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Tuesday, 20 June 2000
Page: 17693

Mr SOMLYAY (4:54 PM) —My question is addressed to the Treasurer. Treasurer, have you seen recent media reports regarding fuel subsidies and fuel taxes in Queensland? What is the basis of the current fuel subsidy arrangement? What changes are being proposed to this arrangement and other subsidy schemes that benefit consumers?

Mr COSTELLO (Treasurer) —I thank the honourable member for Fairfax for his question and for his interest in fuel arrangements in the state of Queensland. If I could go back a step, in 1997 the High Court invalidated business franchise fees that had been imposed by states. The states unanimously asked the Commonwealth to step in and, with uniform excise and wholesale sales tax, raise the money which the court had said the state could not raise for itself. The Commonwealth could impose those wholesale sales taxes and excises only at uniform rates. So it imposed them at the highest rate of any of the states, passed the money across to the states and said to those states that had lower rates, `You must use this money to resubsidise your product so that its price does not move.' In Queensland there was no business franchise fee on petrol, so that, when the Commonwealth stepped in and raised the same amount per state and paid the money to Queensland, it was on the condition that the Queensland government subsidise its petrol 8c a litre so that the price did not rise. That arrangement has been put in place, through correspondence and agreement, since 1997.

Mr Speaker, you can imagine our surprise at the announcement by the Beattie Labor government in Queensland that it would be abolishing that subsidy arrangement, that it would be taking the money from the Commonwealth and, rather than passing it on to consumers, pocketing the money or otherwise applying it to a state tax under cover of the taxation changes of the Commonwealth, trying to shift the benefit and to blame the Commonwealth. I ask you this question: if Mr Beattie was genuinely concerned about that subsidy arrangement, why did he not cease it when he was first elected? Why did he not threaten to cease it at the end of last year? Why would he not threaten to cease it at the end of next year? Why was it that he chose the magical date of 1 July 2000 to try to abolish his subsidy? Because he was deviously trying to blame the Commonwealth when prices went up in Queensland. As a result of a lot of good work by a lot of people on this side of the parliament, he has been forced to back off that scheme—a thoroughly devious scheme.

I would have welcomed one ALP voice criticising the Beattie plan. The ALP will tell you that they are worried about the price of petrol, but when an 8c a litre straight out price impact was being threatened by the Beattie Labor government, the silence was absolutely deafening. I pay tribute to those members of the Liberal and National parties that stood up for Queenslanders and have ensured that Queenslanders were not being disadvantaged.

We are seeing an attempt to do the same thing in relation to alcohol. Again, when the Commonwealth had a uniform rate and paid the money to the states, those states which had previously not taxed light alcohol beer agreed to use the money to subsidise light alcohol beer for public health reasons. On 1 July, when taxes change in this country, Western Australia is going to keep its subsidy and South Australia is going to keep its subsidy on light alcohol beer. Even the Premier of Victoria, Mr Bracks, has now agreed to keep it. On 2 June 2000 on the Ross Warneke program, Mr Bracks said:

We've already made a decision on low alcohol beer, which had an $18 million subsidy to keep a differential price, and on good public policy grounds, that is, to ensure that we reduced the road toll.

So he is keeping his subsidy on light alcohol.

Mr Crean —Mr Speaker, I raise a point of order that goes to relevance and, given the shortness of question time today, this is important. The question was about petrol. What has that got to do with low alcohol beer? I would ask you to draw the minister's answer to a conclusion because he has already answered on petrol.

Mr SPEAKER —In ruling on the point of order I point out that the question was about the way in which subsidies to state governments were being dealt with by the federal parliament. For that reason, I will allow the answer to continue.

Mr COSTELLO —Western Australia is not trying to cheat on that subsidy. South Australia is not trying to cheat on that subsidy. The Premier of Victoria has now come to the conclusion that he should not do that.

Mr SPEAKER —The member for the Northern Territory, for the last time!

Mr COSTELLO —I raised this issue in the parliament some weeks ago in relation to Tasmania. I can inform the House that the Tasmanian government has reversed its position and has done the right thing. I pay tribute to the Treasurer of Tasmania, Dr David Crean, who, I think on the afternoon that I raised this in the parliament, put out a statement—and I will table it—dated 7 June saying, `Subsidies for cider and beer to stay'. I commend the Tasmanian government for its stand. But there is one state government in this country which is trying to deviously use the tax changes of 1 July 2000 to wipe out a subsidy on low alcohol: it is the Labor government of New South Wales. The Labor government of New South Wales expects to be paid the money for a subsidy which it intends not to pass on to consumers.

Mrs Crosio —Tell the truth.

Mr COSTELLO —Labor members from New South Wales interject in defence of the Carr government taking away a subsidy on low alcohol. There is only one state. Why would it be that Western Australia, South Australia, Victoria and Tasmania have all adopted that position and New South Wales stands alone? It is because New South Wales thinks it can get away with this, that it can use the cover of 1 July 2000 to take out a subsidy and to try to put up the price of low alcohol beer. I call on the Labor Party to criticise the New South Wales Labor government and to demand that that subsidy be passed on. I say that, on this side of the parliament, we will be sticking up for the consumers of New South Wales. We will not see them cheated by the Labor government of New South Wales.