Tuesday, 3 June 2008
National Fuelwatch (Empowering Consumers) Bill 2008; National Fuelwatch (Empowering Consumers) (Consequential Amendments) Bill 2008
Debate resumed from 2 June, on motion by Mr Bowen:
That this bill be now read a second time.
This is one of the most important debates going on in our country at the moment, because families at the last election were led to believe that this government was going to deliver lower petrol prices and people today are paying more for petrol than they ever have at the bowsers. I want to go to a couple of points which are very relevant to this particular debate. I think the Australian people are starting to see through this government. They are realising that this policy certainly is phoney.
The coalition supports consumers having information about petrol prices, as I said in the first part of this debate, but the coalition does not support the price-fixing elements of the Fuelwatch scheme. The ACCC has had an interesting position, as I said, in relation to this. I want to go through some of that history very quickly. The ACCC has previously been opposed to this scheme. Again, as I said in my first contribution to this speech, in their report released in 2003 on terminal gate pricing arrangements in Australia and other fuel-pricing arrangements in Western Australia, they found a number of things. That is a particularly important part of this debate. It needs to be said that there has to have been some political pressure exerted by a desperate minister on government departments to arrive at the outcomes that have been achieved now. The ACCC analysis, most importantly in my view, does not weight the average price. So a service station selling no fuel at, say, $1.80 per litre is included in the analysis alongside a service station with a low price of $1.50 per litre selling large volumes of petrol.
An area of particular concern to all of us should be the impact of Fuelwatch on independent retailers of petrol. Independent petrol retailers, with no ties to the big oil companies, are worried about Fuelwatch. They think Fuelwatch is a stunt. It has not worked in Western Australia. They will be delivering a very strong message to members of this government at the next election when it turns out that their consumers are paying more for petrol and the independent retailers have higher compliance costs.
Independent petrol retailers are very concerned. Cono Santoro, the owner of an independent petrol retailer with no ties to the big oil companies, Santoro Petroleum, said in the West Australian newspaper on 28 May 2008:
... while FuelWatch had helped smooth the peaks and troughs of the price cycle, it had taken away independents’ ability to compete as they could not alter their price during the day.
This demonstrates why the scheme is anticompetitive. Petrol retailers will be prosecuted if they drop their prices. The Australian public would be horrified to know that a key element of Fuelwatch is that petrol stations, throughout a 24-hour period, or some say throughout a 48-hour period, will not be able to drop the price of petrol. How can that be competitive? How can that be to the advantage of consumers? That is exactly why the independents will suffer under this scheme.
Major retailers, of course, will be able to adopt sophisticated pricing strategies. They can spread their pricing risks across their many stores. If independents get their pricing wrong, they will be left out in the cold, unable to reduce their price to compete with the majors. I ask again: how can that element of this legislation be competitive? The regulation impact statement is particularly interesting as part of this debate. It notes that the effect on independents is quite severe. In fact it specifically says that Fuelwatch ‘harmed the competitive position of independents as it allows large operators to adopt a strategy of rolling price leaders’. And it goes on:
... under such pricing strategies, media reporting of retail stations with the lowest prices provides an opportunity for large competitors with bigger retail networks to have rolling price leaders in the market, with different stations under the same banner being publicised as the cheapest for a region or suburb at a different time. Operators with small networks are less able to employ this pricing strategy and are therefore placed at a competitive disadvantage in the market.
Let me explain that simply to consumers. Motorists in the west watch the television news of a night-time, which quite often broadcasts the prices at a particular station for the next 24-hour period. They will have a particular oil company, brand X, which is a major player in the market, and which might have 15 different sites in Perth, but they will only list the three or four most competitive. People watching the news of a night-time say, ‘Okay, brand X has the cheapest petrol in the market tomorrow.’ But some of the experience has been that, while at the three or four sites they do have the cheaper amount of petrol at their sites, people in their mind conjure up a view, wrongly as it turns out, that all of the petrol stations within that brand have a cheaper price over the next 24-hour period.
So those people whom this government is supposed to be helping most—those people who are on pensions and those people who are socially disadvantaged otherwise—go to another service station within that brand and discover that in actual fact, at their local X branded service station, the petrol price is quite high, if not the highest in that particular marketplace. That is why this government has got its policy on Fuelwatch so wrong not just for people who most deserve help at the moment in filling up their petrol tanks but also for the people who run these petrol stations—the independents, who provide competition, who are essential to keeping downward pressure on petrol prices. They are also the people who will suffer as a result of Labor’s political stunt otherwise known as Fuelwatch.
The government, of course, is not going into Fuelwatch blind. It has received advice recommending against Fuelwatch from people no less than the key economic departments and even key ministers who have written to each other advising strongly against the implementation of Fuelwatch. They have examined the impact of regulation on the industry and there is no guarantee that petrol prices will not rise under this scheme as a result of its fixing. Therefore, it is simply bad policy. Why would a government introduce a scheme to the eastern states of this country that potentially results in an increase in the price of petrol to consumers? Why, when they went to the last election promising that they would bring petrol prices down, would they implement a scheme which has the potential of forcing prices up? That is a very important question that needs to be asked as part of this debate. Why, at the last election, when Kevin Rudd promised lower petrol prices, would he deliver a scheme that introduced higher petrol prices to consumers?
We have taken a decision as an opposition that it is important for consumers to be given as much information as possible to allow them to have informed choices when they go to the bowser to buy petrol wherever possible at the cheapest price. We are fully supportive of an informed market—of providing consumers with as much information as possible so that we can allow increased competition in the fuel market. We need to make sure that that information is distributed not just to people with access to the internet but, importantly, to older Australians who may not have access to a computer and to families who cannot afford to have internet access at home. We need to make sure that they are properly armed with information to allow them to buy petrol at the cheapest possible price. That is why I move:
That all words after “That” be omitted with a view to substituting the following words: “the House declines to give the bill a second reading and rejects in particular the obligation that fuel prices be fixed for 24 hours.”
It is why we are opposing the price-fixing component to Fuelwatch. It is why we are saying to the Australian motorist: ‘You believed at the election that Kevin Rudd would reduce petrol prices, that he would reduce grocery prices. Over the last six months it is the case that petrol prices have increased, that grocery prices have increased.’ It is only now that the Australian public are starting to see a very different Prime Minister to the person they saw as opposition leader in the last election campaign.
This is a person about whom the Australian people, in my view, know very little. They know that he is a person who has been able to master the 24-hour media cycle. They know that he is a person who has been able to pull off political stunts, probably in a similar way to the way in which Peter Beattie, Bob Carr and Steve Bracks did. All of those hollow promises that people have seen at a state level over the last several years, and in some cases over the past decade or more, they are now starting to see at a federal level. I think the Australian people did not believe that that was the product they were investing in at the last election, and they are very suspicious about the man who now occupies the most important position in Australian public life in this country. We need to make sure that we continue to scratch below the surface in relation to this Prime Minister. We need to make sure that the Australian public are fully informed that this is a government which dictates style over substance.
There is no better demonstration of that policy of style over substance than Fuelwatch. This was a government who realised that they had a real political problem on their hands. Knowing that petrol was influenced by international factors before the election, Mr Rudd, having full knowledge of that, still went to the Australian people making a promise that petrol prices would be lower. He said to the Australian people, ‘Vote for me and petrol prices will be lower.’ The difficulty, of course, is that when they got into government they realised how difficult that could be and they have come up with his quick fix, which is going to ultimately potentially result in higher petrol prices, to get them out of a political bind. That is why they should be condemned for Fuelwatch. It is bad public policy. It is bad for families who have been relying on cheaper petrol prices. It is why we have moved the amendment and why we are very serious about continuing the debate in relation to petrol prices in this country.
I rise to support the National Fuelwatch (Empowering Consumers) Bill 2008 and cognate bill, because that is what the bill does: it empowers consumers. That is why it will be welcomed by the people of my electorate. It gives them the information they need and it promotes competition. It gives them the information they need about where the cheapest petrol is. And it creates competition in the petrol market. They do not want to pay any more than they have to, and they do not want to pay more because the cost of petrol is being manipulated by parallel pricing or anticompetitive conduct.
That is why the people of Blaxland will support this bill. As the minister said in his second reading speech, this bill will ‘put power back into the hands of Australian motorists’. It will help motorists buy the cheapest petrol at the cheapest petrol stations at the cheapest times. It ends the game of pot luck—guessing what place is the best place to buy petrol today. It will end the frustration of driving past a petrol station in the morning and coming back in the afternoon to find that the petrol price has gone up or, even more frustrating, idling at the petrol station and seeing the price go up while you are waiting in the queue.
