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Wednesday, 26 March 2003
Page: 13508


Mrs DE-ANNE KELLY (9:49 AM) —I rise to speak on the Energy Grants (Credits) Scheme Bill 2003 and the Energy Grants (Credits) Scheme (Consequential Amendments) Bill 2003. These bills honour a commitment made by the government in May 1999. That commitment was to replace the Diesel Fuel Rebate Scheme and the Diesel and Alternative Fuels Grants Scheme with a single mechanism to provide excise rebates to those who had received them under the previous arrangements. Under the provisions of the principal bill, an individual will be entitled to an off-road credit when purchasing diesel fuel for use in eligible activities. Those eligible activities are the same as those currently eligible under the Diesel Fuel Rebate Scheme. Likewise, a person will be eligible for an on-road credit when purchasing fuel for the same activities that currently qualify under the Diesel and Alternative Fuels Grants Scheme. This is sensible legislation that combines two very successful schemes, and it will continue to benefit those who have received assistance from these arrangements in the past.

I note that in his speech to the House the shadow Treasurer, the member for Fraser, raised the issue of incentives for the use of cleaner fuels. I was somewhat bemused by the member for Fraser's query about incentives for cleaner fuels. Whilst he may see that as gaining some political advantage, the reality is that the member for Fraser's stance on this bill is in stark contrast to his attitude on the cleanest and greenest of fuels, namely ethanol. However, I will return to that later. I also note that the member for Fraser sought to embarrass the government for not accepting the recommendations of the Trebeck inquiry into fuel taxes. For the edification of the member for Fraser, it is not a prerequisite of the government to simply accept the findings of a report that has been handed down. What the government does is act in the best interests of those who will be affected.

Although I understand that Mr David Trebeck is an economist of some repute and, undoubtedly, did a considerable amount of research and consultation to produce his report, that does not make his report infallible. I read a great deal of that report, particularly with regard to ethanol, and noted that Mr Trebeck made the assertion that ethanol would always have to be subsidised and/or would be a cost to the motorist. The reality is that that is simply flawed. I am afraid the report did not consult adequately. The new processes available for ethanol, such as ZeaChem, should, when the research is completed—and we must say `should' because the research is still in the finalisation stage—make ethanol directly competitive with petroleum, even with a full excise applied. The report was scathing of ethanol but plainly had not done any homework on the new technologies and processes that are available.

Returning to the member for Fraser for a moment, I notice that in his address he talked a lot about the government and our attitude to fuel taxes. Unfortunately, he also passed over the previous government's approach to fuel taxes. With the record they had, why wouldn't you pass over their approach to fuel taxes? So let us cast our minds back to 1983. When the Hawke-Keating government took office, fuel excise was only 6.155c a litre.


Mr Cox —Are you going to cut it back to that?


Mrs DE-ANNE KELLY —At least we stopped indexation. What happened when the Labor Party left in 1996? I note the member for Kingston is interjecting. Let me say this to the member for Kingston: when you left government in 1996, fuel excise was 34.183c a litre, an increase of 450 per cent—that is, in a country as large as Australia, a rate of 35 per cent for each and every year of your 13 years in government. No wonder the shadow Treasurer does not want to talk about fuel taxes under the Labor Party.

What happened under the coalition? To June 2001, the increase was only 2.3 per cent, not the 35 per cent for each year of the opposition's period in government. And what has the rise been since 2001? Zero—because we have scrapped the indexation of fuel, which under the Hawke-Keating government took advantage of people in rural and regional areas and drove this vast country, which is dependent on transport, deeper and deeper into supplying the coffers of the Labor government. What we have done has resulted in savings to motorists and truck operators of $150 million in 2000-01 and $425 million in 2002-03. That means that people in rural and regional areas and cities can get their supplies of goods much cheaper. It also means that when we export we do not have the Labor Party—as they were in government—with their hands in transport operators' pockets. This saving will rise to $785 million in 2003-04 and to $1.135 billion in 2004-05. I will leave it to the House to imagine where fuel prices would have been today under a Labor government. Major fuel users and motorists certainly know the difference.


Mr Cox —Where do people go to get an income tax cut?


Mrs DE-ANNE KELLY —We are not going to get any cuts under the opposition. In fact, I understand that the opposition is planning to increase the Medicare levy, so there are not going to be any tax cuts under the opposition. And people are fully aware of that; they know what you did with fuel and they know what you will do if you get in again. That is why the Labor Party's arguments about fuel taxes are meaningless. It is the track record that counts and you do not have it. Did the Labor Party, for instance, introduce a Diesel and Alternative Fuels Grants Scheme to benefit the trucking industry hauling freight outside of capital cities? No, it did not. It took a coalition government to introduce this National Party initiative, which has served to benefit those of us who live in rural and regional Australia. It is significant that fuel prices in rural and regional centres have moved much closer to those in city areas.


Mr Cox —They did not.


Mrs DE-ANNE KELLY —Did the Labor Party apply the diesel fuel rebate to marine transport? There was no joy there. They had a standing committee that went around and looked at tourism, particularly, and the impact of taxes on it, but they did not do anything about it. Again, it was left to the coalition government to do what needed to be done. The marine tourism industry in my electorate of Dawson—the largest marine tourism industry in Australia, particularly for charter boat operation—and all the others around the Australian coastline are the beneficiaries of the scrapping of fuel excise on marine operations.

