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Wednesday, 26 March 2003
Page: 13517

Dr EMERSON (10:34 AM) —The Energy Grants (Credits) Scheme Bill 2003 and the Energy Grants (Credits) Scheme (Consequential Amendments) Bill 2003 establish a new, unified scheme to replace two existing subsidy schemes. One is the Diesel Fuel Rebate Scheme and the other is the Diesel and Alternative Fuels Grants Scheme. They cover off-road fuel usage and on-road fuel usage respectively. Because they do this rationalisation and establish a unified scheme, we will be supporting these bills, but they really ought to be recognised not for what they contain but for what they omit. My colleague the member for Braddon has eloquently demonstrated the glaring omissions in the bills, and I will seek to reinforce the comments that he has made.

Everyone knows that there was a very solemn promise given about these bills—that is, that the pressing issue of incentives for cleaner fuel usage would be addressed in this legislation. Surprise, surprise—the truth is overboard again! I do not know how many times the Prime Minister and the Treasurer can toss the truth overboard and still go to the electorate and say, `Trust me; I'm the Prime Minister. Trust me; I'm the Treasurer.' Even their own party president has said that they are not to be trusted and in particular that the Treasurer is not to be trusted because he is `mean and tricky'. The party president certainly got that right. I understand he has been re-elected for his honesty and frankness. His judgment has obviously been vindicated in the eyes of the Prime Minister, because the Prime Minister has asked for his party president, who delivered this damning indictment of the Treasurer, to run another term. The Prime Minister did not consult the Treasurer about that, and the Treasurer got a bit upset and shocked when he learned that this bloke was going around the paddock again. He said, `This is the bloke who said I'm mean and tricky and I'm not to be trusted and you've given him another run around the paddock.' The Prime Minister obviously thinks the party president was absolutely right in describing the Treasurer as `mean and tricky'. He is mean and tricky, and we will demonstrate that pretty clearly.

One of the episodes of meanness and trickiness was the way he treated David Trebeck and his much lauded fuel tax inquiry. Remember that, when Labor was pursuing an inquiry into fuel taxation and the government was extracting very large amounts of revenue from fuel taxation, the government most particularly said it would compensate for the introduction of the GST exactly so that motorists would not be any worse off. The mean and tricky Treasurer and honest John Howard broke that promise. All hell broke loose, but they still put their hands on their hearts and said, `We've fully compensated motorists.' The motorists took a different view and they took a mallet to the Prime Minister and the Treasurer in the Ryan by-election.

Finally, the Prime Minister and the Treasurer saw the writing on the wall and said, `I don't think the punters believe that we have fully compensated them for the introduction of the GST.' And the voters of Australia were right, because there was a shortfall. It was only when things were going very badly for the Prime Minister and Treasurer that they said: `We'd better have one of these fuel tax inquiries that Labor is running so that we can say that we've had one. That might calm things down.' But it did not calm things down; things just kept happening until petrol prices finally started to fall a little as a result of a reduction in world oil prices. But they still had this inquiry, and their problem was: `Gee, we have set up this inquiry. What are we going to do with it?' They came up with a really bright idea, and the bright idea was: `When it comes out, we will bury it and hope no-one will ever notice that we had a fuel tax inquiry in the first place. We have tried to serve a political purpose with it, and that hasn't really worked, so we had better bury this thing.'

The first victim of the burial was David Trebeck. He had produced this very lengthy report—more than 250 pages of detailed analysis and recommendations. While Labor does not agree with all of those recommendations by any means, the government agreed with none of them—not one. On budget night, when there was a little bit of other news around—like the federal budget—they put out the fuel tax inquiry. And what was their response when they were asked about that? They said, `We are just putting it out.' And that is all they did. So poor old David Trebeck was the first victim of the government's insincerity—truth overboard—but of course Australian motorists, and particularly farmers, have become the second and enduring victims of the government's neglect.

The government dismissed this document from David Trebeck and, for those reasons, I think it is fair for us to be fairly cynical about the reasons for setting up the inquiry in the first place—and that was to deflect public attention so that they could calm things down a little. To cut a long story short, they finally introduced a new scheme that is intended to replace the two existing schemes. Because it does that and involves a modest degree of streamlining, Labor will be supporting it. We will send it off to a Senate inquiry, but if the government bats on with these legislative provisions then we will support it. We will only do so by moving the shadow Treasurer's second reading amendment, and it is to this that I would like to speak. For the sake of completeness, the amendment states:

That all words after “That” be omitted with a view to substituting the following words:

“whilst not declining to give the Bill a second reading, the House condemns the Government for its gross mismanagement of fuel tax policy, in particular:

(1) its failure to deliver measures to promote cleaner fuels, despite its explicit promise to do so in the agreement with the Democrats leading to passage of A New Tax System through the Parliament;

(2) its overall policy paralysis and deception, shown most starkly by its decision to dump all the Fuel Taxation Inquiry recommendations even before the report was released; and

(3) its inexcusable delay in finalising even the limited set of measures included in this Bill and the Energy Grants (Credits) Scheme (Consequential Amendments) Bill, which has left the transport industry with an extremely short timeframe to prepare for the new scheme before it comes into operation on 1 July 2003.”

