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Wednesday, 10 October 1984
Page: 1579

Senator CHANEY (Leader of the Opposition)(5.15) —I move:

That the Senate take note of the paper.

I have not yet had a chance to read this report although it is now available to us. I did want to say a couple of things about this question of prices surveillance and, in particular, to mention it in the context of the petroleum industry. We face a situation in Australia where there has been a significant duplication of price control in the petroleum sector. The arguments about whether or not we should have any price control at all are dwarfed, I think, by the arguments about whether we should have two systems of price control, one at a Federal level and one at the State level with a consequent squeezing of prices and a squeezing of margins with a very severe effect on the profitability of the companies which are operating in this field. It is a difficult field for governments for the simple reason that the electorate is sensitive to the price of petroleum. It is seen as very good politics to exercise control and to appear to be reducing the price of petrol to the consumer. Clearly, that is seen as attractive in electoral terms and it has resulted in a series of State measures being taken which have overlapped with Commonwealth control of prices in this area.

That has been a matter on which there have been very loud complaints by the companies in the field. Those complaints are borne out by the profit figures which have been released by many of the companies over recent years which show either no profitability or a very small level of profit. The companies have regarded the dual system of price control as a very significant contributor to their difficulty. Obviously State governments do not make any political points with their electorates unless they push the retail price of petrol below the level which is established by the Commonwealth Prices Surveillance Authority. So , in a sense, there is a political competition for being seen as the saviour of the motorist in this area, to the great detriment, I think, of the long term health of the industry and, ultimately, the long term interests of the consumer.

I acknowledge that the present Government has been concerned about this problem . In its establishment of the Prices Surveillance Authority it has worked towards achieving the removal of that difficulty. There has been a voluntary stepping aside on the part of State governments over recent months. That is a matter which I think has been welcomed by industry and which I think, if we move towards a more deregulated economy-there appears to be growing common ground about that-that is a matter which should be welcome and certainly I welcome it. I note with some concern that there is an element of fragility in the consensus which has been established in this area. I think the Premier of Victoria, Mr Cain, has threatened to move away from the agreement which was made or the understanding which was entered into if the retail price of petrol exceeds a certain limit in his State. On behalf of the Opposition I express the view that, quite apart from any question of whether the regulation of the price itself is a good thing at any level, dual regulation is, by definition, wasteful and likely to lead to inefficiencies and circumstances which are extremely unfair to those who are involved in this trade.

However, I think there are broader considerations which arise when we are considering the question of prices surveillance in the petroleum industry. In the policy which the Opposition parties released recently in the field of resources and energy the point is made that the oil industry is extremely heavily regulated from wellhead through to pump. It is indeed one of the most regulated industries in Australia. The degree of regulation is, in the view of the Opposition, not in the interests of Australia and not in the interests of those who are engaged in the industry, although as with all forms of regulation, once people become enmeshed in it they devote a good part of their energies to ensure that the regulation is to their advantage. But I think the important point for Australian consumers to note is that at the moment the overall pattern of regulation of the oil industry is such that-I do not think there is any doubt about this-they are paying more for petrol today than they would be if the industry was totally deregulated. In other words, with the very substantial web of regulation which has been erected, including the regulation which requires Australian refiners to take Australian produced crude, which places limitations on the importation of crude, which has limits on the right to export Australian oil and so on, the fact of the matter is that Australian prices for crude oil are being maintained at a price which is higher than the price which would obtain if the market were allowed to be free and if there were genuine competition in this area. I do not believe the recent decisions of the Government in this area will get over that problem at all. Senator Walsh said that he would like to deregulate the industry in 1988. He is like St Augustine: He would like to be virtuous, but not yet. It is a pity that in this area the Government has not adopted the more thoroughly deregulatory approach that it has adopted in some other areas. I seek leave to continue my remarks later.

Leave granted; debate adjourned.