There is more volatility in petrol prices than there is in the Liberal Party leadership. In Sydney today you can buy petrol for anywhere between $1.64 and $1.45. This legislation will help motorists to find the cheapest petrol. The young people in the gallery will appreciate this. Their mothers and fathers, because of this legislation, will be able to find out where the cheapest petrol in their suburb is by checking on the internet or by using their mobile phones—by getting an SMS. If they have a satellite navigation system in the car that will also tell them where the cheapest petrol is en route to their destination.
On this side of the House we—the Kevin Rudd Labor government—think that that is a good thing. On the other side of the House the opposition think that it is a bad thing and they are going to vote against this legislation. Interestingly, not all coalition members of parliament think this is a bad thing. There are a lot of coalition MPs around the country who think it is a rather good thing. And that is because it gives motorists information and it encourages competition. The leader of the Liberal Party in New South Wales is one such supporter. He says that Fuelwatch ‘will ease some of the wild fluctuations in weekly pricing which frustrate motorists so much’. He says:
This will ease the burden on families and pensioners by helping drive down prices ...
He goes on:
Fuelwatch will put motorists—not the oil companies—back in charge ... It will put an end to the common frustration for motorists of driving past a petrol station only to find when they return hours later the price has jumped by 10 cents a litre.
Good on you, Barry! We agree. We think that that is right. And he is joined by his fair trading spokesperson, Catherine Cusack. She says:
Mr Rudd has shown leadership … we think it’s good news for motorists and we’re quite happy to come out and congratulate the federal Labor government for doing it.
Government member interjecting—
The member makes a very good point. Mark McArdle, who is the leader of the Liberal Party in Queensland, is a supporter as well. He says:
The issues around FuelWatch are very complicated, but certainly it is an initiative that appears to have worked in Western Australia and I think it should be looked at here in Queensland and across Australia as well.
A FuelWatch system is long overdue particularly in the Territory where we regularly pay the highest prices in the nation.
The member for Solomon knows this very well. Mr Mills continues:
Giving customers information on fuel prices for a 24 hour period will produce sharper competition in the market place.
FuelWatch will enable consumers to quickly compare the various prices on offer in their town and buy accordingly. People are price sensitive about petrol so I am sure consumers will head to the stations offering the best price.
There is a coterie of conservative politicians who think this is a good idea, but they are not on their own. Choice magazine thinks it is a good idea. So does the NRMA. So does the RAC WA. Why do they support it? They support it because it gives motorists information and because it encourages competition. Information and competition are normally good things—normally the sorts of things you would expect the Liberal Party to support. But they also support it because they know it works.
We know it works because we have a real-life test case. If it does not work why is it still operating in Western Australia? The member for Stirling might be able to help us when he makes his contribution to the debate. This is a scheme that was established not by the current WA Labor government but by the former Liberal government. If it does not work why do you think the Labor government would feel any sense of obligation to stick with a scheme that was established by the former Liberal government? It is still in place because all of the evidence points to the fact that it is working.
The ACCC investigation that was commissioned by those opposite—it was commissioned by the member for Higgins before the last election—shows that it works. It found that between 2001 and 2007 the average price for petrol in WA was about 2c cheaper. The ACCC also found that petrol prices decreased by an average of 0.7c per litre for the lowest day of the week. And, most importantly, it found that current arrangements are conducive to anticompetitive conduct. This is what Graeme Samuel said last week about the current arrangements:
The fuel companies have it all over us. They have a very sophisticated price-sharing system run by a company called Informed Sources ... where they know the price that everyone of their competitors is charging at every service station in the metropolitan areas of Australia at any point during the day. That is as close to collusion, it’s as close to tacit coordination, as you can ever get.
And this is the type of regime that the opposition are proposing to protect. Petrol retailers know what their competitors are charging but their customers do not. This legislation is designed to fix this.
Other petrol watch websites, like MotorMouth, show that about 87 per cent of their customers, armed with petrol price information, have changed their petrol-purchasing habits. There is a reason for this. It is because information is power. If you give customers the information they need, they will make good choices. Australians are doing it tough, and the people in my electorate do it tougher than most. They are glad that they have finally got a government that knows they are doing it tough and is trying to do something about it. They have been waiting a long time.
What is the coalition’s record when it comes to petrol? We know that they introduced the GST on petrol. We know that they invaded Iraq. We know that the price of crude oil has gone up by about 400 per cent since then. We know that the coalition kept the ACCC on a leash. We know that they did not spend a cent on public transport and that, as a consequence, people in my electorate and throughout the major cities of Australia are trapped in congestion every day and burning up petrol as a consequence because this former government thought that their obligations ended at the perimeters to our major cities. And, when people complained, what did they say? ‘You’ve never been better off. There’s no inflation problem; there’s no housing affordability problem.’ But suddenly, after the election, they had a change of heart and they have come to a realisation that people are doing it tough. What a difference six months in opposition can make. Six months ago they said everything was fine: ‘Let’s keep spending.’ Six months later, suddenly everything is terrible: ‘Let’s start spending.’ They did a pretty good job of spending in government, increasing spending by four per cent year on year and fuelling inflation, and they would keep spending today—spending as if it is going out of style.
This is the crux of the debate that we are having today, because inflation is the biggest challenge that we currently face. It sucks the money out of the wallets and purses of Australians all around the country. Every interest rate rise that we have takes another $50 out of those wallets and purses every month. After 12 interest rate rises in a row, it is still a problem. We still have the highest inflation in 16 years. And what is the opposition’s plan on petrol? To make it worse—an $8 billion hole in the budget, putting more pressure on inflation and putting more pressure on people who are already doing it tough. Well, that is not what I call responsible economic management, and it is not what a credible economic manager would do. That is why every serious economic commentator in the country has criticised it.
The coalition were negligent in government, and now they are being irresponsible in opposition. We have heard from the previous speaker that they are now going to amend the bill. They are going to attempt to sabotage the legislation. They want to remove the price-setting measures from the bill. This is the plan that the big oil companies wanted us to adopt, but we did not. We did not adopt it, because it will remove all the pressure on retailers to offer their best price and be competitive. Why would you set your best price for the day when you can change your mind and change your price once you know what the competition is offering? In a competitive tender, you do not let bidders change their prices once the bids are in. That is because tenders are designed to be competitive. They are designed to encourage competitive tension. They are designed to get the best result. That is the same approach that we are taking with this legislation. We do not want gaming in the system.
It is worth while here to point to the comments made by David Moir, the Executive Manager of the Royal Automobile Club of Western Australia. This is what David Moir, who knows a little bit about petrol in Western Australia, had to say:
It makes the retailers think very seriously about what price they’re going to sell fuel for tomorrow. They’re obliged under FuelWatch to hold that price for 24 hours, so they can’t play games with motorists by shuffling the price up and down on an hourly basis.
That is a comment from someone from Western Australia who knows something about petrol. The background information to the bill also adds important information about this price-setting mechanism. It says:
The absence of price commitment rules means that scope for price coordination between petrol retailers would continue and that consumer anxiety relating to petrol price volatility would remain unabated as consumers would receive no further information regarding future fuel price levels or changes. Importantly, consumers would continue to have no greater certainty or increased confidence that they have purchased fuel at the lowest possible price available in their local area.
So what is this all about? I think the member for Lindsay said it best in his contribution to the debate last week. In the MPI debate, the member for Lindsay made a very insightful point—perhaps the most insightful comment from last week’s proceedings. He said that this is not about Fuelwatch—it is about ‘Malcolm watch’. That is what it is all about—get an issue, bite onto it hard, get red in the face, pretend that you are angry, excite the troops and put Malcolm in the cooler. That is what it is all about. It is not about Fuelwatch—it is about ‘Malcolm watch’. That is why the coalition are backing the big oil companies and the current oligopoly, that is why they are threatening to blow an $8 billion hole in the budget with their petrol reforms and that is why they are threatening to block other key elements of the budget. They are now threatening to use their numbers in the Senate to delay the childcare rebate, they are threatening to block the Teen Dental Plan and they are also threatening to block legislation to inject an extra half a billion dollars into the health system. All of these things are due to start on 1 July, and they are threatening to block them. They are putting their interests ahead of those of the people of Australia, and they are lining up with big oil to oppose this legislation. This is all about internal Liberal Party politics, not the interests of motorists.
This legislation is about choice, it is about information for motorists and it is about promoting competition. They are things that the Liberal Party used to support. They are things that the Labor Party supports, and that is what this legislation does. My constituents will welcome it. I commend the bill to the House.
I rise to second and support the amendment that has been moved by the shadow minister for finance, Mr Dutton. We see with the National Fuelwatch (Empowering Consumers) Bill 2008 and the National Fuelwatch (Empowering Consumers) (Consequential Amendments) Bill 2008, and with all the pain that the government have worn about this issue this week, a government paying the price for their misleading campaign in the lead up to last year’s election, because, having promised to bring fuel prices down, the government are now desperate to be seen to be doing something about it. They had no idea what they were going to do; all they could do was raise the issue. They did not know how they were going to respond. Now they are in government they are desperate to be seen to be doing something.
