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Wednesday, 29 May 2002
Page: 2575


Dr EMERSON (10:56 AM) —The Diesel Fuel Rebate Scheme Amendment Bill 2002 seeks to amend the Customs Act and the Excise Act to extend the Diesel Fuel Rebate Scheme to operators of retail and hospitality businesses in remote areas which use diesel fuel to generate electricity for their own use. Businesses that will benefit from the rebate include caravan parks, tourist resorts and roadhouses. The government made an election commitment to this initiative and, as such, we will not be opposing this bill. However, we will be moving a second reading amendment to which I will refer a little later.

I want to refer to the environmental implications of this legislation. Is the government giving up on developing renewable remote power generation alternatives such as photovoltaic arrays, wind turbines, and hydro units? It is appropriate that I ask that question because there has been a deathly silence on the part of the government about any activity that might be going on in developing these alternative energy sources for remote areas. That deathly silence about activity indicates to us and to the community at large that there is no such activity going on at all. If that continues for much longer, the government will have broken yet again another solemn promise because, in the context of introducing the GST in a deal with the Democrats that I described at the time as the dirty sleazy diesel deal done dirt cheap, they said they would be looking to develop alternative energy in remote areas. That was a requirement of the Democrats but of course the Democrats have been lily-livered in terms of their insistence that the government go ahead with this.

We on the Labor side of politics will be applying maximum pressure on the government so that we can do everything in our power to persuade them to meet this particular promise that they made. It was a grubby deal with the Democrats to get the GST through the Senate. In that grubby deal, that dirty sleazy diesel deal done dirt cheap, the Howard-Costello-Anderson government introduced the Diesel and Alternative Fuels Grants Scheme and the Diesel Fuel Rebate Scheme.

The Democrats, in seeking to restore some sort of credibility in terms of their environmental credentials after this disastrous marriage of convenience over the GST, did push the government to include sunset clauses into each of these bills. The sunset date was set for 30 June 2002, which is imminent—just a little over a month away—but there has been no activity on this front at all. The government has in fact done nothing about developing an alternative to these two schemes. As a consequence, Labor reluctantly agreed to an amendment to the schemes to extend the sunset date out to 30 June 2003. The Deputy Prime Minister's alternative to these two schemes is an Energy Grants Credits Scheme, but so far neither we nor anybody else have seen what this Energy Grants Credits Scheme is going to look like. I know that everyone in the transport industry is eagerly awaiting the release of information about this scheme.

The Deputy Prime Minister and Minister for Transport and Regional Services was so keen to control the Energy Grants Credits Scheme that he wrote to the Prime Minister urging that the Department of Transport and Regional Services be nominated as the lead agency for developing this scheme, and then just a few days later as the Acting Prime Minister he wrote back to himself and agreed with his request. We can just see the correspondence: `Dear Prime Minister, I would really like my department to have carriage of the development of the Energy Grants Credits Scheme,' and then he goes over to become Acting Prime Minister and says, `Dear John—Dear Me—I agree.'


Mr Zahra —Sir Humphrey would be proud.


Dr EMERSON —Sir Humphrey would be proud, as the member for McMillan has said. So the minister seemed pretty keen to have carriage of the development of this scheme. But what has happened as a result of that keenness? Absolutely nothing. It seems to have dropped off the agenda. You would think he would be doing something about it, but he has not. The road transport industry need to know the nature of the new energy credits scheme because it is likely to have a direct impact on operating costs, on decisions about capital investment, on business expansion, markets and technological choices for their businesses and for their families. So we on the Labor side trust that the government will give these interested Australians the opportunity to discuss and assess fully the proposed energy grants scheme prior to the sunset of the Diesel and Alternative Fuels Grants Scheme and the Diesel Fuel Rebate Scheme. This brings me to the second reading amendment. While we are not opposing the bill, we are moving a second reading amendment in the following terms:

That all words after “That” be omitted with a view to substituting the following words:

“whilst not declining to give the bill a second reading, the House condemns the Government for:

(1) failing to deliver on their commitment to develop an Energy Grants (Credits) Scheme to replace both the Diesel and Alternative Fuel Grants Scheme and the Diesel Fuel Rebate Scheme;

(2) failing to prioritise support for the accelerated uptake of renewable electricity generation as a viable alternative to diesel rather than extend the diesel rebate that would lead to long term greenhouse gas reductions; and

(3) conducting the Fuel Taxation Inquiry only for cynical and expensive election purposes with no intention of a genuine review of fuel taxation issues”.

