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Tuesday, 9 October 1984
Page: 1472


Senator PETER RAE(4.53) —We are dealing with the Petroleum Retail Marketing Franchise Amendment Bill 1984 and the Petroleum Retail Marketing Sites Amendment Bill 1984. The Bills result from a review of the operation of legislation which was introduced in 1980 by the former Government to endeavour to overcome some of the problems which had arisen in relation to petroleum retailing in Australia. The Opposition not only instigated and advocated the review which was undertaken by the Department of Industry and Commerce but also supported and encouraged the expedition of its completion. As a result of the review and of very substantial consultation within the industry these two Bills are now before the Parliament to make more workable the legislation which was introduced in 1980.

The amendments to the Petroleum Retail Marketing Sites Act and the Petroleum Retail Marketing Franchise Act now before the Parliament have been developed after lengthy discussions between members of the Department of Industry and Commerce and all sectors of the industry. The industry has made it clear to me and I have no doubt to some others in the Parliament that it is most concerned that this legislation should go through forthwith. In consideration of the representations which were made to the Minister for Industry and Commerce ( Senator Button), to the Opposition and, I imagine, to the Australian Democrats, the Opposition undertook to assist the Government by ensuring speedy passage of this legislation if it were listed early. The industry as a whole, irrespective of whether it likes the legislation or not, believes that the amendments are desirable and will make the operation of the legislation more workable. The Australian Institute of Petroleum, which comprises representatives of all major petroleum refining and marketing companies, is in agreement that it is very important that the amending legislation is proceeded with and passed in the current session. Institute members have indicated that to me and to others with the request that this be expedited to ensure that the changes which are proposed , some of which are already in the course of implementation in anticipation of the passage of the legislation, will not be held up as a result of the premature election which the Government is calling to avoid the inevitable problems which it will run into as a result of its economic mismanagement.

The Petroleum Retail Marketing Franchise Amendment Bill proposes to amend the legislation which was introduced by the previous Government and which refers to the basic rights of lessee franchise service station dealers. The Bill contains a number of provisions to clarify the relationship between the franchisees and the franchisors, simplifies various mechanical and administrative procedures and clarifies the original intention of the Act not to apply to predominantly wholesale establishments or depots. This is done by introducing a description of a bulk site agreement to enable the removal of existing bulk wholesaling establishments from the ambit of the Act and to provide the basis for the exclusion from the Act of new outlets with predominantly wholesaling characteristics, and by replacing the current percentage-based application test for determining whether particular agreements are subject to the Act with a more precise and administratively less cumbersome volume based test, which is the subject of comment by the Senate Standing Committee on the Scrutiny of Bills, to which I will come back at a later stage. I simply draw attention to the fact that whilst the Committee commented on some aspects of the Bill, it finished up saying:

The Committee acknowledges the need for flexibility in the administration of this scheme and notes that, since the regulations may be disallowed by the Parliament, some measure of parliamentary scrutiny of the powers delegated to the Minister is retained.

The Bill achieves its purpose by adding a new provision to ensure that payments made by a franchisee under a franchise agreement cannot be increased unreasonably during the term of the agreement; by adding several new grounds for the termination and the non-renewal of franchise relationships, to assist with the orderly rationalisation of retail outlets; by clarifying the mechanical and administrative procedures relating to renewal and assignment negotiations; and by amending the injunctions and compensation provisions to allow franchisors the opportunity, currently available only to franchisees, to seek relief under the Act. As I said, the proposals are a result of a review which was undertaken by the Department during 1983. Clause 8 of the Bill inserts a new section which is designed to protect franchisees from 'unreasonable' increases in amounts payable under franchise agreements, but it does not specify what is to be regarded as ' reasonable' or 'unreasonable'. Perhaps one of the Ministers-we have had several playing musical chairs in the chamber this afternoon-will be able to indicate to us what he understands the words 'reasonable' or 'unreasonable' to mean. Clause 22 seeks to amend section 26 of the Act so that the State and Territory inferior courts can deal with certain matters. This is designed to lower costs and facilitate settlement of any disputes, and is particularly applicable to small businessmen and is welcomed by the Opposition for that reason.

Consultation indicates that the industry, including oil companies and service station operators, are happy with the general provisions of the Bill. As I indicated earlier, there has been wide consultation. I compliment the Government on the extent to which there has been-from everything that I can gather-wide consultation in the course of the review and as a result of the product of the review, with all sections of the industry. There is what I have described as an overwhelming desire to ensure that irrespective of whether one likes the legislation or not, what is proposed now will be an improvement on what has been . The point I was trying to make earlier, and having now caught the Minister's attention, I would like to make again, is that the Opposition is not committing itself to the legislation by supporting the proposals for the amendment. As I said a moment ago, we compliment the Government on the consultation and review which has taken place and on improving the legislation. Whether we would, in government, seek to further reconsider the legislation is another matter. Whilst we will support these proposals and will give, as I indicated to the Minister, speedy passage to the Bills, I do add that qualification.

The Petroleum Retail Marketing Sites Amendment Bill 1984 proposes to amend the principal Act, which again was introduced by the previous Government in 1980, by changing the number of company operated sites and by simplifying various provisions of the Act and, in particular, by replacing the current percentage based application test for determining whether a particular site is subject to the Act with a more precise volume based test; by removing current exemptions from quota for market research and training sites and clarifying the remaining exemptions for diesel fuel and temporarily operated sites; by adding new provisions to define which motor fuels and which sales of those motor fuels will be subject to the Act, and by altering the application of the Act from a basis of sales made on a particular day to a basis of sales made during a particular month to accord more closely with commercial practice and to reduce the administrative requirements on prescribed corporations. I pause there to say that I understand that these are all matters which are likely to reduce cost and improve efficiency, something which the Opposition would obviously wish to support.

There is provision for repealing the section relating to associates to clarify that direct company operation is not restricted where the only link between companies is that they are associates; for amending the pecuniary penalty provisions to ensure that each site operated in excess of quota and each contravention of the returns provisions of the Act constitutes a separate contravention, liable to a separate pecuniary penalty; for introducing a new transitional provision to protect incumbent commission agents at sites which a prescribed corporation ceases to operate directly during the 18 months phasing period-that is, 1 January 1985 to 30 June 1986-effected by the new quota allocations scheme, and for changing the number of sites to reflect current market shares held by various companies.

It is beyond dispute that there have been very considerable problems in the retailing of petrol throughout Australia which have lasted over a number of years. The previous Government sought to overcome those problems with the legislation which it introduced in 1980. It sought to ameliorate the disadvantages which it appeared were being suffered by those who were in a weaker bargaining position than the major companies. As I indicated, there is the question as to whether a self-regulatory system following the introduction and operation of this legislation may not achieve as desirable, or even more desirable a result than the sort of continuation of the authoritarian legislative approach which was adopted to solve the problems that had been going on for some years and which are being improved by this legislation.

The Opposition notes that all sections of the industry support the amendments as improving the legislation. I undertook to speak for no more than 10 minutes on this matter; I have spoken for 11. I have exceeded myself by one minute for which I apologise. The Opposition supports the legislation as an improvement on the existing legislation and, in supporting it, does so with the qualification which I indicated earlier.