I think this actually provides us with the perfect example of the way in which this government operates. This is really a perfect example of the modus operandi of this government. This is why the government have been so damaged—because the government have been unmasked this week as a government completely devoid of any substance. The way the government operate is that they raise an issue and then they pretend that they are worried about it. They fret about it and then they come up with some ludicrous plan to say, ‘Oh look, we are doing something about it.’ And of course, in this case this ludicrous plan is Fuelwatch.
I am interested to see what is next. I understand there is money in the budget allocated towards ‘grocery watch’. I see that the Minister for Education, last night on Lateline, was seen to be threatening to have some sort of ‘child care watch’. It is this method of operation—where they just raise an issue, they feign concern about it and then they need to come up with a stunt to pretend that they are interested in it—that leads to appalling policy-making processes that give us legislation such as this Fuelwatch legislation. This is the scheme that was brutally unmasked by the resources minister and by the central economic departments so extraordinarily in the media last week.
I will get to the resources minister’s criticism in a minute, because I think what he had to say about this scheme was very telling. I will deal firstly with the criticism of the central economic departments. Their criticism was that this is a scheme that may actually drive up fuel prices. So we have this ridiculous situation where the government raise an issue, they have no idea what they are going to do about that issue and their only response is something that may have the opposite effect of what they are actually trying to do. We have heard some talk from members opposite about how this scheme operates in Western Australia. I will leave aside the fact that certainly the previous speaker—and I suspect other speakers—has no idea about the history of fuel pricing in Western Australia and no idea about the genesis of this particular proposal and why it was operating in Western Australia. I will leave that aside for the time being. I will also leave aside the fact that those opposite keep quoting the RAC in Western Australia in support of it, even though the RAC in Western Australia is actually opposed to this scheme.
I would just like to go to the issue of whether petrol is actually cheaper in Western Australia or not, because we hear a lot of talk about this and I think it is very, very important to raise it. Indeed, members have been saying consistently that petrol is cheaper in Perth. Last week the Assistant Treasurer actually claimed this on radio—and I think this is an example of the fact that they are really quite shameless in that they do not check the facts about what they are saying; if it supports the argument then they will just put it out there anyway. We had the Assistant Treasurer on radio saying, ‘Well, in Perth today you will find that the price of fuel is on average less than in other capital cities.’ He was trying to make the point about how the FuelWatch scheme had apparently been successful in Western Australia but, sadly, his statement was completely and utterly false. On the day that he was speaking, if you were to actually go and check prices around the country, you would have found that the price per litre of fuel in Perth was more expensive than in every other mainland capital. This is extraordinary. I will just run through it: it was $1.40 per litre in Brisbane; $1.49 per litre in Melbourne; $1.50 per litre in Sydney; $1.51 per litre in Adelaide; and in Perth, on the day that the Assistant Treasurer was saying that it was cheaper than in any other part of the country, it was actually $1.55 per litre.
I think Australians deserve more than a government that is prepared to mislead them like that, and they deserve more than a government that is pretending to care about an issue whilst actually doing things that may make that issue worse. Apparently the Prime Minister—well, not apparently; it is actually a fact—believes that he has done all that he can do on these issues. Yesterday he was in this chamber saying, ‘Oh well, this might not work but, hey, at least we are having a go.’ I think the Australian people deserve a bit more than that.
I just want to dwell on this issue of petrol pricing in Western Australia because I think it is pretty important that these issues are illuminated. The member for Blaxland was here—I assume he just gets his speaking notes from the Assistant Treasurer’s office and he comes in and reads them out in the chamber—again misleading this House, saying that the RAC—the Royal Automobile Club of Western Australia—support Fuelwatch. They quite patently do not. Indeed, there was a front-page article in the West Australian just last week with the headline ‘FuelWatch is a dud, say RAC and bureaucrats’. This is hardly a glowing endorsement of FuelWatch, even though members opposite continually raise the case of the RAC supporting this scheme. What do they actually think about this scheme? I think it is very important that this go on the record, and I hope members do not keep repeating this falsehood. What they have actually said is that new research that they have conducted contradicts the ACCC and shows that FuelWatch has failed to make petrol cheaper in Perth since it started seven years ago. This was a wide-ranging study that the RAC conducted, and what they concluded was that there was little or no difference between prices in WA and those in other parts of the country.
It is not just the RAC, which is the motoring organisation in the state where this scheme has been running, which opposes this scheme; it is also the Motor Trades Association in Western Australia. The MTA have been very vocal in their opposition to this and have a very consistent position about these things. They believe this scheme will advantage the oil majors and it will disadvantage independent retailers. They believe that this idea of keeping big oil accountable will do the exact opposite. And we actually have evidence of that from some of the big retailers themselves. This is the ridiculous thing that we get from this government talking about big oil, because, according to Woolworths, a reasonable sized company, FuelWatch has delivered higher prices to Western Australian motorists compared with prices paid by their eastern states counterparts. Even they said that it lessened competition among service stations and that WA was their most profitable state.
So, instead of keeping prices under control, current petrol prices in Perth are often more expensive than those in any other mainland capital. RAC Corporate Communications Manager, Adrian Firth, is quoted in the West Australian article, which I referred to previously, as saying that their research shows that, despite all the rhetoric, there has been no direct financial benefit from the advent of FuelWatch. This is the organisation that members opposite keep quoting in support of their argument—and I hope that the member for Lindsay is currently rewriting these sections of his speech, because I am sure that he has the same speaking notes as the previous speaker. Please do not come into this chamber and keep repeating that falsehood. The RAC do not support this scheme. The RAC have actually said:
Seven years after the launch of FuelWatch, the RAC’s monitoring of fuel prices shows that there is little or no difference between prices in Melbourne, Sydney and Adelaide.
What a farce! Members opposite consistently use this organisation as the major motoring organisation in Western Australia which support their argument, when they clearly do not.
So what is Labor’s argument for bringing this ridiculous legislation before the House? I think we know their political motivation: they have raised the issue and now they need to be seen to be doing something about it. But why are they proceeding with it in the face of all the evidence, even evidence from their own Public Service? Let us look at what that Public Service had to say. The central economic departments were scathing of this particular proposal. The Department of Finance and Deregulation, the Department of the Prime Minister and Cabinet, the Department of Innovation, Industry, Science and Research, and the Department of Resources, Energy and Tourism all slammed this proposal. I note that the Minister for Finance and Deregulation also added the Treasury—I am not sure whether it was done inadvertently—as being one of the departments which opposed this particular measure. He mentioned that on the Insiders program on the ABC on Sunday. So maybe we can also include Treasury in these objections from the central economic departments to this scheme.
These leaked cabinet documents really express the truth about what this scheme might do for petrol prices in Australia. These four departments warned cabinet that it was possible that the scheme could result in higher petrol prices. They also expressed concern about the increased financial cost it would impose on service stations, particularly small independent operators. Again, the government keeps claiming that this scheme will not increase costs for small business and, for that matter, large business. It keeps claiming that when it is patently not true and it is patently exposed within their own cabinet documents. The leaked documents show that the central departments did not support this scheme. One reason was that it would impose additional costs on retailers, costs which ultimately, of course, would be passed on to consumers. Let us look at what the Prime Minister’s own department had to say. It noted:
… that, while the proposed national Fuelwatch scheme will likely succeed in removing intra-day price volatility in the retail petrol market, which is a concern to many consumers, the impact of the proposed scheme on the overall pump price is not clear.
Econometric modelling undertaken by the ACCC is, quite frankly, inconclusive with respect to what it believes this will do to the overall pump price, but it indicates that a small overall price increase cannot be ruled out. Within these leaked cabinet documents, we also see that the proposed scheme will result in an increased compliance burden in the economy, with Treasury estimates indicating that it will result in ongoing increased operating costs of around $4,000 per annum per business. Yet we have members of the government having the effrontery to come in here and consistently claim that that is not true. These leaked cabinet documents also express concern that the scheme:
… will reduce competition and market flexibility, increase compliance costs and has more potential to increase prices.
According to the documents, the finance department ‘does not consider the proposed Fuelwatch scheme is good practice regulation’. And further:
This proposal will increase the regulatory burden, with inconclusive, unquantified and negative results …
Finance considers that the introduction of a price commitment rule may result in higher average petrol prices over time as the option may lead to the creation of a de facto price floor …
The documents also state:
The proposed Fuelwatch scheme would increase the regulatory burden to business in the magnitude of $20.7 million in the first year and $18.7 million per annum thereafter. The impact is likely to fall disproportionately on independent retailers.
