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Monday, 15 September 2003
Page: 20096


Mr ANDREN (8:30 PM) —The Fuel Quality Standards Amendment Bill 2003 is concerned with establishing a labelling system for all fuels available in this country. But, as we have heard from the speeches on this bill, it is very much caught up in the current ethanol debate. This bill has been referred to the Senate Environment, Communications, Information Technology and the Arts Legislation Committee for report by 28 October 2003, a deadline which is unlikely to be met, yet the House of Representatives proceeds with debate before the committee's findings are available. Again this highlights the need for a House bills reference committee. That is patently obvious, given the intensity and passion of the debate around one of the fuel additives that we are debating—that is, ethanol.

This is all the more serious in light of the potentially very complex nature of such labelling—whether or not something contains ethanol—as evidenced by the ethanol working group's report that more than three million cars of many different ages and makes may not be suited to ethanol. The public is demanding some clear and definitive answers on this. The Senate committee is to examine the effectiveness of the bill in delivering an enforceable national labelling regime that will achieve consumer choice in fuel purchase and the likelihood of the proposed amendments resulting in key provisions of the act being enforceable. It will also examine the bill's provisions on the development of fuel quality information standards. Surely this is critical to any proper debate of this legislation here in the House of Representatives.

The bill establishes a national framework for fuel labelling in Australia. It will override state and territory laws where the Commonwealth makes fuel quality standards and create strict liability offences for the key offences provision. The objective of the labelling is to reduce the levels of pollutants and emissions arising from the use of fuel that may cause environmental and health problems, facilitate the adoption of better engine technology and emission control technology, and allow engines to operate more effectively. The minister is to determine the base fuel standard only after consultation with the Fuel Standards Consultative Committee. Members of this committee include representatives from each state and territory, one or more representatives from the Commonwealth, one or more representatives from the fuel producers, one representative of an non-government body with an interest in the protection of the environment and one person representing the interests of consumers—a good, solid review group, you might say.

The bill provides that if its provisions are contravened this will be a strict liability offence, which means that the courts do not have to prove that the defendant had guilty intent in failing to adhere to the bill's provisions—nor do courts have to prove fault; that is, recklessness or negligence. So failure to comply is punishable but there is still the possibility of arguing the defence of a `reasonable mistake'. The bill basically assumes that all those in the industry will have the required knowledge of the applicable fuel standard and therefore will comply. This means the prosecution does not have to go about proving the defendant has this knowledge. If offences were not strict liability offences, enforcement would be exceedingly difficult. The punishments have been reduced accordingly—fines only and no imprisonment. The maximum fine—which has been halved—is 500 penalty units, which is $55,000. For a corporation the maximum fine is 2,500 units, which is $275,000. That is all pretty reasonable. Fuel labelling is essential as we move toward biofuel and clean fuel alternatives. We are in a transitional time of development, and people need to know what they are buying. I support labelling, but how can this bill be passed without the findings of a proper review committee with regard to its effectiveness? Notwithstanding that, I can only support the bill at this point in the expectation that the inquiry and review in the other place will iron out any flaws before it returns here.

Let me just briefly mention the ethanol debate. Here I support my colleague the member for New England in agreeing that the government's support program is not long enough to enable sufficient encouragement of all potential players in this market. If ethanol is as effective as other countries seem to believe then its use, quite frankly, should be mandated. That this bill is subject to inquiry is not unusual; that related excise bills are held up in the Senate is part of the opposition parties' attempts to obtain the release of the full minutes of discussions between the Manildra Group and the Prime Minister. It strikes me that this impasse—where, by Thursday night, we may have the current excise on ethanol lifted but the domestic subsidy maintained—can be broken by the simple release of those documents. The public can be excused for being totally bewildered to the point of abject cynicism by the shenanigans around ethanol in this country.

