knew what the decision was going to be—what it had to be, what the international standard is, what the ACCC had requested, what the minister for consumer affairs had requested, what the Department of the Environment and Heritage had requested and what the Labor Party advocated as a policy—and the government attacked us and said we were terrible people who were opposed to ethanol, and then eventually they adopted our policy. Eventually they implemented exactly what we had advocated, and they knew they were always going to have to. They knew that the position they were adopting, which was to have no limit and no advice to consumers, was untenable, but they continued to do it. Why? As the head of the Australian Institute of Petroleum made clear, it was because the Prime Minister would not agree to a 10 per cent limit if it would affect the operations of Manildra.

When you do special deals, it has consequences and it often has unintended consequences. One of the consequences of those special deals and rorts was that the reputation of ethical sellers of ethanol, under the E10 brand, suffered. We said that is what would happen and it did, and it is going to take a lot to fix it, but that is not because there is anything wrong with the product. I go back to the history. When I was parliamentary secretary to the then Treasurer, Paul Keating, we negotiated, principally with Manildra, a subsidy on the production of ethanol. The then Liberal-National Party opposition said they would keep it, but of course when they came to office they abolished it.

Even at the height of this controversy, the Howard government introduced a program of capital grants for people to establish ethanol manufacturing plants, and we supported it. I certainly supported it personally. To the best of my recollection, the opposition as a whole supported it—but I did. I thought it was good public policy. I think some aspects of some of the subsidies were very dubious, but the question of capital grants is absolutely a good, valid bit of public policy and I supported it and I was content for it to be continued. But we opposed the rorts then and I oppose them now. Events have in fact vindicated everything that we did.

So let us come back to the broader statement that we have before us with the government’s energy policy statement. You can never say that a statement that introduces some modest assistance for people doing LPG conversions, for example, is not welcome. It has been exaggerated in its benefit. It is a very small fig leaf to cover what is a rather large political embarrassment for the government, but it is better than nothing. I do not say it should not have been made. I suspect that, if there had been more research earlier, we would have got a more comprehensive statement. If it had gone to the whole range of policy issues more comprehensively, which were included in the Leader of the Opposition’s alternative fuels blueprint, it would have been a much more effective response to the substantial international problem, which was reasonably well outlined by the Parliamentary Secretary to the Minister for the Environment and Heritage, who spoke before me. While I did not agree with everything he said, he did indicate the comprehensive nature of the issue, the underlying forces that are driving changes in resource allocation and environmental threats as a consequence of changes in the global economic environment and the global climatic environment.

As an effective response to either of those things, this is a pitifully small response, but I welcome elements of it. It is better late than never; better too little than nothing at all. We have this modest response. Insofar as it is of assistance to people that I represent, I welcome it. I wanted to take the chance to correct the record over the rorts that were undertaken in 2002, and I am pleased that the government finally did adopt our policy with regard to those matters. It is the correct policy. It was overdue. It should have been done much earlier, but it is better late than never.

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