The Department of Innovation, Industry, Science and Research, one of the other central economic departments, is concerned about the anticompetitive effects of the proposed Fuelwatch scheme, which prevents businesses from reacting to market forces to adjust their prices for a 24-hour period. Let’s just have a look at that concept. If you are a small, independent retailer, such as exists in my electorate of Stirling, your outlet may be in a small suburban shopping centre. Along all the major roads of course will be all the oil majors. They have the ability to get market intelligence faster than you have. Small retailers in my electorate—and I have used this example before, because I think it exposes this scheme for the farce that it is—can be fined if they reduce their prices to compete. That is what FuelWatch gives us in Western Australia and that is the scheme which the Labor Party wants to take nationally. These leaked cabinet documents reveal that the government ignored the advice that a national Fuelwatch scheme not only will result in lower prices but may actually drive up petrol prices.
The Assistant Treasurer introduced these bills last Thursday evening, at about seven o’clock I think, and we are debating them here today within a very short space of time, as seems to be the operating procedure for this government. These bills have all the hallmarks of being a rushed job. The explanatory memorandum to the bill states under the heading ‘Summary of regulation impact statement’ that the estimated compliance cost for business is zero—something that completely contradicts the regulation impact statement tabled in this place, which said that there is a substantial compliance cost for every single petrol retailer. How can the statement that the compliance cost will be zero be reconciled with what this parliament already knows? What this goes to is the pattern of deception around this program. Members opposite must be getting the idea that this is a dud program by now, yet they come in here and defend it with increasingly spurious assertions, many of which turn out to be completely false.
With this legislation it is very clear that we have a government in trouble. We have a government that have raised issues that they have no idea how to address, and they must then go in search of programs they can point to and say, ‘Look, we are actually doing something about this issue.’ Fuelwatch is, of course, the greatest example. I think it bodes very ill for what they might do about some of the other issues they have raised, such as grocery prices. What we see after six months is that the policy-making processes of this government are a complete and utter shambles. This is, of course, the first look we have had into how these policy-making processes work. We have had hints, but these leaked cabinet documents really show us what is going on behind the scenes. We see it in the House, too, where we have quite a chaotic schedule of bills which can seem to change as the day goes on. We see it in the House when the government come in here and ram legislation through in a way that was unthinkable under previous governments.
We also see a government that consistently prize one thing, and that is spin. They prize spin and style over everything else. Substance does not get a look in with this government. It is sad that they are basing the way they operate as the Commonwealth government on state administrations. They are basing it on the Beattie administration, on the Carr and Iemma administrations, on the Bracks administration and on the Carpenter administration—governments that have delivered so little in the states in which they have governed for quite some time but that always prioritise responding to the 24-hour media cycle and always prioritise spin. When serious issues are raised they just find something to do—a gimmick, a stunt—to say, ‘Yes, we know that is a serious issue but look, we are addressing it.’ This is what we are now seeing with the federal government. The Australian people will have this revealed to them over the course of the next few years.
What the Australian people deserve is a government that does something to address the issues that it promised it would address prior to the last election campaign. We have a Prime Minister who comes in here and argues consistently that the government is concerned about these issues yet says he has no real scheme to deal with them. I think, and the opposition thinks, that Australian families deserve better. There is nothing wrong with the wider spread of consumer information that is contained in this bill—nobody would seriously argue about that—but there is something wrong with the price-fixing considerations within this bill. They do not do the job that they are supposed to. In fact, it is the reverse: these price-fixing mechanisms may actually result in people paying more per litre at the bowser in Australia. This country deserves better than these sorts of stunts, it deserves better than what we are getting from this government, it deserves better than having a stuntman as its Prime Minister. I support the amendment moved by the shadow minister for finance. It is an amendment that keeps the sensible parts of the bill and jettisons the nonsense parts. It is worthy of consideration and it has my wholehearted support.
I rise to support the bill and to offer my objections to the amendment that has been moved by the member for Dickson and seconded by the member for Stirling. I thank the member for Stirling for his punctuality in being in the chamber when he was given the call but, unfortunately, whilst I commend his punctuality, his commitment to delivering the truth in this place has been somewhat compromised. A number of comments that he made are nothing short of misleading to the House. In particular I draw attention to his comments in relation to the position of the Royal Automobile Club of Western Australia and the comments of Mr David Moir, the spokesperson for that organisation. The member for Stirling was quick to point out a front-page article that appeared in the West Australian on 29 May with the headline ‘FuelWatch a dud, say RAC, bureaucrats’. What he did not point out was that in the West Australian the following day, 30 May, on page 6—sometimes corrections of this nature do not get the same prominence—was the following statement:
Yesterday’s front-page headline (FuelWatch is a dud, say RAC, bureaucrats) was misleading. The RAC supports FuelWatch and although it does not believe FuelWatch has led to lower prices in WA neither does it believe it has caused prices to rise. The RAC says it continues to back FuelWatch because it gives motorists the opportunity to compare prices in advance and to save more than $250 a year if the information is used.
Far from being a criticism of the FuelWatch proposal, that sounds to me like a ringing endorsement. But perhaps in isolation those observing the debate may not be prepared to accept that on face value. So I go on to look at some of the other comments that Mr Moir has made in relation to whether or not this will have a positive impact on attacking anticompetitive effects. Mr Moir said:
It makes the retailers think very seriously about what price they’re going to sell fuel for tomorrow. They’re obliged under FuelWatch to hold that price for 24 hours, so they can’t play games with motorists by shuffling the price up and down on an hourly basis.
They cannot play games with motorists. It is interesting that, on the one hand, we have those on the other side who are suggesting that this is an evil attempt to fix prices. It is nothing of the sort. It is not about fixing prices; it is about attacking volatility in a market that is not delivering a fair go for consumers. That is in fact one of the key elements of the Fuelwatch proposal. There are two elements that are being addressed in this proposal. The first one is transparency and the second one is volatility.
In terms of the volatility argument, we have all experienced instances where we are driving along and we see petrol station attendants come out and change the price of petrol before our eyes. You will be driving down one side of the road and at the same time you are seeing the figures on the other side of the road being changed and the petrol price is being upped without any warning, notice or explanation. This is the volatility that concerns many people. One of the issues that many people in my electorate have raised with me over the years is their concern that something fishy is going on here—the fact that the prices keep going up and that when a service station on one side of the road puts the price up the service station on the other side of the road follows shortly after.
This is the sort of volatility that needs to be addressed because it does not give motorists a fair go. Can you imagine walking into a hamburger store to find that McDonald’s and Hungry Jack’s have got together and decided that, come six o’clock, come dinner time, they are going to whack up the price of a Big Mac or a Whopper? It would be extraordinary to think that that sort of volatility would enter into the equation in other marketplaces, but when it comes to petrol prices we are seeing an imperfect market. Those on the other side are saying that this is intervening in the marketplace unnecessarily. The reality is that the market is not delivering a fair go for motorists, and one of the reasons why it is not delivering a fair go is that the cards are stacked against them. Under the current situation the oil companies and the petrol retailers have access to information that the consumer, the motorist, does not have access to. This is a situation that gives rise to a marketplace where perfect information is not available. The information available to the consumer is not as widespread or as available as the information available to the retailer. In that context we end up having parallel pricing and, as a result of that, consumers are being dudded.
No-one on the other side of the chamber has a proposal to address that issue. Under the Fuelwatch proposal, retailers will be required to indicate what their price will be for the following day. They do that at 2 pm, and by 4 pm those prices will be made available to consumers through a range of mechanisms, whether it be through the website, through SMS messages or even material that will be available to be downloaded to GPS navigation systems within a person’s vehicle. This is an initiative that will deliver real assistance to the motorist in trying to hunt down the best possible price. We all have examples in our own lives—whether it be family, friends, television stations or radio programs—of everybody trying to ensure that consumers have the opportunity to share in that precious information of knowing where the cheapest prices are.
My wife will often drive home and tell me that she saw quite cheap petrol at a particular service station. On my next journey I will try to go past that station in order to fill up whilst the petrol is cheap. That would be something that would be replicated in every household in this country, because the more information we have the greater is our capacity to seek out cheaper prices. In the absence of this sort of information what are we meant to do? Are we meant to drive around, wasting more fuel and looking for the cheapest price? It is ludicrous. This is a proposal that will deliver important, valuable information to consumers so that they can find the cheapest petrol at the cheapest petrol stations at the cheapest times.
