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Thursday, 2 June 2011
Page: 5742


Mr IAN MACFARLANE (Groom) (12:21): I rise today to speak on the Taxation of Alternative Fuels Legislation Amendment Bill 2011, the Excise Tariff Amendment (Taxation of Alternative Fuels) Bill 2011, the Customs Tariff Amendment (Taxation of Alternative Fuels) Bill 2011 and the Energy Grants (Cleaner Fuels) Scheme Amendment Bill 2011. What we are seeing from the Gillard government with this set of bills is another attack on the cost of living of all Australian families. The first three bills deal with the taxation of gaseous fuels for motor vehicles. They will apply a tax to LNG, CNG and LPG. They will apply a tax to mum's taxi. They will apply a tax to the taxi fleet. They will apply a tax to the public transport systems, particularly those of cities such as Sydney, Perth and Brisbane, whose buses use compressed natural gas not only to lower emissions but also to lower pollution. These buses burn cleaner and provide Australia with an opportunity to use some of the overwhelmingly ample resources that we have in natural gas.

Australia is a very lucky country. We are self-sufficient in energy. We are, in fact, one of the few OECD countries that export energy. That energy comes from a number of sources. It comes from coal, and we are the biggest exporter in the world both of coking coal for the manufacture of steel and of steaming coal for the production of electricity. That energy comes also from LNG, liquefied natural gas, of which similarly we are a very significant exporter. We have a supply of gas in Australia that will probably last a couple of hundred years, at a bare minimum, based on current reserves, and it makes sense to use that resource here in Australia in transportation fuels, which is the one area in which we are deficient. We import almost 50 per cent of the petrol, diesel and crude oil that we use in our transport fleet. Finally, the energy comes from liquid petroleum gas, LPG, of which we are also net exporters, and while many of us in this place know LPG as the thing that runs our barbecues and, in some cases, our hot water systems and stoves, LPG's main use is in transportation fuels. It makes no sense to apply a tax on those fuels.

On top of the increases to electricity prices and the cost-of-living expenses that will occur as a result of the carbon tax, families and businesses now face further pressure on the cost of fuel because of the Gillard government's policies. Unfortunately it is no surprise, bearing in mind that this government is so out of touch, that the most critical component of the family budget—that is, fuel for the motor vehicle—is now in the sights of the Gillard government. As we see from these bills, the intention of the government is to raise the cost of those fuels to those families using LPG in their vehicles by 20 per cent. This is not a small increase; this is a major hit on the family budget, an attack by the Gillard government on the purse strings of everyday Australian families already struggling under massive increases in electricity prices, gas prices, water charges and other living costs. These increases are soon to be made even more massive by an ill-conceived carbon tax, which will add a further cost, including in the area of transport, to all Australians.

Applying an excise of 12½c per litre on LPG makes no sense at all. This government runs a program to encourage families through a financial incentive to convert their vehicles to LPG by offsetting some of the cost of conversion, yet with all that encouragement the government is really just setting a honey trap: 'We'll get these vehicles onto LPG and then we'll increase the cost of LPG by 20 per cent. We'll increase the tax to make sure that these families can no longer cope with the pressures of the cost of living.'

Currently 283,000 vehicles have been converted to LPG under this government scheme. Every single one of those vehicles is owned by a family. This scheme is not open to commercial vehicles, not open to fleet vehicles and not open to business vehicles; it is only open to family owned vehicles. There are 283,000 vehicles that are owned by 283,000 families who will wake up, if these first three bills pass, to higher fuel costs. There is absolutely no justification for this. Why is the government doing it? It needs the money. Why does it need the money? It wastes money. This is an old-style spend, waste and tax government of the kind that we see from the Labor Party every time they sit on that side of the Speaker. Every time a Labor government holds the Treasury benches, it spends and wastes money until it has no option but to increase the taxes on the people of Australia. This tax on Australian families is intolerable, and the opposition, hopefully with the support of the Independents, will do everything we can to defeat these first three bills. Along with those 283,000 vehicles, there are another 400,000-plus vehicles that have already been converted and a majority of those vehicles would be owned by families. Some of these families would have bought them second-hand from a car yard in the expectation that they would be able to continue to use these vehicles to lower the cost of living, to lower the cost of taking their kids to school every morning—mum's taxi—and to lower the cost of running a family in Australia under a government that is so out of touch. Costs rise every day and soon with a carbon tax those costs will rise even more steeply.

What we see in these first three bills is a government desperate for money to fill the enormous black holes that it created by wasting money under the home insulation scheme—that was $2 billion up in smoke. Four times what it is going to get from this scheme has already been wasted and you wonder how the families of Australia feel about that. Of course, the wastage in that area was small compared to the wastage under the Building the Education Revolution scheme, where billions and billions of dollars were overspent. Again, that was many times the money that is going to be raised from this scheme.

