Ruth Webber (WA, Australian Labor Party) Share this | Hansard source

The Petroleum Retail Legislation Repeal Bill 2006 is yet another piece of economic legislation that has been some time in coming. The bill was first referred to the Senate Economics Legislation Committee on 30 March this year, and a message was conveyed to the committee, of which I am a member, that there was to be a sense of urgency in our inquiry into the bill because the government attached a degree of urgency to the legislation. So it is passing strange, to say the least, that it has taken until now to debate the legislation. The committee had two public hearings, a hearing held in Sydney in early May and a hearing held here in Canberra on 8 May, and the committee reported not long after the second hearing. As far as those of us on the economics committee are concerned, we have been ready to deal with and have had a view on this legislation since May, and we are now in September.

At the committee’s hearing in Sydney we heard from a lot of the players in the petroleum retail industry, which is hardly surprising. In discussing their views on this proposed legislation, a lot of the players referred to the Oilcode, a code that has been referred to by Senator Chapman and others who have contributed earlier to this debate. I mention this because, at the time, those of us on the committee were unaware of the totality of the package. We were unaware that this piece of legislation was to go hand in hand with an oil code and, in fact, had not been provided with a copy of that code. So the hearing where we heard from industry was a little disjointed. We probably did not give them a true sense of where we were at and we did not have the opportunity to pursue the issues with them the way we would have if we had had all the information before us.

In discussing the issue with industry representatives in Sydney, it came out that they were of the view that the Oilcode, as they were discussing it, was available on the department’s website in draft form. It was not until the committee got to have its hearings in Canberra that we were able to have a discussion about what was in the code and to have it before us and get a true understanding of the status of the code and how that was to correlate with the legislation. In fact, when we were talking to departmental people they were able to tell us that as far as they were concerned the code, as it stood on the website, was the final document and not a draft, as some in the industry still seemed to consider it to be. As has been mentioned by others, when the economics committee reported in May, although we agreed to the passage of the legislation, a number of us put in some additional comments on other measures that we thought needed to be taken to insure the petroleum retail industry.

As part of the assistance to committee members in the lead-up to our hearing in Canberra, we were provided with some briefing notes from the Minister for Industry, Tourism and Resources, the Hon. Ian Macfarlane, which I must say—and I remarked about this at the time—were most useful. Perhaps if we had had them a bit earlier it would have stopped some of the pain at the Sydney hearings. One of the things mentioned in that briefing was a discussion about the change in the environment regulating the retail petroleum industry. It said that the proposed legislation would not eliminate the rationalisation of retail sites that had been experienced by the industry over the past two decades. We were provided with the useful information that in 1970 there were over 20,000 retail petroleum sites around Australia but that, following the oil shocks of the 1970s and 1980s, the number had reduced to approximately 12,500 sites and has continued to decline to the current level of 6,500.

The briefing note went on to say—and this is one of the things that causes some concern for those who are worried about the operation of independent retailers and smaller players within the sector:

However, ... rationalisation will eventually plateau as retailers compete on the even playing field facilitated by the Oilcode and the number of retail sites reaches an optimal level in response to the demands of the domestic market.

I presume that, by the note saying it will eventually plateau, we can still expect to see some decline in the number of sites. In a state that is as geographically large as Western Australia, and which has an industry as significant as Western Australia’s but still with a fairly centralised population, the thought of any further decline in the number of retail outlets will be of real concern to the people of that state—the people of my home state. If you are from outside Perth, there are no options of public transport or other methods of getting around, so easy access to petroleum at a reasonable price is a very important part of keeping my state going.

Hand in glove with this piece of legislation, as has been highlighted by Labor members of the economics committee and by Labor in its proposed amendments, is the need to reform the Trade Practices Act. Trade Practices Act reform is something that has been discussed in this chamber. It has been highlighted in this chamber for almost as long as I have been a member; indeed, it has had a quite high profile in that time. It was only last week in question time, in response, I think, to a question from Senator Fielding—even though it is only a week old it is testing my memory—that Senator Minchin said that the government accepted the need to reform the Trade Practices Act but would do it when it had the numbers to secure it. We all know that the government has the numbers in this place, so I can only assume that any government reluctance to reform the Trade Practices Act is due to a level of disharmony or disagreement within its own forces; that should be the only reluctance. As I say, this is an issue that has been highlighted for quite some time.

