Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Batman has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The question now is that the words proposed to be omitted stand part of the question.

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Assistant Treasurer and Revenue) Share this | Link to this | Hansard source

Before I was interrupted by question time I was making the point, in the presence of the Prime Minister and the Treasurer, that there are a whole lot of things the government could do about the impact of high petrol prices on both Australian families and Australian industry—and, in particular, Australian small business. I am happy to see the Minister for Small Business and Tourism present, because there is no doubt that she has had a lot of feedback. I hope she has had some feedback; I hope people are talking to her about the impact of petrol prices on their operations and the combined impact on small business of higher interest rates and petrol prices.

Fran Bailey (McEwen, Liberal Party, Minister for Small Business and Tourism) Share this | Link to this | Hansard source

They are also talking to me about Labor’s policy on unfair dismissal—

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

Minister, we do not need a debate across the table.

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Assistant Treasurer and Revenue) Share this | Link to this | Hansard source

The minister interjects and she acknowledges that small business people have been complaining to her about the combined impact on their businesses of higher petrol prices and increases in interest rates. I am delighted that she has been getting that feedback.

Fran Bailey (McEwen, Liberal Party, Minister for Small Business and Tourism) Share this | Link to this | Hansard source

And I have been hearing their concern that unfair dismissals would be returned under Labor.

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Assistant Treasurer and Revenue) Share this | Link to this | Hansard source

I now hear her talking about unfair dismissals. I am happy to acknowledge that I have heard from some small business people who are a bit concerned about dismissal policies too. What they have been telling me is that they are not scared about unfair dismissals; they are scared about a thing called ‘unlawful dismissal’. They know that, now this government has taken away their opportunity to take the less expensive and less cumbersome path of unfair dismissal, people will be coming after their former employers under a thing we call ‘unlawful dismissal’. The minister sitting at the table must surely know—or, at least, I hope she knows—that the unlawful dismissal path will be far more cumbersome and far more expensive for small business operators. She also knows that—

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Hunter might come back to the bill.

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Assistant Treasurer and Revenue) Share this | Link to this | Hansard source

She also knows that her government is going to fund the legal action of employees dismissed from hereon in. They will get a government grant to defend their cases against their former small business employers. She should know that this concept of unlawful dismissal is a very expensive one, if she has a look at some of the case law—and I recommend that she do that. But I will take your advice, Mr Deputy Speaker—

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

I hope so!

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Assistant Treasurer and Revenue) Share this | Link to this | Hansard source

out of respect for you, and return to the issue at hand. I said just before question time that there are some short-term things the government can do about petrol prices. They can move quickly to strengthen the power of the ACCC to ensure that things are being done properly and fairly in the market. They 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. They are very simple things that the government could do tomorrow. In fact, I gave the Treasurer another opportunity today in the parliament to sign that simple letter to send to the ACCC chairman that is required to give him the power to properly investigate petrol pricing and the market—both retail distribution and wholesale distribution at the terminal gate.

I said before question time that this is a very important bill. These are very important reforms to the regulatory regime which our petrol retail market operates under. They were originally put in place by the Fraser government out of concern about market concentration and vertical integration in particular. I spoke about the way in which they have been circumvented over the last half a dozen years or so and the government’s failure to show leadership and to secure some agreement between the various parties before now to get rid of this antiquated law. I just want to reinforce the point again that the opposition support of this repeal bill hinges on the promise we have had from the government that very soon—in other words, almost concurrently with the repeal by this bill—they will be introducing those amendments to the Trade Practices Act which we have been seeking for so long.

It is very important to note that we are repealing legislation today that effectively does nothing anyway because, audaciously, some weeks ago now, the minister decided to move a regulation which undeclares each of the major oil companies under the legislation. The legislation sets up the framework, and who is covered by the legislation is determined by regulation. The four major oil companies have been undeclared, so we have a Petroleum Retail Marketing Sites Act that covers no-one. So it would be nonsense for the opposition to be opposing the repeal of the legislation, but the legislation is still there and has leverage for us to ensure that those trade practices amendments come forward.

