Mr ADAMS(4.24 p.m.) —Mr Deputy Speaker, I will endeavour to take your words on board. It was very interesting to hear the Minister for Science and Technology (Mr McGauran) slipping and sliding away from the commitments in his language prior to the last election as he travelled around Australia, he and his colleagues thumping their chests as to what they were going to do to petrol prices, especially in regional Australia, where they have failed. We have heard here today the way he has sold out. There was no commitment in what he said to this House today to bring down prices, especially to regional Australia and to my state of Tasmania.

The contradictory comments that he did make were very interesting because that press release of 7 January of this year said that the federal Minister for Science and Technology, Peter McGauran, also criticised petrol price rises during the holiday break, saying that, in some cases, it was blatant exploitation. So on 7 January he says that it is exploitation; he now comes into the House to defend the government's position, and he does not really have a defence. He is really slipping and sliding away from the commitment that they had actually made prior to the election.

Prior to the election they were running around the country. You were running around every regional centre in this country saying, `We are going to bring down petrol prices.' I bet you that he was in the Deputy Speaker's seat of Cowper saying, `We will bring down the prices.' Well, you are not going to bring down prices and what you have said today just typifies your approach. You are running away; you are saying that nothing can be done; you are using constitutional arguments and everything else. Well, the people out in regional Australia will hear and know that you are slipping and sliding away from them. Your promise before the election is absolute rubbish and is fast becoming a joke around Australia.

Tasmania has long suffered a disadvantage compared to mainland Australia in relation to the inability of its petrol stations to compete for lower prices. This Howard government keeps preaching that competition should be a natural occurrence in a healthy enterprise system. Competition should generate where profit is taken and, in the petrol industry, it is at the wholesale level, the distributor level and the retail level.

The extent of competition is dependent on the financial capacity of operators to compete at each level and on their desire or need to compete. But that does not happen in Tasmania, especially in regard to their desire to compete. There is no ability to compete because the wholesalers are not interested in competition. They are quite happy with their market share in our small market.

So how can this government say that they are going to bring down petrol prices unless they put in place some sort of regulations to allow the retail level to pick and choose their wholesaler—the big oil companies: Shell, BP, Ampol, Caltex and Mobil? Unless they do that, unless they allow retailers and distributors, in Tasmania's case, to actually choose from which terminal they buy, you will not get competition into the system.

A recent report by the Tasmanian Legislative Council—on which a member, David Crean MLC, put in a lot of work—highlighted many problems facing petrol retailers in the state. The report says:

When comparing capital cities on the mainland with Hobart, based on the import parity formula, supplying fuel to Hobart should cost the oil companies roughly the same as any other capital city.

Furthermore, based on the Industry Commission's calculations, the cost of that should be about 3.2 cents per litre to the oil companies. (This included administration, marketing, transport, storage.)

Yet under the PSA, 7.4 cents per litre (this was changed in 1994 to 7.1 cents per litre) is allowed which includes 0.5 cents per litre profit. According to the Industry Commission this leaves the oil companies a 3.7 cents per litre margin. Three cents per litre of this was used in Melbourne in 1993 and 1994 to discount to other wholesalers or rebate to retailers to support retail price discounting.

Over the same period in Hobart, the 3.7 cents per litre was taken as profit in addition to the 0.5 cents per litre.

This amounted to oil companies taking three to four times the wholesale profit per volume of petrol sold in Hobart compared to Melbourne on average during 1993 and 1994.

The financial capacity of oil companies to compete in Hobart is not in question. The fact is they have no desire to compete—being content with existing market share, . . . AND there is largely no need to compete because competition is not forthcoming to any great extent from distributors or most retailers.

The member for Werriwa (Mr Latham) recently helped me launch `Petrol price watch' in Tasmania to point out how difficult it is for petrol retailers to provide better prices for their customers. I totally support his suggested private member's bill that will give all service operators the legal right to shop around for the cheapest wholesale petrol. All in this House should support his bill, especially members from regional and country areas of Australia. I would have thought that there are a few people down in the member for Gippsland's electorate now starting to say—

Mr McGauran —Gippsland West.

Mr ADAMS —Especially those from Gippsland West—saying, `We have been taken for granted by these Nats for too long. The McGaurans have taken us for granted down here. It is about time we had a look at what sort of service we are getting and at whether we are going to get lower petrol prices.'

If the government were serious about bringing the price of petrol down across Australia, then the only real answer is to give Australia's service station operators the legal right to shop around for the best wholesale price and pass those benefits onto consumers. When the Treasurer, Mr Costello, announced his deregulation plan, he talked of unleashing new competitive forces. From my earlier points, you will see that this will not work in Tasmania or in regional areas of Australia.

Deregulation does nothing to help competition, particularly in Tasmania where the oil companies could not care less about competition. If anything, deregulation will allow the petrol companies to put prices up rather than down as there is nothing to stop them now—and you should know that.

The Treasurer did not attack the central issue—that is, legally force the big petrol companies to open their terminals to price competition. He could do this through federal legislation and by encouraging the states to bring in their own legislation. We have to ensure that there is an incentive for competition to exist among the big players. If retailers and distributors could shop around, there would be more reason for them to do something. Retailers are saying, `If we cannot shop around, we cannot compete.'

The few price watches that have come in show that the only competition able to be pursued at the moment is where those retailers sell a high enough volume to be able to discount. Those stations are on the major routes, such as the Midlands Highway in Tasmania. Other stations on minor roads around the state can be some 6c higher.

So country people are always going to have to pay higher prices. So much for the big hullabaloo of this government prior to the last election where it was saying it was going to do this and that for regional Australia. Here is another example of where it completely bypassed the needs of regional Australia and country people. The government just walked away from them. Petrol pricing is one example.

Petrol pricing will come back and haunt the government because people out there had some faith when it said it was going to something about it. Of course today we heard the minister slipping and sliding, ringing up the excuses and making the arguments ready to abandon that policy to bring down the price of petrol for regional Australia. He has failed and I am sure he will continually fail to give regional Australia what he promised prior to the last election.

Let me remind the minister of what he said on 7 January. He criticised the petrol price rises during the holiday by saying that in some cases it was `blatant exploitation'. It is blatant exploitation not to open up those terminals to competition. The oil companies can swap their petrol from one terminal to another; therefore, it does not make any difference not to allow competition at the distribution level. Unless you can do that, you will not be doing anything about the price of petrol in Australia.