Thursday, 19 June 2008
Questions without Notice
I think it is important to look at the range of measures which we can deploy responsibly as a government in dealing with what is a global problem. Let us again put it into context: we have the greatest global oil shock the world has faced in 30 years. Therefore, a range of measures—short, medium and long term—are necessary to deal with it. I mentioned before, in my response to the question asked of me by the Leader of the Opposition, about additional global measures. One of those deals with the supply-side measures which will be addressed in part at the upcoming Jeddah conference, which the Minister for Resources and Energy will be attending. Others, on the global demand side, go to measures currently embraced by the International Energy Agency and the G8 to enhance energy efficiency measures in developing countries. When you have this huge surge in demand from China and India and the suck-in of oil from those two burgeoning economies, representing something more than 50 per cent of the overall increase in global demand for oil, it follows logically that that also is having an impact on what is occurring in the overall balance of supply and demand in the global oil market.
There is a further factor, though, which I would draw honourable members’ attention to, and that goes to increasing concerns across the international community about speculation—that is, excessive speculation within the oil industry itself and increasing evidence that some financial institutions may be trading in oil as an investment like shares and currencies. When we look at international action on these matters we have the US Commodity Futures Trading Commission, the CFTC, imposing position limits on West Texas Intermediate oil contracts on the London based ICE Futures Europe exchange. The new regulations are an attempt to limit excessive speculation on the price of oil, limiting individual positions in West Texas Intermediate oil contracts on the ICE Futures Europe, which holds up to 30 per cent of total trades. European authorities will also share trading data with their US counterparts to improve transparency.
The IMF is also acting in this respect in response to a particular request from the G8. In response to a call from G8 finance ministers, the IMF is currently analysing the real and other financial factors behind the recent surge in oil and commodity prices, their volatility and the effects on the global economy, including the role of speculators. This is an important consideration, because when we look at the overall global analysis of what is a problem for all economies at the moment, whether it is the US Treasury Secretary or the G8 finance ministers, all have expressed deep concerns about this, as does the government of Australia. I quote here the US Treasury Secretary, Hank Paulson, who said most recently:
All the evidence points to ... supply and ... demand as the main cause—
of the surge in oil prices. He continues:
“I think there’s a danger that if people say ‘all this is speculators’ then we won’t do what we need to do. We don’t want to misdiagnose the problem.”
In other words, it is a complex set of problems on the supply side and the demand side, but there is also an important consideration when it comes to speculation. Therefore, this government, in partnership with foreign governments, will be doing what we can through the councils of the international community to act consistently on the question of the impact of speculation on global oil markets and any artificial manipulation of the global oil price which may occur as a result. That is on the global action front.
When it comes to local action, could I simply say this: I still remain puzzled as to why those opposite remain so ideologically opposed to Fuelwatch. The price of petrol in some Sydney service stations yesterday reached $1.70. We understand that yesterday in Sydney there was a difference of about 20c a litre between the lowest and highest petrol price. With those opposite, it depends on who you believe: the Leader of the Opposition or the member for Wentworth, who does not support the Leader of the Opposition’s position on this, or the member for Aston, the campaign manager for the member for Higgins, who suggested a third new option when it comes to petrol policy—not 5c but 10c, depending on where you actually stand on this. It is always interesting to identify policy coherence on the part of those opposite.
I go to the specifics of what is happening in Sydney at the moment, and I think it is very important that honourable members reflect on this. In South Strathfield yesterday you had a Vartex petrol station charging 164.9c per litre at 1.16 pm while at the nearby Coles Express, along the Hume Highway at South Strathfield, 155.9c per litre was being charged at 1.20 pm. That is a 9c a litre difference. That is in and around Strathfield.
In Eastwood yesterday you had an Autodoc petrol station charging 164.9c per litre at 3 pm while the nearby 7-Eleven at Carlingford was charging 155.9c per litre at 12.16 pm. That is also a 9c a litre difference. Then we go to what is occurring in Mosman. In Mosman yesterday there was a BP petrol station charging 171.9c a litre at 1.46 pm, and the nearby 7-Eleven on the corner of Spit Road and Mitchell Road was charging 155.9c a litre at 1.40 pm. That is a 16c a litre difference. Therefore, simply in the space of yesterday in Sydney—given that we have had petrol prices go above 170c today in Sydney—we had in the single suburban areas that I have just referred to price differences of between 9c and 16c a litre. Across the whole metro area, that is some 20c a litre.
We on this side of the chamber have this remarkably radical approach that we think consumers should have access to that information! That is our radical approach—we think that consumers should have access to that information. Those opposite are of the view that this should remain the unique property of the oil and petrol companies. Our approach therefore is that a competition policy approach is a very important addition to what is an overall big challenge in terms of families trying to balance the family budget at the moment. Having available data about where you can get the cheapest fuel on a particular day in your locality—that is what Fuelwatch is all about. Those opposite have once again sided with big oil and the big petrol companies and decided that that information should remain uniquely in their possession. We on this side of the House have a different approach, and that is that that information should be provided in a time-real manner to consumers so that they can make the best choices for themselves.
When it comes to the difficult question of oil and petrol worldwide, we have a range of measures we will be pursuing as a government: those which apply at the global level concerning supply, demand and speculation; those which also are being considered by the Henry commission; and those which deal in the here and now with the impact of competition policy. These are responsible courses of action given the difficulty which consumers are facing at present in this important area. I contrast that again not just with the overwhelming avalanche of negativity on the part of those opposite but with an overall approach where they will say anything and do anything on the question of oil prices in order to achieve a cheap headline. That is what is governing policy on the part of those opposite. The Leader of the Opposition has one policy concerning 5c a litre. The alternative Leader of the Opposition, the member for Wentworth, says that he will not implement it. The campaign manager for the member for Higgins says that he would like to double the amount. What is the position of the opposition on this matter? Our approach is clear cut. The approach of those opposite is characterised not just by negativity but by absolute populism.