Senator McGAURAN (3:29 PM) —I join this debate by referring back to Senator Hill's answer in the Senate in question time; that is, what is your policy going to be? What is the proposition that you are putting to the parliament? You say you are going to reduce the excise: by how much—1c or 5c? It would have to be 5c at least, and you are talking about billions of dollars. With your record of expenditure, what will be cut? Where will that money be spent? On extra education and services? I heard Senator Mackay tell us that she would dip into the surplus—

Senator Mackay —It is $13 billion.

Senator McGAURAN —the $13 billion surplus. Senator, you should speak to your shadow Treasurer about that. He is the man who wants a bigger surplus. He wants more than $13 billion. He will not let you dip into that, so you have got no policy coherence at all.

In relation to the other question you put about whether we would support John Howard's commitments: of course the speakers on this side do, as supported by the ACCC. The ACCC found in its inquiry that for the quarter from the week ending 30 June to the week ending 29 September the actual rise in petrol prices was below the level that was expected, taking into account the main underlying factors that influence petrol prices. The report stated:

That is from page 2 of the ACCC report. So the ACCC report confirms the government's position that the petrol prices have been largely driven by international oil prices. So this is not unique to Australia, as you are attempting to suggest in the debate; this is a worldwide problem. We have seen on our news services the blockades that have occurred in France and in England. We did not get the same sort of reaction here in Australia because, quite frankly, the governments overseas have a greater taxing effect on the pump price of petrol than Australia does. In England it is up to 75 per cent of the pump price. In other European countries it is up to 85 per cent of the pump price. Australia actually has one of the lowest taxes on pump price oil in the world. So in this country we simply did not get the same reaction as occurred worldwide.

Senator Mackay suggests that the government are entirely in denial mode. We are not unaware of the volatility of petrol politics, particularly in the rural and regional areas. We know only too well how the rural and regional areas—more than the city areas—rely on fuel for not only their farm businesses and small businesses but also their family households in particular. In relation to rural and regional farm businesses, appropriate tax deductions were brought in with the new tax system—for example, the 100 per cent diesel fuel rebate. Over $2.2 billion, in fact, has been cut from the fuel excise with the new tax system—6.7c per litre was reduced from excise after 1 July. There is a 100 per cent rebate on diesel fuel. There is also the Fuel Sales Grants Scheme, providing 1c or 2c per litre to retailers to reduce the gap between the city—

Senator Mackay —It's not being passed on. Where is it?

Senator McGAURAN —It is operating. Over $500 million over four years has been outlaid. All in all, over $2 billion since 1 July has been taken out of the tax system. So we are not insensitive to the rural and regional areas' reliance on fuel. We know the volatility of politics, but we put it to you that this is a worldwide phenomenon, totally based on the price of a barrel of oil, which is up to about $US60, a jump from February 1999 of $US11. So you can see the enormous cascading effect on the pump price. (Time expired)