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Tuesday, 14 June 2011
Page: 5913


Mr BILLSON (Dunkley) (19:46): The bills before the chamber tonight deal with planned changes to taxation arrangements through excise tariffs on alternative fuels. I will pick up on the last bill, the Energy Grants (Cleaner Fuels) Scheme Amendment Bill 2011, to carry forward some of the contribution from the member for Kennedy. The opposition supports the Energy Grants (Cleaner Fuels) Scheme Amendment Bill. This bill is an important measure in that it effectively grants back to Australian producers the taxes that would otherwise be levied on ethanol. This is an important measure, one which talks about biodiesel and renewable diesel producers and importers. I stand corrected on my misspeak on ethanol. The bill basically says that, where people are impacted by tax payable that is imposed on those fuels, they are rebated. It becomes very important because, without this measure, further development of that as an alternative transport fuel could well be wiped out by overseas production coming in and taking over all the increased demand for biodiesel and the like.

The bill before us seeks to extend the current grants scheme which sunsets on 30 June 2011. Unless that bill is passed, producers of fuels eligible under the Energy Grants (Cleaner Fuels) Scheme would be exposed to a full 38.143c per litre fuel tax that is payable on conventional diesel. It would have adverse environmental and commercial impacts—and that is quite self-evident. The coalition is keen to see that grants program continue.

What we are less thrilled about are the other bills. They seek to impose new excises on LPG and CNG. These arrangements are quite troubling for the opposition, and they are troubling for a number of reasons. One is that, at a time of cost-of-living pressures on Australian families, the last thing they need is increased fuel costs. They are already staring at the implications of the great big carbon tax that will make transport fuels more expensive. What is not needed is to further increase those costs on Australian families and particularly on Australian small businesses.

It might come as a surprise to you, Madam Deputy Speaker, that it is now over 12 years ago that I first spoke in this chamber about the virtues of LPG. I was trying to highlight to the parliament and to the Australian public that we have here an abundant, cleaner transport fuel that is available now and offering not only cost savings for those that utilise it but also gains in terms of Australia's energy security, emissions and air quality. It was a fuel opportunity staring us in the face that ran into quite a number of obstacles over many years. It was over a decade ago that I stood in this chamber and waved around an LPG conversion unit. Not only did it come as quite a shock to the Speaker at the time that I would bring such a device into the chamber; it also came as a shock to the LPG industry. That converter was caked full of what looked like vegemite. It was actually phylates or impurities in the fuel system, and they were causing poor fuel performance and difficulty in starting. They were effectively undermining the benefits of LPG. At that time there was no fuel standard for LPG. Australian motorists were being dished up LPG that could have contained any mixture of propane and butane—a soup of different gaseous fuels that were expected to run in modern machinery. To cope with that, we had some of the most robust converter technology you could find anywhere in the world.

I once said that a car could run on soup, because of the vast variety of fuel compositions with which Australian technology was being asked to function. What was needed was to take LPG seriously, and so over a dozen years ago my campaign started to see fuel quality standards introduced for LPG. Fuel quality standards gave the LPG technology development and conversion industry some consistent fuel against which they could develop improved technology to even further enhance the efficiency, the emissions benefits and also the air quality advantages of LPG. One of the things that I am pleased to say that the Howard government did was to support the conversion of over a quarter of million vehicles through grants programs encouraging people to take up LPG. It also saw LPG being recognised for its strengths as an alternative fuel, one in abundance in Australia and that had advantages which were not purely about cost, although the cost was important. I come back to cost because so many of the early adopters of LPG technology were enchanted by the costs of LPG. I remember that some years ago when petrol was around 52c to 53c a litre—and this is some time ago—you would get LPG in the teen cents. This was very attractive, particularly for lower income people and retirees wanting to be very careful about their day-to-day budget and being prepared to invest in a conversion to see their longer term cost of living eased somewhat by being able to access LPG.

At that time LPG was seen as a cheap waste product, often distilled out of other forms of fuel production. It has taken some time for the Australian public and the industry to get on the front foot and say this is really now an attractive, cleaner, abundantly available fuel that should be in a greater proportion of our transport fleet. In fact, our great state of Victoria accounts for about half of all vehicles operating on LPG. There are some 18,000 taxicabs running on LPG. I use that as a segue into why I am so keen to join with the opposition in opposing the first of the three bills that would effectively push up the cost of LPG and not only the cost of living for Australian households using LPG but also the cost for the tens of thousands of small businesses that are utilising LPG as a transport fuel. There are 18,000 taxicabs. You would see the cost of transport increase. Many tradespersons' vehicles and delivery vans operate right across the country on LPG.

You would start to see transport costs rise for small businesses, tradespeople and even major fleets—Sensis, RACV, NRMA, Repco, Fleet SA, the Australian Federal Police, just to name a few. All would have their operating costs increased and for what purpose? Increased because this government cannot balance its books. This is nothing more than a grubby tax grab increasing revenue to the Commonwealth at a time when the Prime Minister and the Labor government just cannot help themselves. They just cannot help themselves: they have to keep spending, spending and spending and looking for new ways to tax the Australian public and then try to concoct some kind of policy argument after the event to mask what is ultimately a simple tax grab.

