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Tuesday, 2 October 1984
Page: 1047


Senator CHANEY (Leader of the Opposition)(5.38) —The Opposition is concerned at the direction that the Government is pushing the oil industry. Our concern goes much further than the introduction of the resource rent tax and the downturn in off-shore exploration that seems to be related to that decision, or the fact that most of the changes the Government has made to the industry either directly or indirectly have resulted in increased government revenue, at the expense of both oil producers and consumers. We are concerned that there is a strong thrust towards more regulation in the industry and more Commonwealth Government bureaucratic control despite Senator Walsh's free market rhetoric. This has become especially evident in the last nine to 12 months. The effect is to maintain a higher price for petroleum than would otherwise apply.

There are currently two pieces of legislation before the Parliament that seek to increase Government control over the industry, the Customs Tariff (Stand-by Duties) Bill 1984 and the Petroleum (Submerged Lands) Amendment Bill 1984. No doubt we will have an opportunity to debate the merits of these Bills at a later stage and I am not entitled, I think, to anticipate debate on them here. But for now I would simply note that the Customs Tariff (Stand-by Duties) Bill is a big stick to enable the Government to put a customs duty on imported crude oil thereby increasing its price if, in the opinion of the Minister for Resources and Energy, not enough oil is being uplifted from Australian oilfields. This denies Australian refiners and consumers the opportunity of taking advantage of temporary lower prices available for oil overseas and enables the Government to hold the price of Australian oil and, therefore, petrol prices higher than they should be, simply for government revenue reasons.

The petroleum (submerged lands) legislation is designed to give the Commonwealth Government power to control how much oil the producers can uplift from each oil pool with an explicit concern for Commonwealth revenue implications but no apparent concern that the direction given by the Government might damage oilfields. Such damage, if it occurred, would reduce the amount of oil that could be recovered from the fields. The Opposition has already indicated that it will move an amendment to ensure that government greed for revenue will not be able to take precedence over good oilfield practices. The potentially most significant government decision on the oil industry is one that will not even come before the Parliament. It is the decision to renew, replace or otherwise modify the crude oil allocation system, which is an integral part of the current regulation of the oil industry. As the Government is reported to be close to a decision on this matter and because it is potentially very significant for the future structure of the industry, I would like to say a couple of words on it today and to make available some more detailed comments in writing on what this Government is doing and what it should be considering.

The Department of Resources and Energy has prepared two papers on the allocation scheme in the past few months and has invited industry comment. Despite a substantial part of the industry arguing for a freer market, and the Minister for Resources and Energy (Senator Walsh) saying that he believes in a freer market, the Department's papers advocate a continuation of the regulated approach and give virtually no thought to freeing up the system. They almost go to a stage where it could be said they are biased against a free market system and misinterpret or misrepresent the amount of support, and the arguments, for such a system. In addition the Opposition is concerned that new issues appear to have been introduced into the Department's latest discussion paper with little or no industry consultation and no time for discussion being allowed before the Government makes its decision.

I have had a paper prepared in my office on an alternative and more free market approach to the marketing of crude oil. It contains options and arguments that the Department does not appear to have considered. I challenge the Minister to look at this document and talk directly to people in the industry before he decides on the future of the allocation scheme. I challenge him to give more thought to the possibilities and potential benefits of the free market than his Department appears to have done. I do that bearing in mind that in a number of areas the Government has been prepared to adopt a more deregulatory approach, for example, in regard to the financial system. Where that approach has been adopted by the Government, the Opposition has welcomed it and has not tried to make a political issue out of it, even when there may have been some possibility of doing so. In this area I believe that the Government should look to the same principle and look to a freeing up of what is a highly regulated system.

Although the current scheme is due to expire on 31 December the industry needs to know what will take its place soon. It is obvious that more thought and discussion is needed on this matter. The Government should not put a new and possibly inadequate system into place for a long period while there is a possibility of vastly improving the system. I suggest that the Minister considers extending the present arrangements for another six months-until July 1985-to enable him to examine schemes that do not just have the interests of the Commonwealth bureaucracy as their rationale but make a genuine attempt to improve and deregulate the oil market. It appears to me, from the public statements of the Minister, that he is in favour of a freer market but that there is little interest in the industry and that he is not getting the views of the industry direct. I am sure that there are substantial sections of the industry which would favour a freer market approach than is at present being advocated in the departmental paper which has recently been issued. I ask the Minister to give serious consideration to a holding action on this very important issue to enable him to have a greater dialogue with the industry and to see whether his own freer market principles which he has publicly espoused could be placed into operation.

I know that Estimates committees wish to sit. It is a large and interesting subject, and it is one which I would be happy to continue to debate. I simply seek leave to table the paper which I have had prepared. I ask the Minister to consider it and to consider the sort of action that I have advocated. I think that would be a satisfactory amount of progress for this afternoon. I seek leave to table this paper.

Leave granted.


Senator Walsh —Mr Deputy President-


The DEPUTY PRESIDENT —Minister, I cannot call you because you moved the motion for the adjournment, and another honourable senator wishes to speak.


Senator Chaney —I am happy to agree to leave being granted for the Minister to speak. I indicated to the Minister that I would be speaking on the adjournment. In fairness, we thought that he could not be present because of departmental commitments. We have gone on so long that he is now present.


The DEPUTY PRESIDENT —Is leave granted for the Minister to speak without closing the debate? There being no objection, leave is granted.