If you are running a charter boat operation out to the reef—and, of course, fishing operators have always enjoyed this, as they should—and you are in the marine tourism industry, it is a huge boost. When, unfortunately, tourism was down, one of the charter boat operators in my electorate said that his only opportunity to remain in business that year was the fact that he did not have the fuel excise imposed on his business. Fortunately, things are looking up in charter operation, but this was of significant assistance to the marine tourism industry. They remember who did it and they remember who did not do it—and let me tell you, they love the coalition's record. I remind the charter operators of what we did whenever I go down to Airlie Beach. They are very grateful, and they will not be voting for you lot again. So the Labor Party cannot hide. They cannot hide from their history with farmers, motorists and others when they increased the diesel fuel rebate by 35 per cent every year and never let the tourism industry have a go.

I would like to return to my earlier remarks in this address about the shadow Treasurer talking about cleaner fuel use. This appears to be largely an attempt to discredit the Treasurer's decision to defer the excise surcharge to encourage the use of low sulfur diesel. The Treasurer has quite rightly deferred this measure. It was due to be introduced on 1 January 2003. In case the member for Fraser has not got around much lately, there is a drought in Australia, and it is extremely expensive for people to transport stock, stockfeed and water to their properties.

While the government has given significant drought relief—the greatest that has ever been delivered by any government—the drought is by no means over. It is creating a huge impost on some, particularly those in western New South Wales and south-west Queensland. To introduce the measure from 1 January would have compounded the pain and the difficulties of those living in rural and regional areas. It certainly would have increased grossly the transport costs of those hard-pressed folk living in drought stricken centres. Plainly, the Treasurer understood this and acted accordingly. The sensible nature of this decision has obviously escaped the member for Fraser as he wants to score some cheap political shots rather than give credit to a government that has understood the difficulties and the constraints of one of the worst droughts in living memory.

However, the cheap shots do not stop there. Just as it was in the debate over the low sulfur diesel excise surcharge, the Labor Party, through the shadow Treasurer, has been complicit with some of the major oil companies and some elements of the media in attempting to kill off ethanol as a fuel additive. One major casualty has been the cancellation of the ethanol trial in Brisbane being run by BP Australia and funded by a Commonwealth grant. To be fair to BP, they have been strong proponents of ethanol and I believe they were sincere in finishing their trial. However, Labor in New South Wales ran a dishonest campaign, particularly during the by-election for the seat of Cunningham. It did not do the opposition much good, I might add, to run that scare campaign in the seat of Cunningham, as we have seen, because that seat went to the Greens. The result of that was not only not winning a seat, because people plainly saw through the scare campaigns, but also that public confidence in a green, renewable fuel that will be competitive with petroleum has been severely impaired.

I do not know where the opposition get their information. Perhaps they are aware that ethanol is a major component of fuel in the United States where soon their production will increase to 19 billion litres a year. Brazil uses fuel blends of up to 85 per cent ethanol—all with no ill effect. The opposition ignores the fact that Holden—the great Australian car, and I like driving a Holden—exports vehicles, with very minor modifications to the fuel system, to Brazil where—guess what? They operate very well on a 22 per cent ethanol blend. But you know what? You cannot do that in Australia. So the question is: are the vehicles in Australia that could be modified or that run on a 10 per cent blend inferior—and I do not believe they are—to our export vehicles? Or is it simply a matter of bureaucracy, Labor opposition, oil companies and some of the major motoring organisations conspiring with fossilised thinking to keep out a renewable fuel.

They have ignored the fact that the Australian Service Stations Association has been running a progressive trial, which commenced in 1994, on four vehicles using a 20 per cent blend—much more than has been proposed as a mandated amount in Australia. Those vehicles have travelled somewhere between 76,000 kilometres and 282,000 kilometres and they cover everything from sedans to the well-loved Australian ute. Guess what? There are no adverse effects. But that is lost on the opposition. These vehicles have run on a 20 per cent ethanol blend for up to 282,000 kilometres with no adverse effects. So when the shadow Treasurer talks about the use of cleaner fuels he should stop speaking with a forked tongue and start promoting the use of cleaner fuels in Australia.

There are very few fuels that are as clean, green and renewable as ethanol. If Australians were given a choice, through labelling, of which blend of fuel they wanted, if they knew that the fuel they bought as an ethanol blend was renewable and if they were given the opportunity in the future to have a fuel that was directly competitive with petroleum, I do not believe that Australians would choose to drive on imported oil when they could drive on the grain or cane paddock down the road. Provided all other factors were equal and the tests had been done to show, as we know from the United States and Brazil, that there are no adverse effects from ethanol blends, I do not think that motorists would choose to travel on an imported oil extract when they could use the cane or grain paddock down the road.

In closing, I will say that the new Energy Grants (Credits) Scheme has the support of Australian farmers, who see no practical change from current arrangements. Likewise, the Australian trucking industry see no practical change. In the Australian Financial Review of 21 February 2003, the chairman of the Australian Trucking Association, in referring to the Energy Grants (Credits) Scheme, said:

This will assist the trucking industry to service Australia's growing domestic and export freight task in an efficient and safe manner.

Clearly that is someone who understands the issue and appreciates what the government has done. I am afraid there is very little hope for the fossilised thinking on the opposition benches as they deal with a fossilised fuel. However, I trust that these bills will enjoy a speedy passage through the House and the Senate. I commend the bills to the House.