Tuesday, 27 May 2008
Questions without Notice
My question is to the Prime Minister. Is the Prime Minister aware of the Queensland government’s investigation into the Fuelwatch scheme headed by the now state Treasurer, Andrew Fraser? Why has the Prime Minister decided to introduce Fuelwatch across Australia after Queensland Premier Anna Bligh declared that ‘fuel prices would generally not be lower under the scheme’ and that ‘the scheme would be costly to establish and operate’ and ‘would have no tangible benefits to the community’?
I thank the honourable member for his question. There has been widespread community support for the government’s approach on this, starting with the leader of the New South Wales Liberal Party, Barry O’Farrell, who said that Fuelwatch would put motorists, not the oil companies, back in charge. That is before you go on to the New South Wales Liberal opposition fair trading spokeswoman, Catherine Cusack, who says that Labor has shown leadership on this question. The CEO of Choice magazine, Peter Kell, says that Choice would strongly support—
Opposition members interjecting—
Of course all these folk are irrelevant to the general debate, I presume! The President of the NRMA says:
Our research this shows that FuelWatch is of benefit to motorists and if introduced in the eastern states then they will get the benefits of the people in the West who have been receiving that benefit for some years.
Then you have David Moir, Executive Manager Advocacy, RACWA, who says:
Our recommendations to the commission—
that is, the petrol price inquiry—
are that the FuelWatch system is not only maintained in WA but a similar system is adopted in other states.
If you look at this range of comments it is quite clear that there is a huge array of support for the scheme across the country.
As I said in response to a question yesterday, there is obviously going to be conflicting information and advice on this. We understand that. We said that before, we said it again yesterday and I will say again today. That is because we are moving in an area where the Liberal state government of Western Australia decided to move in the year 2000 and then subsequent to that we have had recommendations from these bodies for this action to be taken nationally. We have always said that there is no silver bullet on petrol, but we have also said that, if you look at the evidence produced in this lengthy inquiry of several hundred pages, commissioned by the member for Higgins—he who seeks to return, we think, to the frontbench, depending on whether he beats the member for Mayo to the frontbench—if you look at page 247 of this report and its conclusions on the net impact on price, which is over the period survey of 2001-07 a net impact on price of 1.9 cents per litre less, then this provides a basis for a reasonable course of action. But, as we said on the day that we launched this policy, it does not represent a silver bullet. It does, however, help competition policy at the margins.
My question is to the Assistant Treasurer. Will the minister outline to the House the benefits of the government’s proposed Fuelwatch scheme, and will the minister clarify any issues raised regarding the scheme?
I thank the honourable member for Hasluck for her question. As a Western Australian member, she well understands the benefits of Fuelwatch, as did the Liberal Party in Western Australia when they introduced the scheme, and as does the Leader of the Opposition in New South Wales. Fuelwatch brings increased competition to the petrol market by requiring petrol stations to notify the ACCC of their next day’s price at 2 pm every day, forcing petrol stations to pick their cheapest, best price in order to ensure that they get turnover in an industry which relies so strongly on turnover. As I said yesterday, one of the great benefits of Fuelwatch is that it enables consumers to find the cheapest petrol. The difference between the cheapest and the most expensive petrol in any given city can be 10c, 20c or 30c a litre quite regularly. This enables motorists to find that cheap petrol where at the moment they have absolutely no chance of finding the cheap petrol as they drive around the city looking for it.
At the moment, of course, this is all a one-way street. At the moment petrol stations and oil companies share information. They share their pricing information and motorists and consumers are not allowed to see it. This is a very important point and it is a point that the ACCC made some very interesting findings on in their significant report. This is what they had to say in their petrol report, which was released last December:
The direct exchange of price information between suppliers is conducive to anti-competitive coordination ...
They went on to say:
... the circulation of price data on a very frequent, or near real time basis, raises concerns that it could be promoting anti-competitive behaviour among the refiner-marketers and supermarket chains in the retail market.
So the ACCC said that we have a situation which is conducive to anticompetitive coordination. Any party which chooses to oppose Fuelwatch in this parliament is saying that they support a situation which allows anticompetitive coordination. They support a situation which means that motorists are locked out of the information which petrol stations share with each other. As the Prime Minister indicated, there is considerable evidence based on the findings of the ACCC that FuelWatch in Western Australia has put downward pressure on prices—by a modest amount, but downward pressure nevertheless.
Some members opposite, the Leader of the Opposition in particular, have questioned whether those benefits are available to people who buy only on Tuesdays, only on the cheaper days of the week. It is a fair enough question for analysis. The ACCC found that their analysis was robust every day of the week. Regardless of when people buy, they found downward pressure on prices. Perhaps it was put a little more eloquently and a little more colourfully by the shadow minister for fair trading in New South Wales, who said this about the claims of honourable members opposite—this is a good one; wait for it: ‘My federal colleagues appear to be unaware of what’s going on in the Sydney market.’ It is those opposite she is talking about. This is Catherine Cusack, the shadow minister for fair trading in New South Wales.
Is she a supporter of yours or not, Joe? She said, ‘My federal colleagues appear to be unaware of what is going on in the Sydney market. They’re having to buy petrol more than once a week.’ I hazard a guess it is in more places than Sydney that you need to buy petrol more than once a week. That is what Catherine Cusack said.
So we have the ACCC and the Liberal Party in New South Wales in complete agreement. All we need to close the circle is the agreement of honourable members opposite. Another matter raised by the putative leader of the opposition, the member for Wentworth, is the effect on independent retailers—a concern as to whether independent retailers are disadvantaged under Fuelwatch. Again, if you read the ACCC report and you read the submissions to the ACCC, you find that the proportion of independent retailers in the fuel market in Western Australia under FuelWatch has gone up—not down. So the concerns of honourable members opposite would be assuaged if they read the ACCC’s report or may be assuaged when they receive their briefing from the ACCC. The key question here is: why do the Leader of the Opposition, the shadow Treasurer and other members opposite appear to support an arrangement which is conducive to anticompetitive conduct and anticompetitive coordination?