My colleague the shadow minister for the environment will have a lot more to say about the greenhouse implications of this legislation and about the government's failure to date to develop the Energy Grants Credits Scheme, so I will not dwell too much on that other than to say that the report that was referred to in the third point in the second reading amendment—that is, the fuel taxation inquiry—is the Trebeck report and that the Trebeck report was released on the night of the budget so that it could be smothered. That was the purpose of releasing it at that time. That report outlined design principles for the Energy Grants Credits Scheme, including the introduction of a business fuel credits scheme for all businesses, not just those that are favourite of the day of the coalition government. It recommended that the business fuel credits scheme should replace the Diesel and Alternative Fuels Grants Scheme and the Diesel Fuel Rebate Scheme and it recommended mechanisms to develop the environmental component of the proposed scheme.

The Trebeck report, therefore, provides the framework for this government to implement its commitments to a fuel grants credits scheme. But what has been the outcome of the government's consideration of that report and of the recommendations? The answer: absolutely nil, deathly silence. It is no coincidence whatsoever that the government released the Trebeck report on the night of the budget. It has ignored completely that report.

Let us just look at some of the costs involved in the government ignoring that report. The government spent almost $4 million of taxpayers' money for an inquiry that it has completely ignored. So it appears that there is almost $4 million down the drain for a start. It is also important to note that the government invited Australian organisations, businesses and individuals to prepare detailed and costly submissions to the inquiry. That invitation was accepted by almost 300 organisations, businesses and individuals, who made 341 submissions. That is an enormous amount of effort on the part of businesses in the wider community, an effort that appears to have gone to waste completely, because the government has apparently completely ignored that report.

We have to ask then why the government initiated this particular report into fuel taxation in the first instance. I think I can answer that quite clearly: it was in response to Labor initiating an inquiry into fuel taxation and the petrol, diesel and other fuels industry. We did that long before the government did. At the time, the government said, `Why would you have another inquiry, because there have been more than 30 Senate inquiries and other inquiries into the fuel industry in Australia, and an inquiry initiated by Labor is totally unnecessary.' We did not find it unnecessary at all.

We travelled Australia as a petrol inquiry and sought submissions not only from business organisations but also from the grassroots, from people who were invited to come along to our inquiries and tell their stories about the impact upon them of higher fuel prices—and they did. They came in droves. We had more than 400 submissions, and we had hundreds of witnesses coming along and giving evidence. They were not just giving evidence about petrol. As soon as you got out of the major cities, one of the burning issues in the bush, so to speak, was the high cost of diesel and whether the diesel schemes that were operating were, in fact, passing on the benefits of any subsidies or rebates to the users of diesel. Many opinions and concerns were expressed to us. As a result of that inquiry, we produced a very comprehensive report. I will go to that in a moment.

Meanwhile, back at the ranch, the government was criticising Labor for taking on the task of conducting an inquiry, saying that it was not necessary. But, of course, things changed very early last year when the government of Western Australia fell, to be replaced by a Labor government, and when the Beattie Labor government was returned with a massively increased majority. It was evident that fuel costs was a very important issue in both of those election results. The coalition changed its tune and said that it was just possible that a fuel tax inquiry might be warranted. In the early part of last year, the government said, `We, too, are going to have a fuel tax inquiry.'

We made a commitment at the time that the outcome of the fuel inquiry conducted by Labor would be released in the form of a report before the election. The government, on the other hand, refused to make any such commitment. Now we know why they refused to make that commitment: they never intended to implement any of the recommendations of the report. During the Aston by-election, the government belatedly—it was around four months later—released the terms of reference for that report, which became the Trebeck report. Moving at a snail's pace, they announced an inquiry in the early part of the year and in the course of the Aston by-election said, `We are now going to announce the terms of reference of the report.' They put everything in the slow lane so that they did not have to release the outcome of that inquiry until after the election.

