Mr FITZGIBBON (10:24 AM) —I might just pick up from where the member for Dawson left off because I give her great credit for acknowledging the fact that the city-country price differential on fuel remains totally unacceptable and has of course been compounded by the GST. It is an incontestable fact that, for the first time in the history of the Federation, country motorists are paying more tax on their fuel than their city counterparts. In addition, the member for Dawson has identified a number of market issues as they relate to that city-country price differential. I have to disagree with her on a couple of points, though. I am disappointed she has left the chamber. Competition is the answer and another inquiry into the industry is what we do not need. We do of course need to come to a conclusion in the inquiry by the ACCC into the government's fuel grants scheme—that is, the rebate of 1c or 2c to country motorists, for which there is plenty of anecdotal evidence that it is not being passed on to motorists. I very anxiously await the results of that inquiry.

But we do not need a general inquiry into the industry—the answers are there before us. The member for Dawson is correct: you cannot put the very large city-country price differential down to transport costs alone. Quite clearly, there are greater things at play than transport costs. Of course, what is at play is the share power of the major oil companies and the way they are able to manipulate prices and take excessive profits wherever and whenever they can get away with it. There are other issues such as volume throughputs; that is, city service stations sell much more fuel and need only make a very small margin on each litre of fuel as compared to country outlets which have much smaller volumes. Then there are what we call non-forecourt sales; that is, sales other than sales of petrol—things like hamburgers, chips and a range of other grocery items. These are sales which allow the non-forecourt areas of city service stations to be profitable and, in doing so, allow them to subsidise their fuel prices—in other words, make less on the money they charge for their fuel than is necessary in the country. But at the end of the day a large city-country price differential will be maintained while ever the major oil companies are allowed to control the price of fuel all the way from the refinery to the bowser.

In 1980, then Prime Minister Malcolm Fraser tried to do something about this problem by divorcing the major oil companies from the practice of petrol retailing. He introduced the Petroleum Retail Marketing Sites Act 1980 which effectively divorced them from that area of petrol operation. That was a good move. In those days we had nine major oil companies and his move was out of concern about concentration in the market. Today we have four oil companies and we have a very effective oligopoly in operation which allows them to control the price of that fuel all the way from the refinery to the bowser.

Over the course of those 20 years, since that legislation was introduced, the major oil companies have been very effective in circumventing that act, largely through the system of fuel discounting. In other words, they sell the fuel to the service station retailer at a price they know he cannot sell it at and be profitable and then they offer him a discount to make him profitable which gives them total control over the retailer; notwithstanding the fact that they are not the retailer themselves.

The other method has been the introduction of multisite franchising, a practice whereby the major oil companies, in controlling one franchisee—quite often a former employee of a major oil company—who has 19 or 20 subfranchise agreements, effectively control up to 20 additional service stations. So it is an act that has been circumvented by the major oil companies. This is an issue, but it is no excuse for repealing that act, which is what the government has been attempting to do. The government, rather than curtail the power of the major oil companies, wants to deliver to them more power to control prices. What the government must do is more strongly enforce the sites act and leave it in place in order to keep the major oil companies out of retailing.

The member for Dawson will have an opportunity to do something about the city-country price gap when my private member's bill on this issue comes back to the parliament. The bill will for the first time give service station operators in this country the right to shop around for their fuel rather than be tied to one exclusive agreement with one particular major oil company. That will introduce competition at the wholesale level in the market for the first time. We have seen the impacts that further competition can have at the retail level with the arrival of Woolworths and the other independents into the market. The member for Dawson will have the opportunity to support my bill so that we can demonstrate what effect the arrival of competition can have at the wholesale level of the market.

For some months my bill has been under consideration by the Senate Economics References Committee. That committee has now reported to the Senate. That committee has recommended to the Senate that my bill be supported in that chamber, so it is my intention to have that bill introduced into the Senate where I expect to secure the support of the Democrats. Therefore, I expect that bill to secure passage through that house. When that occurs I will then introduce that bill into the House of Representatives once again. It did not get too far last time because the government controls the numbers here and it did not get past the first reading. I will not need to introduce it here again. It will come back here as a message from the Senate and the member for Dawson and others will have an opportunity to really do something serious about addressing that unacceptable city-country price gap.

It is not surprising that the speakers list for the bills before the House is a fairly long one, because the price of both fuel and beer is a huge issue in every electorate in this country. A huge number of government members, particularly those in marginal seats, are very concerned about the likely response of their constituents to the government's broken promises over the way in which the GST has affected the prices of both of those products. I might just remind the House of what those promises were. The first was that the GST will not cause the price of petrol to rise. The second was that the GST will not cause the cost of beer to rise by more than 1.9 per cent.

I note that, while the list is fairly long, a lot of government members were talking a lot about petrol but not too many of them were talking about beer, and I want to go into detail on both of those issues. Before I do so, I want to say something about the way in which the government has introduced these bills for debate today. The Excise Tariff Amendment Bill (No. 1) 2001 deals with alcohol excise. The Customs Tariff Amendment Bill (No. 2) 2001 deals with petrol excise. The government has decided to link the two bills in a cognate debate in an attempt to hold the Australian parliament and the Australian consumer to ransom. The government has made the passage of the legislative underpinning of its petrol backflip conditional upon the parliament's support for the legislative underpinning of its broken promise on the impact of the GST on beer prices, which have risen up to 10 per cent as a result of the GST.