I understand that there is scepticism from honourable members opposite. The Western Australian motoring organisation RACWA, which is well known to honourable members from Western Australia, has supported FuelWatch and it is the motoring organisation which has worked with FuelWatch for the last eight years. This is what Mr David Moir, Executive Director of RACWA, said:
We believe that consumer pressure is the best to keep the market competitive, but that relies on transparency and easily available price information.
Our recommendations to the commission are that the FuelWatch system is not only maintained in Western Australia, but adopting a similar system in other states...
It is time for the opposition to indicate whether they will stand with motorists against anticompetitive conduct or stand with those with vested interests.
Mr Speaker, the Assistant Treasurer appeared to quote extensively from documents. Could I ask you to invite him to table his letter to Martin Ferguson, please.
As a Western Australian member, my question is to the Prime Minister. Is the Prime Minister aware of the case where a Perth service station owner was fined almost $5,000 for the crime of simply dropping his petrol prices in the course of a day? Can the Prime Minister confirm that his legislation establishing the failed Fuelwatch scheme nationally will contain similar penalties as those in WA? Prime Minister, how is it in the best interests of motorists to prevent service stations from lowering their petrol prices?
I think a WA member would be well advised to listen to the comments which have come from the WA motoring association. The WA motoring association’s point of view is very clear. David Moir, Executive Manager for Member Advocacy for the RACWA, put this view to the ACCC inquiry public hearing on 28 August when he said—
The member for North Sydney will resume his seat. On his point of order, he knows that the honourable member for O’Connor was abusing the opportunities that are allowed for the raising of points of order. Any fair observer of what the member for O’Connor did would realise that that was not a proper point of order.
Just as the member for O’Connor was sat down, I was sat down before I had completed my point of order. I request that you as Speaker listen to our points of order before asking us to resume our seats.
I am interested in this discussion, but I am saying to members on my left, who seem a little agitated, that if they were to read (1) the standing orders and (2) House of Representatives Practice, they would know that the course of action that I am taking has been taken in the past. On the substantive point that raised the ire of the member for North Sydney, he knows that the member for O’Connor, in raising the point of order, was not doing so in an appropriate manner and I have warned him.
On a point of order: I do not wish to reflect on the chair at all, but standing order 86(a) says:
A Member may raise a point of order with the Speaker at any time. After the question of order has been stated to the Speaker by the Member rising ...
Clearly, the member for North Sydney just stood and said, ‘I have a point of order,’ and you sat him down. I think it is fair to say that you need to hear the point of order stated before you can sit a member down.
If the honourable member from Western Australia would reflect on what the head of his own state motoring organisation has said on FuelWatch, it would be a very useful advance to the debate. The reason, I presume, that people support Fuelwatch is based not just on the positions plucked out of space by those opposite but on the findings based on detailed econometric analysis by the ACCC. Of course, each one of those opposite knows better than this econometric analysis. Despite the fact that those opposite commissioned this volume, despite the fact that taxpayers’ dollars were spent in putting this volume together, despite the fact that Graeme Samuel, the appointee of those opposite, ultimately produced a finding which contains the conclusions I have just referred to about the price being 2c a litre down, on average—despite all of that—those opposite, as some practice, process or expression of ideology, say it is of no relevance whatsoever.
The honourable member raised a question about the cost impost on business. The honourable member may not be aware that currently a large number of petrol stations are now submitting their prices to a data collection company. This can be as frequently as every 15 minutes. In exchange for a fee, petrol companies have access to their competitors’ prices. As the Assistant Treasurer said before, apart from anything else this places those in the petrol industry, including the retailers, in a position of competitive advantage over motorists, because motorists do not have access to that amount of information. So what we have from the party of free enterprise opposite is an argument which says that those in the petrol industry—the petrol majors and retailers—should control all the price sensitive information and that consumers out here should not have access to that information. That constitutes the essence of the proposition which underpins Fuelwatch. Under FuelWatch, petrol stations need only submit one price every day to the ACCC and not be charged for it. There is a plain contrast between the two. The contrast here between our position and that of those opposite is pretty stark. We are simply saying, ‘Here is a—
The contrast between the two positions here in this parliament is pretty clear. On the one hand, we say that consumers should have some power; they on that side of the chamber say the consumer should have no power. We on this side of the chamber say that, if this succeeds in bringing down the price by 2c a litre on average over time to the consumer, it is worth backing; they say on that side of the chamber it is not worth backing. We say on this side of the chamber that, if you have got price variations within one market of between 15c and 20c per day, which has pertained in recent days in various parts of metropolitan Australia, the consumer should have the opportunity to make a choice about where they go to buy their fuel; those opposite say the consumer should have no such choice and no such information upon which to base that choice. We stand for transparency; those opposite stand for nontransparency. We stand for choice; they stand for nonchoice. I say this to those opposite: when the question has been posed—including to the leadership aspirant of the Liberal Party, the member for Wentworth—about which way the Liberal Party will vote on this in the parliament, the response on the part of the opposition is, ‘We don’t know.’ They are so committed to this proposition which they are debating in the parliament that they have not even formed a position about whether they are going to support the legislation—yes or no. The position we have put is clear cut: 2c; 15c to 20c variation; transparency; consumer choice. They stand for not giving the consumers that choice. Those opposite need to resolve once and for all whether they are going to support this legislation or not.