Contrast that with Labor's response and the report that we put together. During the federal election campaign, Kim Beazley released `Kim Beazley's plan for fuel', a comprehensive plan that built on a report that ran to 90 pages. That comprehensive plan for fuel addressed all of the major issues in relation to fuel, including fuel taxation in Australia. The report found that in the industry—I am referring to both petrol and diesel—the agents of competition were small independent operators. The emergence of small independent operators has been a powerful force in keeping fuel prices down. I am, of course, referring here to the third point in the second reading amendment. Labor asked: what is required to be done to protect the interests of small independent operators against predatory pricing by the oil majors? The answer was that we would make a number of changes to the Trade Practices Act and to the way that the act was implemented.

We announced those changes in this plan. The plan included bringing back the petrol prices watchdog, the ACCC. The ACCC had been removed as the petrol prices watchdog and also the diesel fuel prices watchdog by this government. It removed it in its first term. Also, the present government in its first term moved to abolish or repeal the franchise act and the sites act, both of which, though ineffectual—I am quite happy to concede that point—by design, were there to protect small independent operators against predatory pricing by the oil majors. What was the response of the government to that? Rather than to protect small independent operators that are the agents of competition in both the petrol and the diesel fuel markets, it tried to favour the large oil majors and, in favouring them, would have allowed them to engage in predatory pricing. Labor thought that that was a particularly bad idea and, as a result, we opposed those changes in the Senate. Fortunately, on this occasion, the Democrats joined with us and those changes did not get through. But the one change that was able to be implemented, because it did not require legislation, was the removal of the ACCC overseeing both petrol and diesel prices. Labor announced at the last election that we would bring back the prices watchdog.

We also announced that we would strengthen the Trade Practices Act to help the small independents compete on a level playing field to combat predatory pricing by the oil majors. We announced too that Labor would negotiate a strong and enforceable oil code to give security to small businesses operating service stations. We said that we would introduce a national transparent wholesale pricing system, which is called terminal gate pricing, in consultation with the states and the industry and that we would establish an indicative price system in service stations in up to 150 locations around Australia so that regional motorists could make informed judgments about petrol retail margins.

I can advise the House that the initiatives in Labor's plan for fuel were very warmly welcomed by the small independent operators. They saw, for the first time in several years, a chance to survive against the behaviour of the oil majors. It was very instructive to learn of the reaction of the government to Labor's plan for lower fuel prices. The government said, `If you go ahead with this scheme, it will force petrol prices up.' Here we were introducing more competition into the market, protecting the agents of competition—that is, the small independent operators—against predatory pricing by the oil majors, and the Treasurer of this country said, `If you try to look after the interests of the small independent operators—the agents of competition in the market—against the behaviour of the oil majors, that will force prices up.' It is yet another example of the Orwellian language used by this government: that if we try to protect those agents of competition the result will be higher fuel prices. So the government opposed strongly the measures that we announced.

The government said that it would review the Trade Practices Act, and that review is under way now. It has taken six months to get it under way, but the terms of reference are tilted in favour of big business more generally in that they seek to nobble or restrain the activities of Professor Allan Fels, the Chairman of the ACCC. So the outlook is not very encouraging for the small independent operators at all.

On 31 March this year, the shadow Assistant Treasurer, the member for Werriwa, released a five-point plan encompassing five changes to the petrol industry that we consider very important in maintaining a downward pressure on prices. I will take the House through the plan very briefly. The points are as follows:

(1) If the oil companies do not agree to end this practice [of spiking their petrol prices before public holidays], Labor will introduce specific penalties and sanctions for price exploitation during holiday periods.

(2) Establishment of a warning “yellow card” system, so that the ACCC keeps a register of bona fide complaints of misuse of market power within the petrol industry. This information would then be used in assessing penalties for proven breaches of the Trade Practices Act. If these measures do not alter market behaviour, criminal penalties and larger pecuniary penalties will be introduced.

(3) Establishment of an “effects test” under the Trade Practices Act, so that firms will be prosecuted for abuse of market power when their actions have the effect or likely effect of substantially lessening competition in a relevant market. (Under the current laws, the abuse must be proved to be intentional, rather than having a market effect.)

That is our policy: to introduce an effects test. The fourth and fifth points are as follows:

(4) Reversal of the onus of proof under the Trade Practices Act. In cases where market conduct has substantially lessened competition, the onus of proof under Section 46 [of the Trade Practices Act] would shift from the complainant to the alleged offender.

