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Thursday, 29 May 2008
Page: 3772


Ms JULIE BISHOP (10:53 AM) —The events of this week have revealed that this is a government that will be defined by its lack of belief in the policies which it seeks to espouse. This is a government that will be characterised by its focus on spin over substance. This is a government that does not care whether a policy is right or wrong, does not care whether it is economically sound or economically weak and does not care whether, in this instance, the policy will drive up the price of petrol and hurt families living in Western Sydney and outer suburbs. This is a government which does not care whether its policy is right or wrong but only whether it can get a cheap headline, a five-second grab on the nightly news. We have never seen a government so driven by spin as the government that occupies the treasury bench today. We have never seen a government that disregards the advice of the four most significant economic advisers in the Public Service. It ignores that advice, all for the sake of a cheap headline—another symbol—as if it is doing something.

What an extraordinary revelation there was this week: we have a government that is prepared to ignore the advice of the experts in government—its own economic advisers, its own experts—for the sake of covering its position, which it took to the last election, that it could do something about petrol prices, when it knew it had no policy to do any such thing. It is extraordinary that after just six months the government has been revealed as a sham. It is in disarray; it is in denial that it is promoting a fundamentally flawed policy. Why should the Australian people listen to the novice Treasurer, a man who is still on probation? Why should the Australian people listen to the Treasurer when the economic experts in the government say that this FuelWatch scheme is fundamentally flawed? We know that the Department of the Prime Minister and Cabinet advised that the scheme might result in a small price increase. Why should the Australian people listen to the Treasurer, who is still on training wheels, rather than the Department of the Prime Minister and Cabinet, who advised that the scheme might result in a small price increase?

The Prime Minister went around the country before the election promising that he would do something about petrol prices. He spent six to eight months telling the Australian people, ‘Put me into office and I will do something about petrol prices.’ And they believed him. They took him at his word. They gave him the benefit of the doubt. We now know his own Department of the Prime Minister and Cabinet says that the quick fix that the Prime Minister has happened upon—a national FuelWatch scheme—in fact might result in an increase in petrol prices. Why should the Australian public listen to a Prime Minister who has no background—no experience, not even a passing acquaintance—with economics? Why should they listen to him when Treasury estimated that the scheme would result in ongoing increased operating costs of around $4,000 per annum to affected small businesses?

Small businesses are the lifeblood of this nation. They are the backbone of the economy. And you have advice from Treasury that estimates that this fundamentally flawed scheme would result in ongoing increased operating costs of around $4,000 per annum to affected small businesses. Don’t small businesses come within the definition of ‘working families’? Isn’t this government concerned about putting an extra $4,000 a year on small businesses? What impact will that have on small businesses around the country? Does the Treasurer even care what would happen to the small businesses that would have an increase of at least $4,000 as a result of this madcap scheme? Why should the Australian people listen to a Treasurer and a Prime Minister who have only been in the job for six months, when their Department of Finance and Deregulation advised that under this national FuelWatch scheme the price commitment rule might result in higher average petrol prices? The department of finance has advised that the price commitment rule might result in higher average petrol prices. Why would you introduce a scheme that may result in higher average petrol prices? You have got Treasury advising that it would result in ongoing costs of $4,000 per annum for small businesses; you have got Prime Minister and Cabinet advising that the scheme would result in a price increase; you have got Finance advising that the scheme would result in higher average petrol prices. Why would the government introduce a scheme that will result in higher petrol prices?

Finance went on to say that it would add over $20 million to business costs in the first year, with the impact likely to fall disproportionately on independent retailers. We know the government’s attitude to independent retailers. We heard the member for Leichhardt yesterday saying that he does not care about the impact on independent retailers. Why won’t the Prime Minister and the Treasurer admit that this scheme would result in higher average petrol prices and add $20 million to business costs in the first year and that the impact is going to fall disproportionately on independent retailers?

Independent retailers are family businesses as well. Don’t independent retailers come within the definition of ‘working families’? Are these another group to be excluded because of this government’s ideological fix on trying to get an answer to cover the spin that it so misleadingly put to the Australian people at the last election? They promised people—and this is what they believed—that the government would do something about fuel prices. We assume they were not promising to drive fuel prices up, but that is exactly what this national FuelWatch scheme will do. This is the advice from no less than the Department of the Prime Minister and Cabinet, the Department of the Treasury and the department of finance.

Then we turn to the Department of Resources, Energy and Tourism, and we know that this department is supported by its minister, the member for Batman. The department of resources and energy is concerned that the scheme will reduce competition and market flexibility, increase compliance costs and has more potential to increase prices. So now you have another department saying that the scheme will reduce competition and market flexibility and increase compliance costs on small business and on independent retailers and has more potential to increase prices. So you have got Prime Minister and Cabinet saying that it will increase prices. You have got Treasury estimating $4,000 in increased costs on small business. You have got Finance advising that it will result in higher average petrol prices and $20 million in the first year of increased costs on independent retailers. And you have got Resources and Energy concerned that the scheme is reducing competition and market flexibility and increasing compliance costs, with the potential to increase prices.