When the people who sit on the opposite benches go back to their electorates what do they say when families ask them, 'Why are you putting up my fuel costs by 20 per cent?' I would be interested to hear the answer. Is it because they simply do not care? Is it because they are simply desperate? Is it because we know that they have gone from a cash surplus of $70 billion to a net debt of $107 billion? Is it because they have gone from a budget surplus of $20 billion to a budget deficit of $50 billion? Probably. I would like to give them the benefit of the doubt that they are not deliberately trying to destroy the family budget with this tax, but that it is actually because they are incompetent money managers and wasteful with spending. I would like to think that was the reason, but sometimes it is hard to accept that it is the only reason. It appears to me that it is more about this government being completely out of touch and completely lacking in compassion and understanding for the way in which families in Australia are currently struggling.

I note that the fourth of these bills, the Energy Grants (Cleaner Fuels) Scheme Amendment Bill 2011, is a bill which the coalition will support. It is a bill to extend the grants scheme to biodiesel and renewable diesel. As I said, in Australia we face a challenge in providing enough transport fuel. Logically, you would say that if you have an alternative fuel you would support it and not tax it. If you were awash with it you would not tax it. In the case of LPG we are awash with it, and I have covered that issue extensively. We are trying to build a biofuels industry in Australia. Along with the government, the coalition support the measures that have been taken, previously by the Howard government and continued by the Rudd and Gillard governments, to provide grants to the ethanol, biodiesel and renewable diesel industries to offset the excise which is applied to those fuels at the full rate of 38.143.

The Energy Grants (Cleaner Fuels) Scheme Amendment Bill is a worthy bill that the minister has brought to this House and it is one which the coalition will support because it maintains the grants for the biodiesel and renewable diesel industry. That is an industry that is doing it tough. That industry has faced unfair dumping competition from overseas supplies. I commend the minister for continuing what we started. He has not done anything more, but at least we should be grateful that he has not done anything less. With that certainty, at least through until 2020, I hope that the biodiesel industry, truly supported and protected from dumping actions by the anti-dumping legislation, will be able to resume some economic growth and help us supply the burgeoning demand for diesel fuel in Australia. We live in a region where diesel fuel is very much in demand. I am often asked by my constituents, particularly those constituents who drive diesel vehicles, why they have to pay more for diesel than they do for not only ULP but also higher octane petrol. The answer is quite simple: it is a case of demand. We live in the South-East Asian supply region where diesel is very much in demand not only for heavy equipment but also for transport fuels.

We can look at the trend in the motor industry in Australia. Much of the romance goes to the hybrid vehicles, and we are producing a hybrid vehicle here in Australia, the Camry, which is based on Toyota's Prius technology. There are a number of other vehicles around now that run on hybrid technology. If you want to buy a Porsche you can buy one that uses hybrid technology. But if you want to drive the most efficient vehicle in the world, as measured by litres per 100 kilometres—or, as my dad used to say, miles per gallon—you will drive a diesel vehicle. I think the turbocharged Volkswagen Golf holds the record at the moment. It is more efficient than a Prius and it runs on diesel. So if the opportunity is there for Australia to increase its self-sufficiency in that most efficient of fuels—diesel—through the production of renewable diesel or biodiesel then we need to ensure that those incentives continue. That is what this fourth bill does—it provides the incentive for diesel production.

We then move to compressed natural gas. It is a cumbersome fuel but one which has a place in the Australian urban environment, particularly for delivery vehicles or buses that return to a depot that can carry this bulky fuel. It is not liquefied; it is compressed. It takes up a lot of room and the tanks weigh a lot, but it has a very significant role to play in public transport. This is a fuel that we are trying to get into our bus fleets. Perth has about 300, Sydney has around the same number and growing, and Brisbane has also made an investment in these sorts of buses. These are buses which do not leave the particulates in the air, they burn cleaner, they provide an opportunity to reduce emissions and they will increase the efficient transport of people through the public transport system. So, what does this government do to those buses? It taxes them. And what is the result of that tax? Those buses will no longer be bought because the economics of running a compressed-natural-gas bus simply will not be there. So we will stop using a fuel that we are abundant in, so abundant that we export tens of millions of tonnes, and perhaps soon 50 million tonnes, of natural gas per year, in the form of LNG. So, instead of using a fuel that we are abundant in, this government taxes it to the point where it is not economical to use those buses, so the buses will go back to being diesel. Then there are all the issues associated with that, in terms of the balance of payments.

But those 900 buses already in use would face a fuel price increase of at least 20 per cent, in the case of CNG. That means that bus fares go up. Here we have a government that claims it is all about reducing emissions and introducing efficiencies and all about trying to get people to use public transport, but they are so desperate for money that they have these bills in the House.