(5) The introduction of genuine wholesale competition, allowing service stations to shop around for the best price at the terminal gate. In particular, independent service stations should have the same access to discounted wholesale petrol as the major brands.

That is the five-point plan which has been released by the shadow Assistant Treasurer and which builds on Labor's plan for fuel that was announced at the last election. I now move Labor's second reading amendment:

That all words after “That” be omitted with a view to substituting the following words:

“whilst not declining to give the bill a second reading, the House condemns the Government for:

(1) failing to deliver on their commitment to develop an Energy Grants (Credits) Scheme to replace both the Diesel and Alternative Fuel Grants Scheme and the Diesel Fuel Rebate Scheme;

(2) failing to prioritise support for the accelerated uptake of renewable electricity generation as a viable alternative to diesel rather than extend the diesel rebate that would lead to long term greenhouse gas reductions; and

(3) conducting the Fuel Taxation Inquiry only for cynical and expensive election purposes with no intention of a genuine review of fuel taxation issues”.

Contrast Labor's considered work, its hard work and its policy development on fuel with the government's complete lack of interest in this. The government commissions a $4 million report, the Trebeck report. It releases the Trebeck report on budget night, and it ignores the Trebeck report completely; it ignores the submissions of hundreds of organisations and individuals around this country. Subsequent to the election, the new Minister for Industry, Tourism and Resources, the member for Groom, said that he would do something about fuel pricing and the market behaviour of the oil majors.


Mr Zahra —That's what Peter McGauran said, too.


Dr EMERSON —Absolutely—Peter Mc-Gauran said it, John Moore said it after 1996 when he was the industry minister and the Treasurer has said it on numerous occasions. But the only initiatives that they have sought to take are initiatives that would weaken competition and advantage the oil majors against the small independent operators. It is clear from our discussions with those small independent operators that if the government had its way they would be in desperate trouble. They are already in enough difficulty as a result of the behaviour of the oil majors, but if the government legitimised that behaviour and made it even more acceptable in legislative terms it would be the end of the small independent sector in Australia and therefore the end of competition.

The new minister obviously had representations from the oil majors and from the small independents, and he said, `I've got a good idea: we'll negotiate an oil code.' This is the very oil code that the government, in its first term, said that it would negotiate. When it could not get agreement, it abandoned the oil code. It said that it would not seek to repeal the sites act or the franchise act until there was a strong, binding oil code, but it reneged on that commitment and tried to get the repeal of those two pieces of legislation through the Senate. As I said earlier, the attempted repeal of that legislation was blocked in the Senate.

The government's track record on fuel is an appalling one. The new minister is starting from scratch. He says, `We'll now get this oil code in.' There is no real sign of progress on that but at the same time, true to form for the coalition government, he says, `What we're going to do is repeal the sites act and the franchise act.' It comes around and it goes around: for six years the government has been flopping around on policy in relation to fuel and coming up with precious little.

I indicate on behalf of Labor that we will not be reintroducing the indexation of fuel. I note that the Trebeck report completely leaves that open and in fact recommends it—as did the terms of reference for the Trebeck report, which said that fuel taxes should not and would not be allowed to rise in real terms. That explicitly opened the door for the reintroduction of indexation. The Trebeck report recommended that and we now are in a situation where it is an open possibility that the government could do that, but it would not be a possibility under a Labor government.

I close by indicating that Labor will in fact support this bill because it does give effect to an election promise. We on this side of politics consider that it is important to honour election commitments. The government gave one, and we are going to support the bill as a result of that. But equally we are concerned about the government's inactivity in developing the credit scheme, because this is very important for the environment. It is important given that the date in the sunset clause for the two existing pieces of legislation has been moved from 30 June 2002 to 30 June 2003. It is very important that the government gets active on this front and creates some certainty for business under which business might be able to plan its future investments. We call on the government to get serious about alternative energy as a source of electricity generation in remote areas, because it has not been. Instead it did a dirty, sleazy diesel deal and it was done dirt-cheap with the Democrats, who then said, `Well, that's fine. We'll have an alternative scheme somewhere down the track,' and there is no sign of that more environmentally friendly scheme. It is for that reason that we have moved the second reading amendment, because we are sick and tired of the government's inactivity on these important issues.


The DEPUTY SPEAKER (Hon. I.R. Causley)—Is the amendment seconded?


Mr Zahra —Yes, I second the amendment.