The opposition will not allow the parliament or the Australian consumer to be held to ransom. These are not ransom notes; these are ransom bills. We will hold our ground and force the government to make good on its election promises. The PM again said last night, speaking at COSBOA's small business summit—and I want to congratulate COSBOA on the organisation of that summit and I acknowledge the Minister for Small Business, who is at the table and who also attended the dinner last night and indeed the breakfast this morning—said again that he stood by his GST package. He said that he went to the last election seeking the imprimatur of the electorate, seeking a mandate. He said he secured that mandate and, having secured that mandate, he was determined to drive through his program of what he calls `tax reform'. Let us revisit what he went to the last election with. He went to the electorate promising a new tax which would be good for the economy. We now know the result. Six months into the tax, after 9½ years of solid economic growth, for the first time the economy has gone into negative growth. He said it would be good for employment and, of course, we now know that, as a result of the first six months of the operation of the GST, unemployment is on the rise.

He said it would be good for business confidence, and there are a whole raft of surveys now available that indicate that business confidence is sinking to all-time lows. He said that the GST was going to be good for small business. There is no shortage of surveys which would indicate something very different. He said it would be good for their profitability. Wrong. He said it would be good for their cash flow. Wrong. We saw another survey very recently, in the last few days, from Australian Business Ltd which indicates that something like 66 per cent of small firms, firms with 25 employees or fewer, now say that the GST has had a negative impact on their cash flow. The majority of those identified slow payments from their larger business customers as one of the key reasons for that. I say that that is something the government could do something about today. The government also went to the Australian people saying that the price of petrol would not rise and that the price of beer would not rise. We know now without any doubt that those two specific promises have been well and truly broken.

To what extent can the Prime Minister claim a mandate? He had no mandate to do this to the Australian people—no mandate to sell pensioners short, no mandate to drive the economy into reverse, no mandate to drive unemployment up and no mandate to put in place a tax system which is crucifying the small business community. Today he has shown he has learned nothing from the first six months of the operation of the GST and the impact on all those people. He has shown that he has learned nothing from the Western Australian election result, he has learned nothing from the Queensland election result and he has learned nothing from the Ryan by-election result. He has demonstrated that today by making this a cognate bill and trying to link together one bill which is an attempt to make good his promise on petrol—I emphasise `attempt' because the 1.5c decrease will go nowhere near making good on that commitment—with another bill which entrenches that failed election promise on petrol.

Notwithstanding the fact that government members refuse to do so, let me say something about beer. This is not just a consumer issue. It is true to say that the 10 per cent slug on consumers is an absolute disgrace, but so is the impact on small business pubs, now less competitive against the bottle shops run by large organisations such as Coles Myer, and less competitive against their bigger competitors. And, of course, there has been an enormous impact on demand for their product. If you are a bit tight on money, as so many are in the new economic environment, and packaged beer in your large bottle shop is now relatively cheaper than a middy or schooner of beer at your local pub, what do you do? You go for the packaged beer, which is now relatively less expensive. So it has had an impact on consumer demand within those small-business pubs. It has also had an impact on microbreweries, an emerging industry in the Australian economy which we should be supporting, particularly as they form part of our tourism sector. It is an industry which has been adversely affected by the impact of this broken election promise on the price of beer.

On petrol, the member for Page began his speech by saying that this is something that Labor has forced the government to do and we should be held to account for the impact on the budget bottom line. I thank the member for Page for acknowledging that point. He is, of course, vulnerable in his own electorate. He knows that the people in Page are very angry about the government's broken election promises on both beer and petrol. We are very proud of the fact that we have held the government to account and we have as a result forced them some way towards honouring their promise on petrol. We will continue to do the same on beer. We will continue to hold them to account on their broken promise that the price of beer will not rise as a result of the GST.

Let me revisit the issue of petrol just for a moment. The government originally said it would reduce the excise on petrol by 7c a litre and in doing so assured us that the GST would not cause petrol prices to rise. It is history now that that was effective until the price of petrol went through about 77c a litre. We only dream about petrol prices of around 77c a litre now. The government came under some pressure as a result of that. It was quite obvious that 7c a litre was not going to be sufficient when a 10 per cent GST was added to meet their election promise. We all waited with great expectation for them to review that commitment and make the reduction 8c or even 9c, which is probably the appropriate number required to meet that commitment. After the long wait, what did we learn? We learned that, instead of reducing it by 7c a litre the government had decided to reduce it by 6c a litre only, claiming that there were embedded wholesale savings on behalf of the refiners and the major oil companies generally that should be passed on to the consumer. We know now that those embedded wholesale taxes, if not fictitious, were going to take a long time to flow through the system. That was just another fraud the government attempted to place upon the Australian people. The opposition will hold the government to account on these promises. We will do all in our power in the Senate to hold the government to its promises on both petrol and beer and we will be out there standing up for the consumer and those small business operations that have been affected also by that broken promise.