The need to reform the Trade Practices Act was highlighted quite significantly by a now extinct body, the Senate Economic References Committee, when it reported, back in 2004, on the need to make the act more robust in protecting the rights of small business. Whilst Labor supports the legislation, we feel that hand in glove with that needs to go some further reform to the Trade Practices Act. As those of us from Labor commented in our additional remarks in the economics committee inquiry, it is well known that section 46 of the Trade Practices Act has been rendered inefficient and ineffective because of a number of Federal Court and High Court cases. For example, in the Safeway case the concept of taking fair advantage was brought into question. In the Rural Press case, the concept of abusing market power in another market was brought into question. Then, of course, there is the infamous Boral case, where the very concept of market power was also brought into question. The ACCC has effectively given up pursuing cases under section 46 of the Trade Practices Act because it now knows, in our view anyway, that it has been rendered ineffective.

At the time the Senate Economic References Committee brought down its report, there was unanimous agreement that some sort of reform of the Trade Practices Act needed to take place. The only disagreement within the committee was the full extent of that reform. Some two years later we are still waiting to see some government legislation and government response to that inquiry. It is very difficult to continually come in here to raise real questions about individual pieces of legislation and the effect they will have on small, independent operators in collaboration with a less than effective Trade Practices Act in this day and age when we are yet to see the colour of the government’s proposed reforms. Every time Labor raises these issues, we are told that there is a package coming and that the government fully intends to reform the Trade Practices Act. Some two years on, considering it will be a significant package that will affect those in small and intermediate businesses, I am surprised that a government that claims to be the champion of the small business sector is yet to come forward with a package of reforms to protect the sector in an increasingly combative and robust market.

The report of the Senate inquiry into the effectiveness of the Trade Practices Act on small business was brought down in 2004. It made a number of recommendations to strengthen the Trade Practices Act, some of which the government at the time committed to, yet we are still to see any legislation resulting from that. Particularly as the government, we all know, have the numbers in this place, it is completely unacceptable for them to say, ‘We’ll wait and see when we can get the package through.’ They have the numbers; they need to use the numbers. This is something that those of us on this side of the chamber have been told they have been working on for some two years. Surely, therefore, this is a package that should be ready to go. Labor senators at the economics committee hearing particularly noted the comments of Mr Cassidy from the ACCC when he said:

I would say that, to the extent that there are shortcomings in the current section 46—and that is obviously well-travelled ground—we think the answer to that is to amend the section.

So the ACCC wants the section amended. The Senate economics committee unanimously wanted the section amended. Those from almost every peak small business forum or locally organised forum of small business also want the section amended, yet we are still to see any form of activity from the government.

The reforms are long overdue. For those of us that are very aware of and have a lot of sympathy for the claims that were made by the independents in the petroleum retail sector, it is very difficult to continually take the government’s point of view that this piece of legislation is essential and that the Oilcode will go hand in hand. In a way the government forced our hand by removing all regulation and then said, ‘We have to pass the legislation or the entire industry will be left unregulated.’ It is very difficult for us to continue to deal with these issues industry by industry, sector by sector without having any undertaking or any indication from the government on when we can expect any reform to the Trade Practices Act and what that reform will look like. This is reform that we have been waiting some two years for. Every time the government bring in a piece of legislation like this that seeks to govern the commercial activities of one particular sector of our economy, those of us on this side of the chamber will go out of our way to remind them that they cannot adopt this piecemeal approach. In order for the small business sector of our economy to prosper in the way that it should, they must give us the legislative framework or at least the undertaking of what that legislative framework will look like so that we can see the true operation of a decent trade practices regime in our economy.

Debate interrupted.