Senate debates

Wednesday, 13 September 2006

Petroleum Retail Legislation Repeal Bill 2006

In Committee

9:56 am

Photo of Nick MinchinNick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Hansard source

With great respect to Senator Fielding and the bona fides of his motives, the government do not support this amendment. We think that this is an extraordinarily heavy-handed approach to this issue, but it is an opportunity to remind the Senate that one of the great virtues of this package of legislation is what it does to improve the arrangements with regard to terminal gate prices from what has prevailed for virtually the whole time the old-fashioned and out-of-date sites act and franchise act have operated. We accepted that in the second reading speech, and the explanatory memorandum made it clear that one of the motivations and great virtues of the legislation is to vastly improve arrangements for independents and others with respect to terminal gate pricing. As the second reading speech notes:

The oilcode will also introduce a nationally consistent approach to terminal gate pricing arrangements to improve transparency in wholesale pricing and allow access for all customers, including small businesses, to petroleum products at a published terminal gate price.

It will overcome this problem we currently have of people in Western Australia and Victoria having an advantage over other states with respect to the arrangements that apply to terminal gate pricing.

Let us not forget that what we are doing with this legislation is a vast improvement on the current arrangements. We think we have the balance right. You must pay respect to the proper commercial arrangements that apply in all industries with respect to discounting. I am quite convinced that the very unfortunate and perhaps unintended consequence of this amendment would probably be to, in effect, end discounting at the great expense of consumers. Let us not forget that it is all very well to have a proper and well-placed concern for independents and small retailers, but all trade practices arrangements in any nation like ours must have equal regard for the interests of consumers, and consumers are the beneficiaries of discounting to the extent that it occurs. We are not prepared to embrace heavy-handed red tape amendments which could possibly, and we think probably, result in higher petrol prices than might otherwise apply. This amendment would be, in our view, an undue infringement on proper commercial arrangements. It is one thing for this Oilcode to set out nationally transparent arrangements in relation to terminal gate pricing, but every day in the commercial world private parties come to arrangements on discounting; it is a common practice in lots of industries. Who are the beneficiaries of that? Consumers. We pay less for the product than we otherwise would.

The amendment would bring about extraordinarily heavy-handed arrangements—and I think Senator Joyce was trying to make this point—where the wholesale supplier would make available to the public each day on an internet website maintained by the wholesale supplier the price or prices, including the amount of any discount; other individual components in relation to each particular price; and the criteria to qualify for the price or prices. This is, quite frankly, extraordinary stuff. It is unduly heavy-handed. While we respect the motives, the government’s point of view is that it is unacceptable and blinds the Senate to the point that this Oilcode goes an enormous way to overcoming the current inadequacies with regard to terminal gate pricing. So the government are opposed to this amendment.

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