We have a problem here in the parliament in that we have a policy that runs against our ambitions to improve our fuel security, runs against our ambitions to relieve our emissions and runs against our ambitions to improve air quality. I have seen the Minister for Infrastructure and Transport, Mr Albanese, talking about Euro 6 and 7 diesel standards or even 5 and 6 being introduced to improve the air quality in our cities and here we have an answer to all of those challenges staring us in the face. Rather than encourage the uptake of it, the government wants to make it more expensive and it makes it more expensive at a time when this is the least opportune occasion to do it.

There is a $3½ billion LPG industry out there anticipating significant growth opportunities into the future, largely powered by the coalition's 2006 initiative. There are 10,000 people operating in that sector. I pay tribute to all of those people in the LPG industry including dear friends who go back over a dozen years—Tammy Claster and the like—who I have worked with side by side as we have together run this argument over many years. I pay tribute to Jim Richards, who is retiring. Many of you in this chamber would realise he effectively ran the Australian Alternative Automotive Fuel Registration Board, the certification body to make sure conversions were being undertaken, issuing plates to people converting their vehicles, to meet the highest possible standards in Australia. While all that good work is going on, we have a government that actually wants to tax the fuel, make it more expensive and make it less attractive at precisely the time when we should be encouraging its uptake. Might I say, boy haven't things changed.

I have seen the member for Wills, perhaps sensing a freedom in his career trajectory, having a lot to say about Labor policy on a range of things whether it be population, live animal exports or issues around refugees. He did have a lot to say many years ago about LPG but that seems to be have drained away. At that time he was attacking the coalition for trying to support the LPG industry. You know what the attack was, Madam Deputy Speaker? This was the attack when the coalition stopped the automatic six-monthly indexation of petrol taxes. What we used to have in this country every six months was fuel excise creep up. It followed inflation, introduced by Paul Keating as a cunning plan to ratchet up revenues without having to come through this parliament. The Howard government said this was just adding to cost-of-living pressures at a time when oil costs were up and transport costs were rising—and for outer metropolitan communities like mine, who could spend 2½ to three hours a day commuting to their economic opportunity, these were matters of serious concern.

What was the thesis of the member for Wills? The thesis of the member for Wills was to abandon the six-monthly indexation. For those who are interested, go back to 7 June 2001 and a stirring speech trying to defend automatic tax increases on transport fuels. His argument was by not automatically increasing transport fuels—petrol primarily—every six months we were undermining LPG. That was his thesis. We were undermining LPG and his argument was you have to keep pushing up the price of everything else to give LPG a chance. I wonder whether that conviction holds true.

He may well come into this chamber and say, in a moment of profound consciousness, that if that thesis held true on 7 June 2001 perhaps on 14 June 2011—one week and 10 years later—it may still hold true. He might still today recognise that pushing up the cost of LPG is going to be undermining the LPG industry. If pushing up petrol prices more to make LPG comparatively cheaper was a bad thing a decade ago, pushing up LPG prices by an excise that is not justified and is not necessary to make its differential with petrol less has to be catastrophic to be the LPG industry if we are to believe the thesis of the member for Wills. My view is that the LPG industry is resilient because there is so much going in its favour. I do not think price fluctuations alone are a factor but I do know that pushing a new excise onto LPG can be anything but helpful. We have a government that has been funding incentives for the conversion of vehicles, yet it does not walk the walk itself. I have raised in this parliament before my ambition of supporting the LPG industry by having the taxpayer funded car that I am provided with fuelled by LPG. How extraordinary that the fleet purchase policies of the Commonwealth do not even facilitate the conversion and adoption of LPG technology at the same time the taxpayer is encouraging others to undertake such a conversion.

I urge the parliament to look carefully at these bills. I urge the parliament to listen to the advice of ACAPMA, the Australian Convenience and Petroleum Marketers Association, which points to a desperate need for a coherent transport energy plan for Australia. I urge the parliament to consider that the burden that is already on small- to medium-sized businesses at a time of difficult trading conditions will be made worse by the measures in this bill. I urge the parliament to take into account that this is a retrograde step in what we should all be doing—that is, encouraging the uptake of cleaner and abundantly available fuel in Australia. It would strengthen our energy security, improve our environmental emissions and improve the particulates and air quality arrangements around our capital cities. We should be doing all we can to support that.

In closing, I salute Jim Richards. Jim has been a tireless advocate for LPG most of his working life. He is a mature and wise man whose counsel I have valued for well over a decade. He will be retiring in the coming weeks. He has been a wonderful asset for LPG and its uptake. Perhaps that is why half of all the vehicles are in Victoria. I say to Jim and his lovely wife, Jan: enjoy the retirement; I am sure you will stay committed to LPG. I will stay committed to LPG. One of the ways I display that commitment is joining with the opposition to oppose this tax grab by a greedy Gillard Labor government, which is desperately looking for more revenue by imposing a new excise on LPG that is not justified. It runs against government policy and it is a bad idea. (Time expired)