The Trebeck inquiry had a lot to say about these schemes. I will not go through all the anomalies in the schemes, but I will just mention one in relation to the Diesel Fuel Rebate Scheme. The Trebeck inquiry said that the main issue seemed to be why `only some off-road diesel uses should be eligible for the Diesel Fuel Rebate Scheme' when `often, eligible and ineligible activities used very similar production processes and served very similar markets'. The Trebeck inquiry found a similar level of complexity in relation to the Diesel and Alternative Fuel Grants Scheme. In this case, the inquiry reported:

... concerns centred on geographic boundaries that limit the eligibility of diesel used in 4.5 to 20 tonne vehicles in urban areas.

In that case, the report noted:

Road transport operators may be required to allocate their fuel use into three categories of vehicles: less than 4.5 tonnes, 5.4 to 20 tonnes, and more than 20 tonnes. In addition, the amount of fuel used in 4.5 to 20 tonne vehicles needs to be allocated between trips carrying non-agricultural products solely in defined urban areas and other trips.

If that sounds streamlined then I would have to conclude that the new tax system for a new century is streamlined. That is the one that weighs 7½ kilograms and has already had 2,000 amendments and in the order of 90,000 private binding rulings. That is the government's idea of streamlining: this is the streamlined new tax system for a new century. This is now the streamlined new diesel grants scheme for a new century. It is a compliance nightmare, yet all the government has done in this so-called streamlining exercise is tinker around the edges.

It reminds us of the BAS nightmare, when the government said: `What is the problem? What is small business complaining about? This is giving them an opportunity to contribute to this great nation by spending night after night burning the old midnight oil trying to work out how to comply with the GST.' There was very little sympathy for them—except after Labor set up its own BAS inquiry. When Labor pointed out this compliance nightmare, finally, but only as a result of the political pressure that was generated in the broader community—including by Labor and, in fact, led by Labor—the government relented and made some minor streamlining changes. Labor has proposed again and again a very streamlined system for the BAS, but the government has said, `No, that won't work.'

I remember the industry minister scampering around the gallery with a department briefing note on our highly simplified BAS system saying, `I've got this department briefing note.' He had underlined a few of the points that the department made but failed to underline the department's main point, which was that this was a good idea. He gave it to various people in the gallery and said, `Don't tell anyone that I gave it to you.' Finally, some members of the press gallery contacted the office of the then shadow Treasurer, now our leader, Simon Crean. They said, `We've got a leaked copy of this document,' and the office said, `Yes, Ian would have given you that.' When we finally looked at the document, it was a pretty glowing endorsement of Labor's proposals to streamline the BAS. But that did not stop him from slinking around the gallery as a source.

The fundamental problem is what is missing. It was to be an Energy Grants (Credits) Scheme, as mooted in the agreement reached in May 1999 between the government and the Democrats. That was the agreement that ensured the passage of the GST. We should put this on the record. The statement issued by none other than the Prime Minister at that time says:

This scheme will be developed jointly by the Government and the Australian Democrats. It will replace the diesel fuel credit scheme on 1 July 2002—

Where are we now? March 2003—

by a jointly sponsored bill. The existing Diesel Fuel Credit scheme will have a sunset clause expiring on 30 June 2002. The Energy Credit Scheme will provide price incentives and funding for conversion from the dirtiest fuels to the most appropriate and cleanest fuels.

None of that has come to pass. This was a solemn promise. This was the cleaner fuels incentive scheme. This was the basis of the deal with the Democrats, which was done so they could go around and say, `We've got this great environmental outcome and that's why, with great reluctance and heavy heart, we supported the GST.' They got dudded. They got dudded by the mean and tricky Treasurer; they got dudded by the mean and tricky Prime Minister of Australia. Yet again, the truth has been thrown overboard. They told the Australian people that, `In a very short time, we're going to have this you-beaut scheme which is going to provide incentives for clean fuels.' It has never appeared; never ever. This is just like the GST that was never ever going to come in. It has never ever appeared. It is not in this legislation. They promised it would be in the legislation. They broke the deal.

