House debates

Thursday, 5 June 2008

National Fuelwatch (Empowering Consumers) Bill 2008; National Fuelwatch (Empowering Consumers) (Consequential Amendments) Bill 2008

Second Reading

4:46 pm

Photo of Jon SullivanJon Sullivan (Longman, Australian Labor Party) Share this | Hansard source

I stand to give a Queensland perspective on fuel prices, which is not necessarily one that we have had before. My attention was drawn to an article in the Courier-Mail in January this year headlined ‘$70m petrol price rip-off’ which pointed out that, according to the estimation of people involved in the industry, Queenslanders over the month from mid-December to mid-January were ripped off by $70 million by the fuel companies. I was then most interested to read later on in the article that the Shell petrol company hit back at claims it was profiteering and it released its profit margins for Brisbane, Sydney and Melbourne. Shell claimed that in Brisbane it made 7.9c a litre profit; in Sydney and Adelaide, 4.3c; and in Melbourne, 3.6c. What occurred to me was if 4.3c profit is okay in Sydney, why isn’t 4.3c profit okay in Brisbane? What really was happening, at that time at least, was that the Shell company and other fuel companies in Queensland were eating into the Queensland state government’s subsidy to Queensland residents on fuel.

I have got no time for corporations who behave that way, unlike the members opposite who seem to be in here, not only today but for the past fortnight, fighting a rearguard action on their behalf. A lot of what has been said over the past fortnight has been about the fact that there are fines for lowering the prices, and the member for Mitchell repeated that matter just a moment ago. The ACCC tells us that there have been 46 infringement notices issued since 2001. There has been one prosecution for somebody selling at a price lower than the notified price.

I had an email come to my office from somebody who quoted to me that a small independent fuel station in Western Australia had been fined $800,000, so I thought I had better have a look at that. I found the information on the Western Australian FuelWatch website and I would like to read a bit from that website into the Hansard:

FuelWatch has fined a Mount Lawley petrol station owner Paul Stinton for acting in breach of the 24-hour rule when he decreased his petrol prices in the middle of the day.

…            …            …

Mr Stinton is the first retailer to be fined for breaching the 24-hour price rule by lowering his prices in the middle of the day. Since FuelWatch’s inception 10 metropolitan petrol stations have faced a total of 17 fines worth $6400 for failing to lock-in their prices for 24 hours, and selling fuel at a price higher than the FuelWatch notified price.

…            …            …

On four previous occasions Mr Stinton had received warnings from FuelWatch for being in breach of the 24-hour rule. On the most recent occasion in May—

that is, May 2005—

Mr Stinton was contacted by FuelWatch staff and was advised that he was in breach of the 24-hour rule when he lowered his fuel price in the middle of the day. Mr Stinton had ample opportunity to notify FuelWatch of his intended prices for the follow day, but failed to do so. He continued to sell fuel at a price lower than the price he had notified to FuelWatch for two more days. Mr Stinton continued to sell four fuel products at lower than notified prices for two days, and was fined $200 for each offence bringing the fine to $1600—

not the nearly $5,000 that we heard from members opposite last week and certainly not the $800,000 mentioned in the email that came to my office. The website news item went on to say that in February 2004, the previous year:

... Mr Stinton was fined $200 when he breached the 24-hour rule and increased his price by 10 cents per litre in the middle of the day. In that instance also, Mr Stinton was fined only after receiving a formal warning about such actions being in breach of the legislation.

It is important to understand why the 24-hour rule is in place. Certainly it is important in the context of a fuel market where the supermarkets have 65 per cent of the market that we understand how they operate. They use a thing called ‘price flexing’. That is a tactic that large retailers use to crush small businesses. Woolworths and Coles are particularly good at it.

Those of us from Queensland would be aware of a gentleman by the name of Joe Natoli, who was, until the amalgamation of councils recently, the Mayor of Maroochydore. Mr Natoli’s 71-year-old family fruit business was put out of business by Big Fresh, which previously had been Franklins, not Coles or Woolies. There are some members still in this chamber who were on the House of Representatives Standing Committee on Industry, Science and Technology who reported in May 1997. This is taken from that report, and is Mr Natoli talking:

On one particular occasion, Big Fresh advertised sultana grapes at $1.99 a kilo. By chance, we had advertised sultana grapes at $1.79 a kilo. They dropped their price ... we dropped ours. Within two hours, Big Fresh dropped their price to 49 cents a kilo. We reduced our price to 99 cents a kilo, but raised it to $1.29 per kilo, our cost price. They later raised their price to 69 cents and kept it there for two days. Their manager told us they kept the price low to punish us and teach us a lesson for taking them on.

The committee, when it reported to this parliament said that it ‘does not consider it acceptable to use small businesses as cannon fodder’ for large businesses. And that is precisely what would happen if these major corporations were allowed to bring price flexing into the fuel market.

When I was a state MP I had a quite remarkable woman who worked for me as my electorate officer. Her name was Lorraine McColl. When Lorraine started working for me she was already a great-grandmother, although quite young. She had the most wonderful turn of phrases, and one of those could be applied to the repeated assertions from members opposite that Labor guaranteed lower petrol prices. She would have called that ‘simply frog droppings’. Well, she would not have called it frog droppings, but you get the picture.

For the past week, speaker after speaker from the other side has repeated the claim that Labor promised cheap fuel. This is on the basis that if you repeat an untruth often enough it will become the truth. The shadow Deputy Treasurer, the member for Dickson, made two references to an alleged Labor promise in the first 10 minutes of his presentation and made five such references in the second 10 minutes. In a 20-minute speech, he made the claim that Labor had promised lower fuel prices seven times. But he did not provide us with any evidence—not a transcript, not a media release, not a media report. In fact, as the member for Bendigo said, he was verballing. Queensland police were discovered in 1988 to be the world’s champion verballers. I guess that the member for Dickson may have learnt something from his former profession.

Let me read a couple of pieces for you—


No comments