I look forward to the government producing those amendments in the next little while. We want to see 98 per cent of the Senate committee’s recommendations. We do not want half the story or some half-baked approach to restoring section 46 of the Trade Practices Act and therefore the ACCC’s ability to secure prosecutions for misuse of market power, collusion and all those other things under part IV generally.

Listening to the debate on this bill before I received my opportunity to speak, I heard a lot of talk—and it is welcome talk—about what the Prime Minister could be doing in the long term about petrol prices in this country. When the price of international oil is high, it should be a call to arms to the government to swing into action, to do something short term—and I have addressed those issues—but also something medium to long term. We accept—we are not fools—that high petrol prices at the moment are largely driven by high oil prices, but there are both short- and long-term things that the government can be doing to mitigate the impact on people, as I have said.

This should be a wake-up call to the government to finally get an energy policy together and to finally acknowledge that we have to wean ourselves off Middle Eastern oil. In fact, we have to wean ourselves off our traditional fuels. Oil is such a finite resource. We are running out of oil. On the basic laws of supply and demand, demand is going up and supply is going down, so naturally price is going up. When is the government going to realise that this is unsustainable and we are facing a fuel price crisis?

There are some solutions. People have been talking about ethanol. Let me say something about ethanol again. The Labor Party support ethanol as an important contributor to this goal—that is, to wean us off oil and to stretch our finite resources further. We started the ethanol industry in this country with capital assistance grants back in 1993. We have supported pushing out further the application of tax on ethanol. We are now out to 2012. We did not oppose the government’s total removal of import competition. We have supported all the later rounds of capital assistance grants for new plant. We have done all the ethanol industry has asked of us short of mandating.

None of us should be turning to mandating as a solution to ethanol’s challenges. We should not need to mandate. This is a good product. It is good for regional jobs. It is good for the environment. It is good for the agricultural sector. It helps the competitiveness of independent service stations, because they can blend the product—having no tax makes them more competitive. It does not need mandating. Where do we stop once we tell people they have to buy a product? Lemonade in beer next? Consumers do not expect to be told by legislatures what they should and should not buy, but if we work together and work sensibly we do not need to mandate ethanol.

We want it to play an important role in the mix. A good industry out there wants it to play an important role in the mix. The oil companies need a jab in the ribs. The government should be jabbing them harder, and we are happy to support them in providing those jabs. Ethanol is a very important mix and has our total and unqualified support. But we only make 37 million litres of it in this country at the moment. If we mandated it at 10 per cent, we would need two billion litres. What would we have to do? We would have to import it. If we could not import it, demand would outstrip supply. What would that do to the price of the ethanol? It would send it up. What would that do to the price of the petrol-ethanol blend? It would send it up. So this would be an anti-consumer measure.

We have to support ethanol, but we also have to support LPG, CNG, biodiesel and of course gas-to-liquids diesel. We have plentiful supplies of liquid petroleum gas. How amazing and hypocritical it was for the Prime Minister this week to roll out as a possible solution to growing LPG consumption the bringing forward of a rebate on installations which he planned to give anyway. This is the same Prime Minister who made LPG taxed for the first time, first with a GST. We should recall that the LPG industry took the full brunt of the GST. Petrol had its excise reduced by 7c to partly—and I underline partly—offset the impact of the GST. It did not. It was not enough to stop the GST causing petrol prices to rise, but petrol did have an excise reduction. LPG attracted no excise, so there was no excise to reduce, and it took the full 10 per cent brunt of John Howard’s GST. Now the Prime Minister plans to put an excise on LPG for the first time. This is a Prime Minister who has been working against LPG in the market rather than assisting a greater take-up of LPG, so it is entirely hypocritical of him to pose that as a weak solution to the significant issues we face. But LPG is a great opportunity for us. It is an indigenous fuel and we have plenty of it.

Our other big opportunity is natural gas—prior to getting to hydrogen as an ultimate solution. I should acknowledge hydrogen, because it will be our ultimate solution, but prior to that our next big resource is the enormous reserves of natural gas we have in this country—150 trillion cubic feet of it. The member for Batman acknowledged my statement that it is a funny Prime Minister who has no trouble getting natural gas to Shanghai when he cannot get it from the west coast of the country to the east coast. We should be getting those fuels to the east coast as liquid diesel fuels.