The Treasurer broke the deal, but he is pretty good at breaking deals. I do not know why anyone would do a deal with him. I do not know if the Prime Minister is going to do a Kirribilli-style deal with him. I see he has told the Melbourne Age that, `When the Prime Minister turns 64, I'm going to hold him to his promise.' Is he going to tell us what he is going to do? I do not think he is going to tell you, Treasurer—and that is the problem—unless you do a Kirribilli deal. But we know that neither the Prime Minister nor the Treasurer would stick to it. This is the bloke who, when we were doing the business tax review, sat in that chair—and Simon Crean, the then shadow Treasurer, sat in this chair—and said across the table, `All right, we will make sure that this package is revenue neutral by bringing in a full range of anti-avoidance measures, as set out in our response to the Ralph Review of Business Taxation.' I was sitting there. The shadow Treasurer quite wisely asked, `Can we have that in writing?' The Treasurer said: `Of course you can have it in writing. My word is my bond, but if you'd like it in writing here it is.'

They came in a few hours later and swapped the letters across the table. We thought, `You beauty; we've got revenue neutrality, and they're going to crack down on tax avoidance through trusts and all of those other rorts and schemes.' The Western Australian Liberal Party in particular is very fond of those sorts of schemes and, back in the late seventies and early eighties, in fact designed schemes such as the bottom of the harbour scheme. The Treasurer said, `Here's my letter. My word is my bond; we're going to keep this deal with you.' They broke the deal. Almost with astonishment, the Treasurer asked: `Why would you think I would do anything else? I couldn't get it through the cabinet. That's fair enough. Yes, I wrote it down, I put my signature on it and I said that this is the deal and my word is my bond.' He broke the deal.

They have broken the deal again. This was supposed to be legislation providing incentives for cleaner fuels. At the time this deal was being struck with the Democrats, we described it as a dirty, sleazy diesel deal done dirt-cheap. It turns out that again we were right: it is a dirty, sleazy diesel deal done dirt-cheap. There is no deal. Dirt cheap? It was done for free! The government have got away scot-free. The Democrats have let them off the hook. They were supposed to provide in this legislation incentives for cleaner fuels. Those are not here. There is a little bit of tinkering around the edges, the bringing together of two existing schemes—the on-road and off-road schemes—and a little bit of streamlining, although it is very modest. The big hole is the breaking of the deal between the Democrats and the government.

I do not know the attitude of the Democrats to this. I know Senator Bartlett and I think he is an honourable person. He was not party to that deal, because the deal was done by Senator Lees and a couple of other senators who have now gone off to the right of the Democrats, while the others are still there trying to pick up the pieces. I do not blame Senator Bartlett. In fact, I blame the Treasurer for yet again breaking a deal. He did a dirty, sleazy diesel deal done dirt-cheap, and he has got away scot-free—not cheap but free. It is already March 2003, and the scheme is supposed to come into effect within four months. So farmers do not actually know what is going to be presented to them in terms of a clean fuels scheme. They have no idea. This has now been going on for four years. The government has done nothing whatsoever in this legislation in relation to cleaner fuels.

I will conclude with these observations about poor David Trebeck. On this the bloke is fairly honourable. We had a big fight with him over the waterfront, and we do not agree with the position he took on that. But he put a reasonable effort into this inquiry and it was stuck up on the shelf on budget night and left there. He also produced a report referred to by my colleague the member for Braddon on the US-Australia free trade agreement. That draft report was suppressed by the Howard government because they hoped Mr Trebeck and his colleagues at ACIL would say that the free trade agreement was a you-beaut idea. With respect to the report commissioned by the Department of Foreign Affairs and Trade, which came up with an absolutely shonky conclusion that this free trade agreement would be good for Australia to the tune of $4 billion a year, the government hoped that David Trebeck and ACIL would say, `That's an understatement and it's really bigger.'

It did not work out that way, because ACIL said—as my colleague the member for Braddon has pointed out—that a free trade agreement between Australia and the United States would make Australia and Australians worse off. Of course, when the government got this conclusion in the draft report, panic set in and they tried to change it. Eighteen objections were sent in in relation to that draft report, and a final report has been prepared. But, to their credit, David Trebeck and ACIL have not buckled under the pressure from this government. They have released a report saying that this free trade agreement is not in the interests of Australia.

Why are we pursuing this free trade agreement? I am quite sure that there is one simple answer: political opportunism. It is so that the Prime Minister can say, `I've got this special deal from my great and powerful friend, the President of the United States.' His own ambassador, who was a staff member, told the Cattlemen's Association in America that, with or without their support, this deal would go ahead and would be a top priority because Australia has followed the United States into Iraq. There is the caper: if we follow the United States into Iraq, we will get a trade deal with the United States which ACIL concludes is against the national interest. When will this Prime Minister ever start operating and behaving to protect Australia's national interest instead of the national interests of other countries and the interests of big business in this country?