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Monday, 7 November 2005
Page: 11


Mr LAMING (1:06 PM) —I want to address the contribution from the other side of the chamber, by the member for Holt, on the motion relating to fuel prices, beginning with the notion of applying a competitive blowtorch to the oil industry in an effort to get cheaper prices. A simple analysis that has been carried out by nearly every recognised international agency shows that the spike in fuel prices in recent times can be attributed to a number of reasons, relating to both a decrease in supply and an increase in demand. There is no better source than today’s release of the Reserve Bank of Australia’s quarterly statement on monetary policy. In this report they have dedicated an enormous amount of space to talking about the impact of fuel prices, and they focus on the international factors.

What is more interesting to me, though, is the predilection on the other side of the chamber to always focus on trying to blame someone, and when that is big business it obviously suits their line. We heard comments from the Leader of the Opposition that applying a ‘blowtorch of competition to the fuel industry’ would be a great idea. I would draw the attention of the member for Holt to a paper by a neighbour of mine, the member for Rankin, who I thought came up with an excellent contribution that talked about snake oil solutions, about which we are hearing from the other side. In his paper the member for Rankin said quite clearly that ‘there are no magic solutions’ and that there are none because ‘Australians are smarter than that’. For the word ‘that’ you can insert the words ‘the opposition leader’, because the member for Holt will know that the opposition leader has four solutions to high fuel prices. First, let us cut our import bill by growing a liquid fuel market. Of course, growing a liquid fuel market has nothing to do with fuel prices when you have international parity pricing. Is the opposition leader talking about keeping Australian oil from international markets? Of course not; that is not a solution.

The second solution from the opposition leader is that we place less reliance on oil imports in the future by growing the biofuels industry. Doesn’t the opposition have a glorious history! The member for Holt will well remember the comments from his colleagues three years ago when they tried to talk down ethanol at every turn: ‘The government knows that it is pouring taxpayers’ money down a hole.’ I recall another member on the other side saying that motor car manufacturers say that ‘putting this fuel in engines can void your warranty, damage your car, damage your boat and lead to boating accidents’. That was the sort of confidence that the opposition had in biofuels at that time. I also recall another comment that they failed to see any demonstrated advantages in subsidising a local ethanol industry. That was idea No. 3. Obviously great ideas on the other side of the chamber come in fours. The fourth was that we have to give all Australians a decent tax cut. This is a pathetic contribution to addressing fluctuations that are fundamentally international.

We obviously have here a recurring pattern of behaviour from members on the other side of the chamber, with them picking out economic issues without any credible, long-term ability to understand how they actually work. We can recall comments last year about an overheating economy. Earlier this year we were worried about the national debt, with a completely underwhelming case being put by the opposition. Certainly the Reserve Bank of Australia did not appear to agree with them when they were saying that banks were primarily lending on housing and that there was long-term debt, predominantly hedged in Australian dollars—long term not short term. The bank did not appear to share that concern.

The second concern was the budget deficit. Ignoring the strengthening terms of trade, the opposition were worried about a budget deficit. Now they are blaming retailers and they are blaming the fuel sector for price gouging, without a terribly credible case being put. The simple fact is that this is not like every other oil crisis, such as we saw in the seventies. Australia’s economy is now significantly internationalised. There are liberalised financial arrangements, which means that we are more resistant to endogenous shocks but also that we are more affected by exogenous shocks, including the price of fuel.

What has happened recently? Let’s look at the basics. It is there in the report: we have an increasing demand for oil, but for the first time there is a sense within the markets that this will be an ongoing and strong demand for oil that could outstrip supply—when we look at 62 per cent of the demand of the oil coming from the United States and China. That is the reason for what is going on here. Finally we have now a fall in the price of oil, down to $60 a barrel. In my electorate fuel prices have fallen to $1.05 a litre, yet those on the other side were saying that we may never again in our lifetimes see fuel priced under $1 a litre. I sense that we are very close to seeing it within a month.

On these issues this motion by the member for Holt shows short-termism and the failure to really address economic issues responsibly by those on the other side. They have never come to terms with a liberalised economy and they have always had deep resentments about the benefits that this government has provided. They very much are sitting around a table at a Chinese restaurant arguing for the very few. (Time expired)