The European parliament strongly supports biofuels, including ethanol, through tax exemptions and other means. There is strong support throughout the US for ethanol blends, with the oil companies cooperating in the process, it would seem. A similar story pertains in New Zealand. The University of Sydney's Professor Ray Kearney says that benefits to our health, the environment and the economy will arise from the expansion of the market for ethanol-blended fuels and biodiesel. However, the parliamentary research paper says that the positive benefits relating to greenhouse gas emissions depend on how the ethanol is produced. Whilst ethanol produced from woody feedstock results in substantially reduced full fuel cycle greenhouse gas emissions, ethanol produced from starchy crops does not produce significant full fuel cycle greenhouse gas savings over conventionally produced gasoline. That needs to be fully tested, I would suggest. Yet ethanol production from corn is booming in the US—it is a starch based product. It is being used as a blend and to create an improved ethanol-powered fuel cell. The US Renewable Energy Action Project says CO2 emissions are reduced by 35 per cent by using ethanol.

Up to 20 per cent blending is used worldwide, yet here we have the oil industry actively campaigning against ethanol blends. If the science is sound, then why wouldn't the oil companies want to extend what is a finite supply of petroleum by using an environmentally friendly additive? It makes more sense to dilute a last bottle of cordial than to guzzle it all up, although the oil companies seem determined not to give up even a 10 per cent share of the market. Is it as short-sighted as all that, or am I missing something? Whatever the finite nature of oil supplies, the oil companies seem determined not to give up even a 10 per cent share of the market.

However, complicating this scene further, we have a government not being open and honest enough with the public about the arrangements it makes with ethanol producers. We have innuendo and suspicion cast across the alternative energy debate, with claims of special help for political mates. Whatever the merits of ethanol, we should not have any government, opposition or, indeed, independent member or senator compromised by campaign contributions from anyone. Banks, retailers, media operators and, yes, oil companies, are all listed on the AEC web site as big donors to political parties. So too is the alternative energy sector, it seems. Only a cap on campaign spending will reign in the donations and remove this odious influence from Australian politics. Public perception is everything, and corporate or interest group donations to the political process can only be controlled by controlling the spending of individuals in individual seats and legislating for free broadcast time. It is not rocket science; it is the sort of policy that is in place in the UK—have a look.

This ethanol mess is one of the government's and industry's own making, contributed to, no doubt, by the duplicity of the oil companies. It blurs the debate we should be having: how best to develop alternative energy in this country. That industry should be developed through cooperation and sharing by government, oil companies and alternative energy producers, not by policies that favour one, two or three producers. The opposition wants to cover all bases with its second reading amendment: attack the government, promote strong labelling, hop into bed with oil companies by suggesting ethanol will wreck engines, and legitimately criticise the government's secrecy around negotiations on protecting the local industry at a time when that local industry is dominated by one producer, in at least one aspect of the ethanol production area. That producer has, incidentally, stuck by the product. I supported him strongly through the times when he lost the bounty assistance, and still do. Manildra, incidentally, is in my electorate and I went into bat when they lost that bounty. The former government introduced that bounty and it was knocked off by this government in 1996 or thereabouts on the grounds that it was not an efficient way of encouraging an alternative energy industry. Here we have another system in place which, to my mind, does not do anything substantially different, notwithstanding that loss of bounty assistance, as the member for Gilmore has been since she came into this parliament.

Let us not be duplicitous about this; let us not do deals behind closed doors. Let us get out and debate with the public and have a proper investigation into the value of ethanol. Let us go over the more recent information, which seems to cloud some of the earlier stuff that was around in the late nineties suggesting that perhaps the energy efficiency—in terms of CO2 reduction in the production process for wheat or sugar—is not as efficacious as perhaps some other means of producing ethanol around the world. Let us have it all out there and let us really look at the industry and see how valuable it is in the long run.

I believe it is an industry worth supporting—and not just because Manildra is in my electorate—I have thought that for many years. I support any sort of investigation into alternative energies that are going to reduce the amount of petrol guzzling and indeed the fanatical rush to control the oil reserves of the world, part of the problem we see today in the Middle East crisis. Let us be constructive around alternative energy and then one day perhaps we may find alternatives that will not only deliver a cleaner earth but a more peaceful earth. So, while the public hopes the air will become clearer with cleaner fuel, the debate is muddied by the crass opportunistic politics on both sides of this debate. Hopefully, the fuel quality standards legislation before us will at least clear up the product choices for motorists, and to that extent I support the bill.