Our natural gas is easily convertible into liquid diesel which goes straight into diesel engines as they stand without any modification. Whatever the price of oil is—through $US25 a barrel—this is economically viable. Why aren’t we doing it? Because the government is not giving sufficient encouragement to the oil companies to get on with it. It has other plans for our gas—that is, shipping it off at bargain basement prices around the world without thinking about our future needs. What we need is an energy plan that takes into account our existing reserves, our future consumption needs and what we as a nation need in the future. (Time expired)

Chris Hayes (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

The Petroleum Retail Legislation Repeal Bill 2006 shows that this government can actually achieve something when it puts its mind to it. With the bill before us today, the government has decided it is time to take some corrective action in the petrol retail market. It has decided that things cannot remain as they are. Sadly, I am not talking about the government taking action on petrol prices, but I will return to that a little later.

The action is supported by the Labor Party. We support the repeal of the Petroleum Retail Marketing Franchise Act 1980 and the Petroleum Retail Marketing Sites Act 1980. We do so in principle—Labor’s second reading amendment is quite a welcome contribution to this debate because it does draw attention to the tardiness and the dragging of the feet exercise that has been pursued by this government in trying to address petrol retail reform.

Despite the fact that the government has not rushed to deal with the issues facing the petrol retail industry, I do welcome the structures that the passage of this bill will allow to be put in place. It is important that, as we continue to see the march of the large supermarket chains as they purchase more and more businesses in more and more sectors of the retail industry, there should be some exercise undertaken by government to temper that approach. Those who are trying hard to compete against these massive organisations deserve a break. I welcome the fact that the Minister for Small Business and Tourism is at the table, because I am speaking for her constituency in this regard. Like her—at least, I assume like her—I have a lot of small business people talking to me in the electorate, expressing concerns about situations where they believe they need relief against some of the marauding and loss-leading practices of large organisations that seek to manipulate markets that they currently operate in.

Under the current petrol retailing arrangements, there are at least three classes of operators: the commissioned agents, the independents and the franchises. Discrimination in one form or another obviously exists between these classes. It is made more difficult because of the imposition of certain legislative requirements. One in particular is that at the moment we have a class of emerging retailers which are effectively regulation free. The acts that are being repealed as a result of the passage of this bill cover only part of the petrol retailing industry, with more than 50 per cent of the industry by volume not covered at all. Under the existing arrangements, the new force in petrol retailing—the large supermarket chains of Woolworths and Coles—are not covered at all.

The proposed Oilcode will provide protections and regulation for the petrol retail sector and will cover entities that are regulation free at present. This has got to be an important improvement for all those small business people operating as petrol retailers.

A petrol retailer in my electorate spoke to me only recently to ensure that I understood how this piece of legislation would affect him and his business. One of the things he wanted to emphasise was that things are very tough. As a franchise operator he does not get to set the price that he sells petrol for and the margins are, as he put it to me, extremely thin. Despite the fact that petrol is hovering around the $1.50 mark, his margin remains fixed, and it remains at cents per litre.

He also spoke to me about the fear that he has about the unfair competition that takes place in the industry, and he hopes that the action of establishing the Oilcode will go some way to levelling the playing field in the petrol retailing industry. He, like others, finds it difficult to compete with the entrance of the new retailers owned by the large supermarket chains, with their ability to apply discount schemes. Another thing to bear in mind, as I said, is that those large organisations, those large supermarkets, largely operate, in terms of petrol retailing, in an unregulated market at present. For them to be able to come out and offer, for instance, up to 4c a litre off the price of petrol may not seem much, but, as this operator put it to me, when you consider the difference that makes for a family, that is something that must be taken into account. That is the thing that can actually decide whether he as a franchisee can stay in business or not.

There is no doubt that, given the rapid changes in the petrol retailing industry over the last few years, the time has come to address the issue facing the industry and address the disparities and the discrimination between different classes of owners and operators within this industry. We know that the petrol retail industry is currently experiencing some significant restructures, with the number of service stations dropping from some 20,000 to around 7,000 over the last few years. This process is set to continue.

Debate interrupted.