So the mums and dads, and the kids going to school, who are already struggling with a household budget that is tight, with cost-of-living pressures growing every day for families, now have to find extra money for bus fares as well. When that family has to then use the other form of public transport, taxis, to perhaps take their elderly parents to the doctor or to attend an occasion somewhere without the family car, they are going to get hit again. This government reaches out to every part of sensible living and taxes it. We have a tax on family cars, a tax on compressed-natural-gas buses and we have also got a tax on taxis. The 19,000 taxis in Australia are going to see a 20 per cent increase in their fuel cost. And guess what? That means higher taxi fares in Australia, because the Gillard government cannot manage money. They are so desperate to get money into their coffers that they will literally tax anything that moves.

It does not end there. In Tasmania we have recently seen a very responsible decision taken there to put in place an LNG plant, not to export liquefied natural gas to our northern neighbours, but to run trucks. Trucks are big users of diesel. Diesel is expensive and in Tasmania it all has to be shipped there, so it made sense to power the logging fleet with LNG. LNG is already used on the mainland in trucks. People like Goulburn dairy co-op are using it in their milk trucks, Wesfarmers have been using it in their transport fleet out of Perth and a number of other installations have been mooted. This tax will kill that dead. Another opportunity to use our abundant natural gas to lower emissions, lower running costs and lower particulates is shot dead by this government, which is desperate for money. So the transport LNG industry will fold overnight, as well.

If it stopped there I guess we would say 'Whew, how much damage can you do in a day,' but there is more, because this tax will be administered in a way that means small businesses selling LPG—it might be for my barbecue, or the member for Bass's hot water system or it might be to a large commercial business user—have to acquit that in a whole new set of regulations and red tape, because LPG will now have a tax on it. So it will mean more work and more red tape for small business. It was small business people to whom the previous leader of Labor in opposition, Kim Beazley, was referring when he said: 'They are not the natural friend of small business.' But they do not have to show small business every day that when they wake up in the morning they will have a tax applied to them—to their motor vehicles if they are running an LPG vehicle—and also give them a heap of red tape to deal with.

This is bad legislation. It is not about improving inefficiencies in Australia. It is not about ensuring Australia is a better pace to live. It is legislation about taxing a fuel source in which we are abundant. It is legislation about taxing a fuel source that is efficient. It is legislation about taxing a fuel source that is a lower emitter. It is legislation about taxing the livelihoods of Australians. And it is legislation about increasing the cost-of-living pressures on families.

The opposition will oppose these first three bills. I flagged that we will move an amendment to the fourth bill. When I watched the minister presenting these bills a few weeks ago I could tell by the sly smile on his face that there was something in these bills that I had to go and look for. I looked hard and sought the advice of the library and they looked hard. And then we found it: the suicide clause. If each of these bills is not passed, none of them will receive royal assent. Here is a minister who is prepared to say to the biodiesel industry: 'If the opposition knocks over these bad bills on LPG, we are going to tax you at 38.143 cents.' This is not a minister who cares about the energy industry. This is a minister who is desperate for money.

Our amendment will break the nexus between these bills. It will ensure that if the first three bills are defeated, which they should be, and the fourth bill is passed, which it should be, then we do not have to rely on all four bills being passed to get royal assent. Our amendment will make the fourth bill, the Energy Grants (Cleaner Fuels) Scheme Amendment Bill 2011, effective from 1 July 2011. There should be no other way. You cannot leave the biodiesel and renewable diesel industries swinging in the breeze while the minister who sits opposite plays games with their livelihood. As I said, the biodiesel industry has been through enough already. We need to give that industry certainty, and it is the coalition, as usual, that has to do that.

I will be interested to listen to the contributions from the other side. I will be interested to hear how they justify increasing the cost of living for families. I will be interested to see how they can be so oblivious to the circumstances we currently find ourselves in, which is the reason the Howard government never proceeded with this.

Mr Champion: It's their plan.

Mr IAN MACFARLANE: He says, 'It's their plan.' We never presented legislation in this House when families were in financial crisis, because we knew, we were in touch and we understood. We believed in making sure that there was no pressure put on families by a tax. This government is mindless and careless to that fact. It knows families, or it should know families—

Mr Champion interjecting

Mr Lyons interjecting

Mr IAN MACFARLANE: Perhaps the interjecting members opposite do not care or perhaps they do not know—perhaps both—but we know that families are under pressure now, just as we knew when we were in government, which is why we never proceeded with these bills. Those members are now saying to their electorates, 'We don't care that we're going to put your price of LPG up by 20 per cent.' I say to them: you had better hope we save you by defeating these bills.