In terms of the implementation of the Fuelwatch proposal, once prices have been released at four o’clock, they will come into effect at 6 o’clock the following morning. Between 6 o’clock the following morning and the one following that those prices will remain the same. That means that, if you are driving home from work after four o’clock in the evening and you are aware of what the prices are and that they are going up the next day, you can go out and seek out cheaper prices that evening or, if you know the prices are going to be cheaper, you can hold off and buy your fuel the following day. This is a practical measure that will allow motorists to improve their own financial situation by being able to seek out the best possible deals when it comes to petrol and to do so without having to run around in their car or rely upon often insufficient or inadequate information that is provided through informal sources. It is a great initiative, one that I wholeheartedly support.
There is the transparency issue. As I mentioned earlier, we have informed sources, on the one hand, that are providing the material to the retailers. Why can’t we as consumers have access to that information? The suggestion that you should get rid of the requirement that prices be kept at one level for an entire day would ruin the scheme. If you went down that path, the Fuelwatch scheme would not be providing consumers with information that was worth pursuing. If consumers had no guarantee that the prices that were cited on the website or in the SMS were going to hold for a period of time, then you might as well not pass on that information. It is no different from the websites that are currently available—but I have to say that they do not deliver real benefits to motorists and fewer motorists use them than would otherwise be the case under Fuelwatch simply because of the lack of credible information that they provide.
I want to conclude by remarking on the criticism that the government has not taken into account the advice of the central economic agencies and other departments. It seems to me that it should be a given in our Westminster system of government that advice is provided by bureaucrats, and it is taken on board, but decisions ultimately are made by ministers and members of parliament, who are elected and accountable to the people. It seems to me a rather bizarre suggestion that all advice should be taken without any critical debate or discussion about that advice. If that were the case then there would not have needed to have been a change of government back in November last year; clearly the bureaucracy would be determining what goes on in this country. Fortunately that is not the case, and fortunately it is the case that our government and our cabinet have had a robust discussion about this particular initiative. I might say that there were plenty of key policy decisions taken on the other side when they were in government that were not even subjected to the scrutiny of cabinet discussion—the so-called $10 billion water plan did not even go to cabinet. I would like to know what all of the departments would have said about that plan. We did not even see any coordinating comments on those because the matter did not even go to cabinet.
There was a robust process and in the end a decision has been taken that may be contrary to some of that advice, but that is what being in government is about: it is about exercising independent judgement and about making the hard decisions that are in the best interests of the people of this country. And that is why this decision has been taken. There is no doubt in my mind that it is a decision that is in the best interests of people in my electorate and the best interests of people right around this country. It will attack the unfair and unreasonable volatility of the petrol market as far as consumers are concerned and it will ensure greater transparency so that consumers at least have access to some of the information that those on the other side, the retailers, have. This is about balancing information and the equation within the marketplace so that consumers can get a fair go. In the end I am not surprised that those on the other side have come in here in defence of the big oil companies. But we are very happily in the corner of the consumer. That is why we support this initiative and that is why we support the Fuelwatch scheme.
I welcome the opportunity to speak in favour of the amendment to the National Fuelwatch (Empowering Consumers) Bill 2008 and to try to cast some sensible debate back into this chamber following the last speaker. It amuses me, and of course it alarms me, that we have on that side of the House people who pretend to go by the title of economic conservatives yet every time I stand at this dispatch box and speak I am following a speaker who displays little or no understanding of how a commercial market works. They want to intervene in the way in which we know Labor governments of the past have continually intervened, to the detriment not only of the market but also of the consumers and, of course, ultimately of the economy. You need to have a free market, to have normal economic levers. I know that some who sit opposite—not all but some—have socialist backgrounds and we know that socialist economies are centrally planned economies. I know we have got a centrally planned government; I know that everything that happens in this place goes across the desk of the Prime Minister first. But I think we need to think long and hard before we take our economy back to being a centrally planned economy.
I listened very carefully to the member for Lindsay during his address, which I think went for about 12 minutes. Of course, there was the mandatory slur on big oil and all of that. That is just par for the course and happens every time a Labor Party member stands up. They attack anyone who is successful, even Australian companies, even little companies that started in little towns in Victoria like Woodside, which was actually named after the town of Woodside. Those companies took a battering yesterday and I guess they will get a battering at some other stage as well, although that debate was guillotined. But anytime a person from the Labor Party speaks they will always have a slap at anyone who is successful commercially in Australia.
What I did notice from the member for Lindsay was that in the 12 minutes of his address I would guess that probably 8½ or nine minutes of that speech were all about transparency and information in the market. I say ‘hear, hear’ to that. If that is what this legislation was about then we would not be having this debate; we would just wave it through. We would not need the Leader of the House to come in and guillotine the debate, because we would agree. In fact, that is what our amendment says: if there is the process to provide more information to the consumer, whether it is by the internet or by SMS or by satnav or by simply putting up signs, then we are all for that. But I was a bit perplexed by one of his comments where he said that if you put up information on the internet you would not be able to change it for 24 hours. He must have a different version of the internet than I have, because one of the things I do when I am in my office is check what is going on not only in Australia but in the world, and of course most importantly what is going on in Queensland at the moment—particularly in relation to the rain. The member for Lindsay should try it when he goes back to his office; he may be there already. He will notice that stories on the ABC website are updated regularly; in fact some of them are updated half-hourly. So a system whereby the price of fuel changes during the day as a reaction to normal market forces does not preclude that system from having updated information on the internet. And any of those members either opposite or behind me who have daughters, and probably sons as well—I have only daughters—would know that SMSs can be rattled out at a furious speed and that that information could easily be updated.
So this is just a nonsense. It is just a fallback to the Labor Party’s centrally-planned economy ways. They believe that you cannot have a scheme where the consumers can be empowered, where information can be provided but where you cannot interfere in the market. They just do not believe that those sorts of things go together. That is part of the modern future. Perhaps this scheme that they are promoting at the moment, which will cost every motorist in Australia money and make it much easier for those people those on the other side fear most—that is, the oil companies—to operate. If you talk to the oil companies, if you talk to the retailers of fuel, they think Fuelwatch is great, they love it. They know exactly how much they are going to get for their commodity. They deliver it to the site, they sell it in the next 24 hours, they know before they start exactly what their return is going to be on it. But that is to the detriment of motorists. We are able to put forward a scheme where you do have transparency, where the market delivers the normal commercial forces that see discounts on fuel on Tuesdays, where we see consumers able to manage their fuel budgets as much as they can in a market that continues to rise—you can do all of those things without intervening in the market and fixing the price of fuel under the pretence of fixing the cost of fuel to motorists.
The coalition support widespread consumer information on petrol prices, but we do not support the uncompetitive, consumer punishing price fixing element of Fuelwatch. I welcome the opportunity to speak on this bill because it gives me the opportunity to highlight what is a scam by the Australian government on the motoring public. It has already become all too clear to Australians that this government is a government of smoke and mirrors and illusion. But, unfortunately for Australia, the Prime Minister has shown his true colours too late—that is, after the election. He was elected on the pretext that he would bring down the costs of living for Australian families. I was out there in the electorates when the now Prime Minister was campaigning, and I can assure you that that was the message that the voters were picking up—that, if elected, a Rudd government would make petrol cheaper, would make groceries cheaper and would keep the costs of living for Australian working families down. In their eyes he promised to bring down inflation, he promised to bring down the price of groceries and he promised to bring down the price of petrol. What has happened is that he has now been shown to be a complete fraud on that.
The government has been trumpeting the Fuelwatch scheme as the solution for families and motorists, but in actual fact it is nothing of the sort. It would have been one thing to say that, if we had seen any of these things succeed, in any place in Australia, then we would at least have a little confidence in what is being put forward. But the truth of the matter is that there has been no solution from FuelWatch in Western Australia. We are seeing a situation where fuel in Perth on average is higher than it is in other states. There is no reason for that other than the fact that the market has been prevented from working, and motorists in Western Australia are paying more.
On the evidence that has been put forward in this House by the opposition the Fuelwatch scheme has descended into a debacle. It is a classic example of spin at the expense of substance. The government in doing so has traded its obligation for real governance in favour of cheap words and stunts. The unfolding farce surrounding Fuelwatch has exposed the Rudd Labor government for exactly what it is: little more than a mirage built on the foundations of spin and superficial style. It has become all too clear that this government never intended to live up to its promises, the promises it threw around so freely in the lead-up to the last election. A silver-tongued Prime Minister has known all along that he has no silver bullet, to use his words, to bring the price of petrol down. That is not the impression he gave before the election. As he travelled backwards and forwards across Australia last year, he built up that expectation and deliberately fed the belief that he had an idea and a plan for Australian motorists. The truth has been exposed now, and it shows that this government’s Fuelwatch plan is no more than a face-saving exercise that will not save anything for those people whom it should save—that is, Australian motorists. It is a cover for a shallow, self-obsessed, media driven government that has little regard for the people who have entrusted it to office, a cabinet comprised of political slaves to a public relations exercise who are now turning on each other, as we have seen, with damaging leaks.