With this mounting evidence against the scheme we then get the department of industry describing it as ‘anticompetitive’ and saying that it will ‘increase petrol price coordination amongst retailers’. In other words, it will have the very opposite effect from that which the government tries to tell the Australian public it will have. This is breathtaking hypocrisy, when it has received advice from the economic heart of the government, from the people who actually know what they are talking about—not a prime minister who has not even a passing knowledge of economics, not a Treasurer who is still on probation and still on trainer wheels. This advice comes from the heart of the economic advice within this government and it is being wilfully and blatantly disregarded.

What has happened since the election? Why has this government become so arrogant that it believes it can dismiss the views of the Australian Public Service that are experts in the very field that the government is seeking to ignore? Not 12 months ago the Labor Party, when in opposition, was referring to Treasury and Finance as the Commonwealth’s top economic advisers. Before the election they were ‘highly regarded by the opposition as the Commonwealth’s advisers’. The Prime Minister, then the Leader of the Opposition, said in March 2007, ‘If you are serious about national economic reform, if you are serious about it, you ask the Treasury for advice.’ So back in March 2007 if you were serious about economic reform you asked Treasury for the advice. So we take it that when you are not serious about reforms you disregard Treasury advice. Is that what we take from what has happened this week? When you are not serious about economic reform, when you just come up with a madcap scheme like a national FuelWatch, you ignore Treasury advice.


Mr Albanese —What about the WA Liberal Party scheme?


Ms JULIE BISHOP —I will come to that. Then the Treasurer said that he wanted to quote an ‘eminent authority’ on this, and he was talking about an eminent authority on economic reform. Who was he talking about—himself? No, not at that time. Was he talking about the Prime Minister? Certainly not. In May 2007 he said that the eminent authority was the Secretary of the Treasury. What has happened in 12 months? Why is Ken Henry no longer the ‘eminent authority’? The Treasurer, then the opposition Treasurer, said that the government’s pre-eminent economic adviser was the Secretary of the Treasury. Now he has been relegated to the back bench and is no longer the pre-eminent authority for economic advice.

It is capped off by a piece written by the then Leader of the Opposition, now Prime Minister, when before the election he described the role of Treasury in the heart of government. He said:

The commonwealth Treasury is no ordinary agency of state . . .

And then he went on to say:

As a former Commonwealth public servant, I know—

this is the Leader of the Opposition, now the Prime Minister—

from experience that the Treasury is staffed with the most competent policy elite that can be attracted to the Australian Public Service.

The only thing that the Prime Minister knows about economics is that the best economic advisers in the country are within the Treasury. He said that it is ‘no ordinary agency of state’. It is not advice that you take when you feel like it and you disregard it when you have got a cheap stunt that has to grab the evening news and the next headline. The Prime Minister said that he knew ‘from experience’—the only experience that he has got in this area—that the Treasury is ‘staffed with the most competent policy elite that can be attracted to the Australian Public Service’. And now he is trashing their reputation, ignoring their advice, wilfully disregarding Treasury and the other economic advisers within government.

In this article the Leader of the Opposition, now Prime Minister, went on to say that Treasury:

... are part of a tradition that sees their role as the continuing custodians of the nation’s long-term economic wellbeing, providing robust advice to the government of the day, irrespective of the political complexion of that government.

That is what they said before the election. Now when they are in a jam and their national FuelWatch scheme is unravelling before our very eyes, they start trashing the Public Service. The minister for finance dismissed them the other day as ‘fat cats’. Don’t think that didn’t get around the Public Service! The Treasurer has dismissed their advice as ‘academic’ and then today—this was a doozy—we had the Assistant Treasurer revealing that the four departments that advised the government against the implementation of the fundamentally flawed FuelWatch had been ‘captured’ by the vested interests of the big oil companies. What is the Prime Minister going to do about his four departments that the Assistant Treasurer says have been captured by the vested interests of big oil companies? This is what the government is saying: anybody who disagrees with their fundamentally flawed FuelWatch scheme has been captured by the vested interests of big oil.

That means Ken Henry and the Treasury; Terry Moran and the Department of the Prime Minister and Cabinet; and all those people in the Department of Innovation, Industry, Science and Research and the Department of Resources, Energy and Tourism. They are all captured by the vested interests of big oil companies. This is how silly the government are appearing now. This is how ridiculous their argument has become. Why do they not just admit that the evidence is overwhelmingly against FuelWatch and that their own departments have pointed out the fundamental flaws?

The Treasurer used to have on his website the statement that the coalition would ignore Treasury advice at the economy’s peril. That is what he used to think—that you would ignore Treasury advice at the economy’s peril. And now this government, in its quest for cheap populism, for the five-second grab, for a cheap headline instead of cheap petrol, is ignoring the very advice that it says puts the economy at its peril. This scheme is fundamentally flawed and should not be introduced nationally. (Time expired)