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Tuesday, 29 June 1999
Page: 6796

Senator CRANE (8:08 PM) —I rise too to speak on the Diesel and Alternative Fuels Grants Scheme Bill 1999 and the associated bill that are before us.

Honourable senators interjecting

Senator CRANE —Mr Acting Deputy President, could I just ask you for some calm.

The ACTING DEPUTY PRESIDENT (Senator Hogg) —You are right, Senator Crane. You keep going in spite of the interference from your side and from the other side on my left.

Senator CRANE —Well, my right ear is better than my left.

The ACTING DEPUTY PRESIDENT —We will not get into the politics of your ears, Senator Crane. If you could deliver us your second reading debate speech, we would be most appreciative.

Senator CRANE —I would be delighted to; thank you, Mr Acting Deputy President. In talking to this legislation, I note Senator Forshaw's gratuitous comments. Before he spoke, I, in a very agreeable mood, agreed to swap over because he had things he wanted to do after he spoke and I had things I wanted to do prior to speaking, so it was not designed to enable me to attack Senator Forshaw. Nonetheless, there are some points that I must pick up on from his contribution here tonight. The first one is that his contribution was a rather consistent attack on our colleagues from the National Party who form part of the government in coalition with us. Let me just say that, as far as I am concerned—in government and where we sit today—an attack on my colleagues in the coalition government is an attack on me. I think some of the things that were said here today were really quite off the beam.

At the beginning I must declare an interest in this because I am a partner in a farming partnership—Seacrest and Wyena Partnership, trading as A.W., J.R. and P.A. Crane. I put that on the public record at this point in my speech. The second comment I want to make is that there is a truism—and I think this is very appropriate and something, through you, Mr Acting Deputy President, that Senator Brown should take account of in some of his environmental comments—that without a strong economy you will never effectively support the environment or deal with the environment issues, particularly when it comes to the farming and mining sectors. If they are going to play their part—and they are increasingly playing their part today in terms of what is happening through Landcare and the rehabilitation of mining sites et cetera—they need to be strong financially to carry out the particular aspects of that. To have a situation which is encouraged consistently—and we heard Senator Margetts at estimates the other day on the costing structures of our industries—

Senator Brown —Mr Acting Deputy President—

Senator CRANE —What's your problem, Bob?

Senator Brown —I will tell the senator in the chair my problem.

The ACTING DEPUTY PRESIDENT —Resume your seat, Senator Crane.

Senator Brown —Mr Acting Deputy President, my problem is that 20 minutes from now the Democrats are going to guillotine this debate and I think they should be in here to listen to Senator Crane's contribution. I think that is only fair. There is not one of them in here. I draw your attention to the state of the Senate. (Quorum formed)

Senator CRANE —I will repeat what I was saying: it is a truism that without a strong economy you will never effectively support the environment. It is rather interesting that Senator Brown should call a quorum and nominate the Democrats; I am rather interested to know why he did not call a quorum to get Senator Margetts down here. She is notable by her absence, particularly in view of what she had to say at estimates with regard to the diesel fuel rebate and trying to put a shackle around industry in this country. That would be a shackle particularly around the industries that are rebuilding the environment in this country, including the forestry industry—as you well know, Senator Brown—and the fishing industry, which has put an enormous amount of restriction on its operations to guarantee stock and to rebuild stock in the fishing areas it is going into. That is being done by the fishing industry in consultation with the various authorities; it is not something that is being forced down from on top. Of course, if it were being forced down from on top, we all know it would not work.

In dealing with this aspect, one thing that needs to be recognised—and those on the other side of the chamber do not seem to be able to recognise it—is that this legislation is a small part of a total package of tax reform. People often stand up here and say, `Well, it's only this percentage of that,' or, `It's only that percentage of that.' When you add it all up and put it all together in terms of our export industries, which I am particularly interested in, there is in the order of $4½ billion of savings to those industries.

The impact of those savings will be to put us on the same playing field—the same tax situation—as our competitors in the rest of the world: the US, Canada, Brazil, Asia and Europe. We will be on the same playing field they are on, and in that sense it is going to provide Australian producers with enormous capacity to penetrate additional markets around the world. People forget the importance of this aspect in a strong economy, which enables us to employ people and to do all those things you need to do to keep our standard of living in a satisfactory state.

Diesel is the main source of energy for industry in remote areas of Australia, whether we like it or not. Petrol is important, but it falls into insignificance in comparison with diesel. Diesel is the only effective fuel that the farmers, the miners, the fishers, the forest industries and the tourist industries have to carry out their economic tasks. Hopefully, we will see further developments in fuel, and I support all those aspects very strongly, but the reality is that, even with the excise out, we are still one of the highest priced fuel economies in the world. Our prices are higher than in Canada, Chile, the US and Europe. When you add all these things together, and even though 2c or 3c a litre is the margin, we are still higher. We are not giving some bonanza that other people in the rest of the world enjoy, and that needs to be understood.