The wheels are well and truly coming off this sham called Fuelwatch. It is for no other reason than it is just that: a sham. There is no substance to this scheme. There is no substance to telling motorists that, if we fix the price of petrol for 24 hours, it will be cheaper. There is absolutely no substance to that statement at all. We know of course that even in the Labor cabinet there are those who saw the potential damage that this scheme could cause. There was the Minister for Resources and Energy, whose comments have been widely spread in the past few weeks. I think one of the most interesting things I saw last week was a short piece on the Minister for Resources and Energy that said he was a man of honesty and integrity and a man who says it like it is. He certainly said it like it is. I think the same piece said that he perhaps was not the best politician around. I am not sure about that. I think that anyone who is honest with the public, anyone who strongly represents the views of the people that he represents, will be seen as a good politician. He stood up very strongly against this scheme and made it clear that this scheme would actually drive petrol prices up and make the situation even tougher for families and small businesses. So we have a minister here with common sense.
Of course he was not the only minister in that room; there was the ‘accidental Treasurer’ and there was probably the ‘minister for career advancement at all costs’. At least we had one minister who we know spoke out. Of course, we know that another minister, had he repeated the advice—and I always have hopes for the finance minister that he actually does understand the economy, and he is one of the few on that side who does—and spoken out on this issue, then he would have supported the advice that we know was given to him by his department. In fact four departments gave advice on this. In that advice—although we have only seen bits of one piece of it—we know that the departments saw the advantages of greater transparency in giving the motorists as much information as they could by giving them the confidence that they knew as much about what was happening in the petrol market as those selling it. I think that is all good. But we also know that four different departments, who are entrusted to give the government non-political, balanced advice, all opposed this scheme. Of course, when anyone gives this government advice that is contrary to their political goal, they are dismissed from the field immediately. We saw a situation where the Treasurer described them as ‘mere bureaucrats’.
One of the privileges of being in this place for me was that during the last government I was a minister. One of the great delights to me as a minister was to have departments made up of professional people—people as professional in their field as any professionals in any field I have seen. They took their jobs very seriously. They gave their advice on the basis that it was the best advice they were able to provide—not to produce a political outcome, not to produce spin, not to try and be part of this smoke and mirrors government that we have now but to actually just say, ‘I am a professional. I have been educated in these areas, I have experience in these areas and this is my honest opinion about what I think will happen.’
Those on the other side continue to attack the Public Service. The Public Service are just that: they are there to serve the public. The sorts of attacks we saw from the Treasurer, and then from the Prime Minister, on the Public Service sends a shiver down the spine of anybody who has any respect for the worthiness of others and for the professional advice that I know comes from those departments. Those who deem to be the government of this country now on the basis of economic conservatism proceeded to dismiss all that good advice from all those departments and from all those professionals by waving them away as ‘just bureaucrats’. I think that in itself should tell the people of Australia that there is an unwillingness within this government to take any advice that does not add to its political gain and its political spin. Before I move away from these comments from these professionals, from these public servants, who are there to serve the people of Australia as much as we are, I will just quote one department, and that is the Prime Minister’s very own department. The department are said to have stated explicitly, ‘The proposed scheme will also result in an increase in the compliance burden in the economy, with Treasury estimates indicating that the proposed scheme will result in ongoing increased operating costs of around $4,000 per annum to affected small businesses.’ Not only do we have a scheme that will cost motorists more and not only do we have a scheme that is going to completely distort the normal economic forces; we have a scheme that is going to put extra burden on the small businesses of Australia.
When he came to power the Prime Minister said that he desired frank and fearless advice for his government. But when he gets it he does not want it. He denigrates the very people who give it. Today his claim of being a Prime Minister who will accept frank and fearless advice is in tatters, as is the credibility of this scheme. The Australian public can have no confidence in Fuelwatch and they can have no confidence in this government. The manipulations and games have gone on for too long. It is about time this government came clean with the Australian people. It has to admit that it does not have the answers. It has to admit that it is not able to deliver on the promises it falsely made last year as it tried so desperately to gain government. If the Australian government does not have a plan for Australia and it does not know what it is doing on petrol prices then I think we have much to fear in the years ahead as this government continues to put politics and spin above substance.
Last week, after making my contribution to a debate on an MPI about Fuelwatch, I received a very thoughtful email from a gentleman who lives in Kellyville in Western Sydney. He was very pleased, I have to say, with the idea that politicians should lead the way when it comes to adopting sustainability measures in their personal and professional lives, such as choosing, as I have, a fuel-efficient, non-standard hybrid vehicle in the form of a Toyota Prius. As a resident of Western Sydney he was also acutely aware of the way in which Western Sydneysiders are being used as the notional victims of the opposition’s bogeyman version of the very sensible Fuelwatch initiative. The opposition might like to hear what a person in Western Sydney actually thinks. The email said:
On the subject of Fuelwatch, it has come to my attention that I have been mentioned countless times in the House over the last few days—those who live in Western Sydney. I would like to say that I and many of my friends, associates and colleagues who live in the western suburbs of Sydney—and the majority of us who have to travel the thirty-ish kilometres in two hours each way to and from the city by car each day—would not only welcome the Fuelwatch scheme but are very enthusiastic as to the potential for us to make an informed decision when making our weekly purchase of petrol.
It has been discussed among my circle of friends and colleagues that we would certainly in the short term benefit slightly from the opposition’s promise to cut the excise on petrol by 5c, but we were fully aware that the international price of oil would likely swallow up that saving in a matter of weeks or perhaps days. We are much more interested in having the ability to make informed decisions utilising the proposed Fuelwatch scheme. I wish you all the best in parliament over the coming days on this issue and would be happy to hear from you if you would like to know more about what Western Sydney is really thinking.
In a follow-up email, this gentleman from Western Sydney said that he is happy to be identified. His name is James Fiander and he is part of a community group called the Hills Against Global Warming. He and his fellow community members feel that they have been significantly underrepresented by the Howard government and by their own local member, the member for Mitchell, on such issues as climate change, Indigenous Australians, transport and education policy. (Quorum formed) As is clear from the achievements of the Rudd Labor government in its first six months, there is a stark contrast between the approach of the former Howard government on the issues referred to by Mr Fiander and the approach of the new Labor government. If we think of the apology, the ratification of the Kyoto protocol, the development of a national emissions trading scheme, increasing the renewable energy target, the budget measures that prioritise commitments to education, infrastructure, health and the environment and we compare this to the wholesale inaction and ‘denialism’ of the Howard government on these issues, there is a significant difference.
So too the question of the extension of Fuelwatch in the form of a national program has shown the government and the opposition in stark contrast. During the past week the members of the opposition have painted bizarre scenes of petrol price apocalypse in an attempt to get some bounce in the polls from a simple extension of the WA FuelWatch scheme. As has been the case in many other areas of policy that are of vital interest to the Australian community, the opposition prefers darkness and secrecy to openness and transparency. They do not think voters should know the source of political donations; they did not believe when in government that the Australian people needed to know the truth about weapons of mass destruction, or the countless warnings that the Australian Wheat Board was party to the greatest trading scandal in Australia’s history. The quite hysterical reaction from those opposite to the idea that consumers might get a bit of information to guide them in their choice of petrol stations is a strong indication that this preference for secrecy remains, and that the sympathies of the opposition lie with big petrol retailers rather than with ordinary Australians who are struggling with the rapidly rising cost of living.
I regret to note that in a very short time histrionics and manufactured outrage have become characteristic of the opposition’s approach in this place to any sensible proposal put forward by the government, whether it is the government’s plan to tackle teenage drinking through the excise on alcopops or the government’s plan to increase transparency in fuel pricing. As other members from Western Australia, including Senator Adams, have pointed out, with WA’s FuelWatch we have moved to a situation where consumers are given the necessary information to allow them to make an informed choice about purchasing petrol. Over the weekend I received a message from a Fremantle constituent telling me that he uses FuelWatch regularly and saves between $6 and $10 each time he fills up. I ask a simple question: how can giving consumers more information possibly be a bad thing?
Contrary to the propositions put by the member for Groom earlier today, this government is about responsible policy, market transparency, consumer support and innovation. It is the opposition that is in disarray, that has no plan for the future. The petrol populism from those opposite aims to obscure the lack of long-term constructive policy from their side. The bigger policy picture, the task for which this government was elected, is to implement long-term policy for Australia. Two of the most critical areas are energy policy and climate change. Transport policy of course bridges these two areas to some degree and therefore presents one of the more complicated challenges.
