Andrew Leigh (Fenner, Australian Labor Party, Assistant Minister for Productivity, Competition, Charities and Treasury) Share this | Hansard source

I present the revised explanatory memorandum to this bill and move:

That this bill be now read a second time.

Since the conflict between the United States, Israel and Iran began on 28 February, our government has been responding to the biggest oil shock in history with a comprehensive plan to secure more fuel, strengthen supply chains, build resilience and take the sting out of prices. The government's Strengthening Australia's Fuel Resilience package will deliver more fuel for drivers and industry, more fertiliser for farmers and more fuel security for the economy, with its centrepiece being immediate fuel supplies and a permanent Australian fuel security reserve to ensure we have the fuels and fertiliser we need.

Our government is helping businesses and manufacturers bolster supply chains through interest-free loans via the National Reconstruction Fund, along with incentives to shift more freight onto trains and ships. Targeted support for electric vehicles, more charging stations and heavy vehicle reform will strengthen our long-term fuel resilience, while the Cleaner Fuels Program and reforms to the low-carbon liquid fuels market will help Australia produce more fuel at home and support future demand.

We are reserving 20 per cent of gas exports for Australian users to increase domestic supply and lower prices, and we are advancing the Future Made in Australia agenda through the Critical Minerals Strategic Reserve and investments in domestic smelting and manufacturing. We understand this crisis is adding to cost-of-living pressures, which is why we're more than halving the fuel excise, reducing the heavy vehicle road user charge to zero, putting petrol companies on notice by doubling the consumer watchdog's maximum penalties and ramping up enforcement and monitoring, giving businesses more leeway at tax time if they face fuel supply problems, and continuing to make it easier and quicker for small businesses to access credit when they need. It.

This bill supports that action by creating new powers for the Treasurer and the Australian Competition and Consumer Commission to permit coordinated action during a crisis by increasing the maximum penalties that can be imposed for breaches of the Oil Code of Conduct.

Under schedule 1 of this bill, the minister can make an extraordinary circumstances declaration in circumstances that pose a risk to the Australian economy, businesses and consumers, but which may fall short of a declared national emergency under the National Emergency Declaration Act. Once extraordinary circumstances have been declared, the Australian Competition and Consumer Commission will be able to exercise new, streamlined powers to enable coordinated responses to the crisis by businesses to complement the work of the government in protecting the Australian public and economy from the impact of the crisis.

These new powers are pre-emptive. They allow the minister to make a declaration enlivening the Australian Competition and Consumer Commission's powers when there is a foreseeable harm and allow decisive cooperative action with the business community to prevent or mitigate that harm early. In the current situation, this could include businesses working together to minimise fuel usage to keep supply chain costs low for them and their consumers. Instead of reacting to fuel shortages, we can allow businesses to find innovative and collaborative solutions to prevent shortages.

The Australian Competition and Consumer Commission already can grant authorisations, and has done during the current situation and past crises. But this process is burdensome and slow, making it too inflexible to respond to the changing situations Australia may face during exceptional global or domestic circumstances. This new power will make it easier and faster for the Australian Competition and Consumer Commission and businesses to assist these vital efforts to respond to these circumstances, and future exceptional challenges the Australian economy faces.

Schedule 2 to the bill increases the maximum penalties that can be imposed for breaches of the Oil Code of Conduct. Under this bill, the regulations will be able to impose penalties on corporations in the oil industry up to the greater of $10 million, three times the value they derive from breaching the code, or 10 per cent of their last year of turnover. For persons other than corporations breaching the code, penalties of up to $500,000 will be available for contraventions. The Australian Competition and Consumer Commission will also be able to issue penalty notices of 600 penalty units to corporations for suspected breaches and 12 penalty units for other persons. For context, the value of a penalty unit is currently $330.

These changes mirror those introduced by the government in 2024 into the Competition and Consumer Act for breaches of the food and grocery code. They also complement recent action taken by the government to increase other penalties under the Competition and Consumer Act, and other action taken to address the supply and price of fuel in Australia. The bill will further discourage fuel companies seeking to flaunt their obligations under the Oil Code of Conduct, including those taking advantage of the conflict in the Middle East.

Full details of the measures are contained in the explanatory memorandum.

Leave granted for second reading debate to continue immediately.

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