Senator Forshaw made some comments about petrol and tried to run the line that, somehow or other, under this package the rural sector would be disadvantaged. The relativities in fuel pricing between diesel and petrol will not change. What will change is that the excise component will come down, and when diesel is used for business purposes it will be cheaper by the amount of GST because that will be claimed back as a cost of production. People need to understand that. So, even with the petrol component, the rural sector will be better off. It will be saved significant costs.

When Senator Forshaw cited figures on diesel, he forgot to add on the wholesale sales tax. He forgot to add on the cascading impact of that through the system. The impact that will have on the cost of transport will be a significant saving to people in rural and remote areas.

The significant part about this is that, regardless of where you live—whether it be Geraldton or Bunbury in Western Australia—the further you live from the metropolitan centre the greater the real savings will be and the greater the benefits and the greater the capacity of those individuals within that industry not only to compete but to gain additional export market penetration; and that is where the Australian cake will grow. I find it very difficult to understand why people on the other side of this chamber cannot come to that conclusion.

I will run through a few of the points which I think are incredibly important with regard to the cost structure. The first is an issue I have pursued for many, many years: for the first time, as a result of this package, excise will no longer apply to rail. That, for my state of Western Australia, represents something like a $20 million to $25 million saving to Westrail and significant additional savings to the mining industry up in the northern parts of Western Australia. At this time, when commodity prices and exploration in the mining industry are falling at a very rapid rate, any savings in the cost of doing business will ensure that industries will be in a much better state to come through that and to be in a sound position as the world economies pick up again—and pick up they will. I believe that pick-up in demand is not that far away.

In addition to that, it means that our iron ore industry will be in a much more effective position to compete with countries such as Brazil which are now very efficient and credible competitors in the iron ore stakes. One of the reasons we need to get the cost of doing business down is so we can reinvigorate exploration. The figures for exploration in Western Australia from June 1997 to March 1999 have more than halved, from $211.6 million to $101.2 million. That is a very significant drop indeed and, unless we have a competitive economy, that free fall, I believe, will continue.

I would now like to move to the marine industry. All shipping will now be able to pass significant savings on to consumers. This means that tourist boats and the like will be able to compete at international standards. As it so happens, I live very close to a place called Jerdacuttup, which is very close to Esperance. The tourism industry there is starting to boom. The charter boat industry, which sails boats around the islands, is really starting to grow, and these arrangements will see the tourism component of the economy grow even faster.

Recently I was in Esperance, a town of approximately 13,000 people, and I counted 17 charter buses. You can see these places bursting with the opportunities that are coming forth, and in our state, which has basically been devoid of much tourism, tourism is starting to grow. One of the particular reasons for this is the enormous reduction in costs that we are bringing about through our tax reform package.

There is another aspect that I must mention about Esperance in terms of this debate, and it is one of the things that I will certainly continue to pursue in this place as far as getting equity is concerned; that is, the excise on light crude oil. It is an issue that we raised before the election and we made a commitment with respect to it. Unfortunately, it appears to have been a casualty of the deal with the Democrats, but it is an issue that we must deal with. I have a letter here from the President of the Shire of Esperance with regard to light crude oil. To put it in a nutshell, he writes about the impact of that decision on remote area towns which have no access whatsoever to any source of power other than through generation. On the situation with light crude he says that the cost of excise is an additional $3.5 million per annum, and it is not a cost that others in the community have to pay to get their power. We must deal with this issue when we come back here.

But I will continue what I have to say about the savings. The cost of carrying on trains stock, iron ore or any form of mineral—magnesite, for example, which is another production down in my area—will be reduced significantly. If that is combined, as I have already said, with the other parts of the tax package, particularly the removal of the wholesale sales tax, there will be a significant benefit to those particular industries. There is also a benefit with respect to the morale of those people. They are fully aware that they have to compete internationally. They are fully aware that, for years and years, government policy in this country has disadvantaged them or impeded their ability to perform at maximum efficiency. This gives them a light at the end of the tunnel. It gives so many people a light at the end of the tunnel.

People who come in here and talk about how this package is going to disadvantage people in rural and remote areas have not done their sums; they cannot add up. The reality is that the cost savings are just so great and the benefits that will flow through so beneficial that they just cannot wait until that magical day when this comes to fruition and they get the benefits from it. I see Senator Mackay smiling. Let me tell Senator Mackay that those who live in rural Tasmania will benefit just the same. So will those boats travelling between Tasmania and the mainland, and let us not forget that.

There is something in this package for everyone, even Tasmanians. I think that is very important. It is not a state package, even though my state is a significant beneficiary in the reduction in the cost of exports. I have already mentioned the $4.5 billion. It is not difficult to work out that the cost of doing business in Western Australia will fall by very close to, if not over, $2 billion. But it will fall in all the other states. It will fall according to their production patterns and what they do in those particular states. It will also be very beneficial, I believe, to the further development of light manufacturing industry in this country, and we will continue to see that grow.

I think that this package in total—even though there are changes to the original package as far as diesel is concerned—will bring enormous rewards and benefits to those people whom I am lucky enough and privileged enough to represent in this place.