Last year the Senate Standing Committee on Rural and Regional Affairs and Transport issued a report on Australia’s future oil supply and alternative transport fuels. The committee noted that the demand for oil is relatively inelastic because for its major use—transport—there are no easy substitutions. This means that a relatively small shortfall in supply can cause a large increase in price. The committee said in its report that it:
... considers that more needs to be done to reduce Australia’s oil dependency in the long term. This is desirable not only because of peak oil concerns, but also for other reasons—to mitigate greenhouse gas emissions; to mitigate the costs of the expected long term decline in Australia’s net oil self-sufficiency; and to mitigate the risks of supply disruptions as oil production becomes concentrated in a declining number of major oil-producing countries, some of which are politically unstable.
In addition to examining supply-side responses such as oil exploration and development of alternative fuels, the committee looked at demand-side responses such as increasing the fuel efficiency of vehicles, alternative forms of transport and integrating transport planning and land use planning.
I am pleased to say that long-term constructive policy on these issues is part of the Rudd Labor government’s agenda. But the opposition are not interested in such complications as peak oil or climate change or fuel efficiency or alternative transport. They are focused on short-term opinion polling and 5c of uncosted excise irresponsibility without regard to the long-term future of this country. A good example of this is their monomaniacal focus on price alone without ever acknowledging that the cost of fuel to every person and every household in Australia is produced as a combination of petrol price and fuel use efficiency. The truth is that price per litre changes to the cost of fuel affect different road users very differently. If you were comparing two identical journeys, or even two weeks worth of car travel over the same total distance, the comparative cost would have more to do with the comparative fuel efficiency of the vehicles involved than with the price of petrol.
In 2006 the Australian Bureau of Statistics estimated that the average fuel consumption for Australian passenger vehicles was 11.4 litres per 100 kilometres. In 1963 the average fuel efficiency of Australian passenger cars was 11.4 litres per 100 kilometres. That was 45 years ago! Since then, humankind has landed on the moon, created the internet, extended mobile satellite telephone technology across the planet and made thousands of other technological advances in the areas of communications, medicine, astrophysics and so on. But the fuel efficiency of passenger cars has remained unchanged, unimproved. How is that possible? Cars in Australia are still commonly marketed for their speed and power. People are buying cars with big engines and bad fuel efficiency, and they are paying for it at the petrol bowser. As a nation, and as part of the global community, we have to recognise that promoting and choosing vehicles for their fuel efficiency, perhaps at the cost of speed and accelerative power, is the easiest way to reduce the impact of rising petrol prices and the toll that burning petrol has on the environment.
There are, of course, vehicles at the smaller, more fuel efficient end of the scale that easily achieve fuel efficiency of around seven to eight litres per 100 kilometres. The WA Sustainable Energy Association has estimated that driving such vehicles will save people around a third of their fuel costs—the equivalent of something like 45c to 50c a litre. A hybrid fuel vehicle like the Toyota Prius that I have, which runs at about 4.4 litres per 100 kilometres, can reduce your fuel costs by half. In other words, a hybrid fuel vehicle which uses at least half of the unleaded petrol to travel 100 kilometres that the average passenger vehicle uses can effectively halve your fuel bill.
I made the point last week that most people are not in a position to change cars in response to petrol price rises. And of course I acknowledge that purchasing a hybrid fuel vehicle is not an option for many people at this stage. But it does indicate the way forward. Much greater fuel efficiency is possible, and delivering much greater fuel efficiency as an accessible, affordable option is the kind of long-term objective that a responsible government will pursue, rather than pinning its own popularity to an irresponsible excise measure. The opposition, even in this debate, is sacrificing the opportunity to discuss and contest the really difficult policy challenges. It is putting its own short-term political fortunes above the long-term future of this country.
The Rudd Labor government is looking forward. The $500 million Green Car Innovation Fund will seek industry contribution on a $1 to $3 basis with a view to manufacturing fuel-efficient cars in Australia. As I have pointed out, fuel efficiency offers cost savings on a scale that makes a 5c excise cut look exactly like the butchers paper and crayon policy that it is. Fuel efficiency is a win-win objective: good for consumers, good for the environment.
The Rudd government has established a Building Australia Fund that will consider, among other things, the further development of public transport infrastructure in our cities. This has been yet another area of severe neglect under the previous government. I note, on that point, an interesting article from the Centre for Policy Development titled ‘Reinvesting in our suburbs: a role for the Commonwealth government?’ written in September 2006. The article makes the following observation about the Howard government’s transport infrastructure inaction:
The Federal Government’s response is to do nothing but offer token subsidies and motherhood statements ...
To long term observers of the Federal Government’s attitude to urban policy this comes as no surprise. One of its first actions on coming to office was the abolition of Labor’s Better Cities program in 1996. Since then the Howard government has shown very little interest in addressing the urban development, or for that matter transport needs of Australia’s suburbs.
Labor actually has in its platform a clear recognition of the importance of public transport. This is part of our vision for Australia’s transport future. As the platform states, we ‘recognise a role for Commonwealth involvement in delivering urban public transport infrastructure, with particular focus on the needs of poor regions in outer urban and regional areas’.
On this point too I am happy to say that Western Australia is showing the way. The southern rail line, which runs through the Fremantle electorate, is an incredible, state-building achievement. It has connected one of the fastest growing suburban parts of Western Australia and one of the fastest growing local government areas in Australia, to the Perth central business district and other parts of the metropolitan area by a fast rail link.
It should not be sacrilege to observe that using public transport is a legitimate way of reducing the impact that petrol prices have on the household budget. It should not be sacrilege to say that the best long-term approach to high petrol prices is for Australia to move, as a community, towards using less petrol. On that point, I noted in the Australian last week a letters page contribution from one of my constituents, Mark Millard of Coolbellup. Mr Millard wrote:
There’s a simple way to save more than 5c a litre on petrol: take the bus, bike, train, or walk.
You cannot argue with that. Of course not everyone can make that choice, but many can, and we are entering dangerous, politically-correct territory if we get to the point in Australia where policy is premised on the assumption that government must support personal vehicle transport at all costs.
In the meantime, this government, on the basis of the success of FuelWatch in Western Australia, and with the support of the analysis by the ACCC, is seeking to introduce greater transparency into the retail petrol market. Fuelwatch as a national program will make a modest but meaningful difference to consumers in Australia, as it has already done for West Australian motorists. It is an economically responsible measure; it will be implemented in the name of good policy rather than good opinion polls—which is, understandably, the current obsession of those opposite—and it fits with this government’s program of long-term and proactive transport and energy policy.
Whilst the member for Fremantle is still with us, and considering her recent arrival in this place, she might like to wait for a minute to get a little bit of history on some of the things she has just said. She suggested that people should take the bus. The Richard Court government in Western Australia ordered three hydrogen fuel cell buses, and the other day the Carpenter Labor government sent all their working parts back to Germany. Why? They did not like paying the extra cost of running hydrogen fuel cell buses, which are 100 per cent emission free. That is your Labor position on saving the environment in Western Australia. There were three buses in perfectly good condition. I tried to get hold of one of them to at least take it to a practical inventor in my electorate for the purpose of turning these buses they proposed to wreck into a fuel cell tractor. They were 300 kilowatt, 400 horsepower. All the working parts have gone back to Germany from whence the buses came. And there could only be one excuse: the Carpenter government did not like paying the extra for a clean environment.
Then there is a challenge against the Howard government in terms of infrastructure in Western Australia. It was interesting the other day to see some coverage of the Bunbury Freeway, which the minister for transport—
No, I listened to the speech fairly closely and they were not about the issues that you are straying onto. I would like you to come back to the bill before the parliament. I am sure that you have got an entertaining speech for us.
Wait a minute. I am sorry, Madam Deputy Speaker, I could accept that ruling if you had stopped the member for Fremantle attacking the previous government. The whole raison d’etre of this government at the moment is that in some ways two wrongs make a right and that their wrong in this case is correctable. The Minister for Transport in Western Australia refused and resisted an offer of $170 million from the Australian government to build a freeway down to Bunbury. He hates roads.
On a point of order, Madam Deputy Speaker, it is not in the mouth of any member to say that they would accept a ruling on their terms. You made a direction and the member has, in effect, defied you—
It is clear to me that I cannot respond to the words of a previous speaker in this House, and I will leave it at that for the time being. I have got much to say about the inadequacies of the Western Australian FuelWatch system as it applies in my electorate, where it is meaningless. Furthermore, I have a long recollection of the processes by which it was achieved. Now we are going to have this system loaded across Australia—if it is constitutional. I doubt that it is constitutional, because I have not seen yet where an Australian government can impose price fixing. Apparently telling people that they cannot change their prices for 24 hours is not price-fixing. That stretches credibility to some degree and is further evidence of what happens when panicked governments start to come up with legislative solutions which they have not properly researched. So let us get it straight.
In Western Australia in my electorate and in the approaches to my electorate, you can drive away from the city and by the time you have gone 50 kilometres the price of fuel is 10c and 15c over and above the regulated price in the city. Yet on the best of information—and by quotes that I have received—the average road transporter of fuel in Western Australia will shift it for half a cent per 100 kilometres per litre. Tell me how an almost infinitesimal charge can result in 10c a litre change.
That is the first failing of FuelWatch as it exists in Western Australia. Twice a week they publish a terminal gate price, no doubt to assist the consumer on the mark-up that they think some reseller is achieving. But if you are a truly dedicated independent, and you want to sell at a highly competitive price and put it on their register, just you try to get into the Kwinana refinery and buy fuel at the terminal gate price.
That is what this chamber should be talking about; not a shonky scheme that does not work. If anyone takes the total body of opinion of the ACCC, until more recent events they said it would not work—and it does not work. What is it about? It is about giving a warm and fuzzy feeling to motorists that throughout the process of a working day—and I will come back to that—they can be assured that if they buy in the morning the price will be the same in the afternoon. And what was the grizzle that created this scheme? It was that you could take the risk of buying in the morning and the price actually fell in the afternoon. Of course, the person who filled their tank in the morning did not think that anybody else was entitled to a cheaper price than they got that day.
I am old enough to remember petrol rationing and how, years after the Second World War, the bureaucracy a la ACCC had hold of that and hung on to it like grim death, and there were some public servants who were doing financially very well out of it. It was well known how to get extra ration tickets. But what I am saying to you is that anybody who gets a regulatory regime will hang onto it and defend it notwithstanding that it delivers no benefit to the community.
There is only one way that you can deliver benefit to the community with regard to the price of fuel. You can ensure that there is an open marketplace. There were threats made to the Richard Court government by BP, around the era of all these wonderful reforms, that they were going to close the Kwinana refinery. The response was FuelWatch. The response was a readjustment of the fuel standards in Western Australia. I do not think any other state picked up that arrangement. But what did it achieve for BP and for the Kwinana refinery? It virtually banned the import of Singapore refined petrol. Western Australia was unique in that they had an independent—it is still active; someone told me the other day there were 25 outlets—called Gull. I do not know if it still survives here in Canberra but one was erected here. The reality was that Gull had managed to purchase a little tank farm connected to the port of Fremantle or Kwinana somewhere. And because the Singaporeans have very large refineries with the intention of producing jet fuel they frequently have surpluses—maybe not so much today, but they certainly did in that period—of petrol. And Gull was bringing it down as a direct import and, of course, knocking the spots off the heavies.
So the parliament of Western Australia, supported in more recent times by Jim McGinty, changed the fuel standard. McGinty’s words were, ‘I do not think the Western Australian public minds paying an extra couple of cents for fuel, because it is of a better environmental standard.’ I think he should have seen last night’s Newspoll on what people thought about having to pay extra for petrol to save the environment—63 per cent said no.
But the whole situation is this: in Western Australia a company that was truly independent and was delivering fuel was cut off with not a squeak—in fact, with the total support of the present state Labor government over there. What is more, when they came to Canberra, as some of those who have been around a while will remember—Parliamentary Secretary Kerr at the table would remember—there were traffic jams because they were able to sell petrol so much more cheaply than was charged in Canberra, a big city. The rates that are generally charged in Canberra have nothing whatsoever to do with the freight cost out of, say, Sydney or Botany Bay or somewhere. The reality is that Gull was swapping its cheap petrol delivered to Perth with a major supplier who was fuelling them here, and they were cutting the price.
They are the issues that we should be debating in this place today. What happened? The only way you can reduce the price of fuel as a parliament is to reduce the taxes that you levy upon it. There is no other way. Do not think price fixing will work. The history of price fixing is that it is the highest common denominator. I can still remember being in a grocer’s shop where, if you queried the price, they opened a book and said, ‘It’s got to be right; the government’s put it in the book.’ It had to be right! It was the government price! You are telling this parliament that, after all the historical evidence that it does not work, this is the way to protect people from the escalation in fuel prices. You can tell us the story that it is all about international price movements but throughout the world the pressure is the government rip-off.
How did fuel taxes start? I think it was Bob Menzies who said, ‘We need some money to fix your roads; we will put a small tax on petrol and use it for that purpose.’ That is hypothecation. What happened over time? It just became a very soft and easy method of raising revenue, and the Hawke government—I think it was John Dawkins—introduced indexation. Up until then, in my experience in this place, if the government wanted to increase consumer taxes—be it on alcohol, be it on petrol—they had to confront the electorate. It was not a bad idea if you told them before the election what you were going do. That did not happen with petrol on this occasion. The reality was that they moved from a situation of a legislative, fixed rate of excise to one of indexing it for the purpose of building it up by inflation. And what a clever trick that was—invented by a Labor government. Petrol is obviously a major component of the CPI. So it was self-generating. Every time you increased the excise, you increased the inflation rate so that you could increase the excise again.
In the Howard government we recognised the inequity of that and we froze it. And what is more, we adjusted it in the process of bringing in tax reform and the GST. By that time, of course, the High Court had made a determination on the state governments’ so-called licence fees, averaging at about 8c a litre. We can read more information about that with respect to Queensland, which never had one, and how we insisted that they did not get a windfall out of the arrangements. We had to add, under Peter Costello as Treasurer, an excise increase for that purpose. But we then dropped it anyway. And we got it down to the present figure and we froze it.
We have stood up in this parliament and said that, when we are re-elected, we will reduce it. And we will not be the first in the world. I am just waiting for Gordon Brown in England to realise that the 60 per cent, or whatever they take, is going to have to change because he has riots on his doorstep. I think it is a rather good idea, actually, that the fishing industry of Europe have decided that for a few weeks they are not going to continue to rape the North Sea because they cannot afford the fuel. But do you know what will happen there in the end? I think I read that the EU is going to give them $100 million. In other words, they are saying, ‘We will take it with this hand but do not tell anyone and we will give it back with the other.’ I reckon that giving the fishing areas of the Northern Hemisphere a bit of a rest might not be a bad idea, but that is beside the point.
The time is approaching when governments will not be able to see petrol as a form of revenue. There was a time when customs duties were a major contributor to this parliament’s revenue. Then we discovered that customs duties were not good for consumers, were not good for people and did not make industry efficient. And, funnily enough, with their incapacity to deal legislatively with union problems, both Whitlam and Hawke dramatically reduced import duties for the purpose of bludgeoning the workforce into common sense. I think that was a blunt instrument and not a very smart way to do it, but do not tell me it did not happen; it is a matter of history.
What I am saying is that this system will not work. It was established in Western Australia on a false premise. Its only achievement is to give a warm and fuzzy feeling to people in that they can buy petrol in the morning and know it is the same price. We are told how transparent it is. If you are computer literate, you can go to the website. How many pensioners have got the capacity to do that? Of course, working families might be better off. Otherwise, they can get their kids to use the free computers they have at school which nobody can plug in at this stage of the game. So that is not very helpful.
If you come to my state and watch the fuel price on television, you have to read the best price in a blink. It does not all go through; it is selected by the television company, and it goes bing, bing, bing, bing. Too bad if you see 5c a litre at Whoop Whoop service station and then you realise that it is on the other side of town and you are going to use more fuel to get there than you are going to save. Do not tell me about people having choice. If they just happen to live in the wrong district they have no choice. And, if they live in the bush, they have no help whatsoever. Geraldton, in my electorate, has its fuel delivered by sea. It probably nets into their tankerage for less than it would for some of the non-refining big people in Fremantle. Yet, any day that you go there, the resale price is 10c or 15c above the equivalent in Perth. If you tell me that that is Fuelwatch and that it is working, I want to know about it.
You will never influence the marketplace to the extent that you wish to. You are not entitled in this parliament to apply price fixing. And, if you want the states to refer their powers, why not let them do it on their own? Ring up Iemma and say: ‘You are approaching an election. Put this in place. Everyone will love you,’—and wait and see what his answer would be. He would not want to do it, and this parliament has no constitutional right to do it. But that is only evidence of a government that does not know what it is doing. As I said in a doorstop interview this morning in regard to this government, when you prick a balloon you only get gas. And that is about all we have got on this issue.
But on this side of the House there is a positive, honest commitment, backed up by our past performance in which we froze the excise. We say that we will cut that excise, and that will deliver a real saving to the people of Australia—not funny business and not something that cannot be tested even in operation. Once you get it you do not know what will happen, and there is no way to test its operation.
Government members interjecting—
Anyone who wants to be cheeky can come and see me after, if they like. I will not tolerate this. It is a serious issue, and the evidence is that it is typical that this Barnum and Bailey government thinks that as long as it has a stunt for the day, it can protect itself.