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Thursday, 16 May 1985
Page: 2066

Senator REYNOLDS —Is the Minister for Resources and Energy aware of general confusion in country areas about changes to the petroleum freight subsidy scheme? Can the Minister clarify the position, particularly in regard to the increases in petrol prices as from next Tuesday? Can the Minister explain also why inland cities like Mt Isa and Alice Springs cannot be exempt from this decision, given their extreme isolation and obvious hardship of having petrol costs skyrocket unacceptably?

Senator GARETH EVANS —To the extent that there is any confusion in country areas it has, of course, been assiduously cultivated by the misrepresentations of people like Mr Hunt of the National Party of Australia who, in his Press release yesterday, suggested that there would in fact be a rise in the petrol price for all country people, a rise in effect of around 4c across the board. Nobody suggests that these cuts are painless, but it is important to appreciate where the pain does in fact fall, and to what extent. What the Government has done is increase the maximum freight component payable by consumers in certain non-metropolitan areas from 1.2c per litre to 5.2c per litre-that is to say, a maximum of 4c. The overwhelming majority of petrol consumers in metropolitan, provincial and rural areas presently pay no freight component at all, or have been paying no more than 1.2c per litre.

There are, however, some 3,900 remoter locations around Australia where for that part of the freight cost of a litre of petrol which exceeds 1.2c the government has up until now been paying a subsidy. These locations will be affected by the cuts, but it needs to be appreciated just to what extent they will be affected. For just on half of them the subsidy has been 1c or less, so only 1c or less extra will now be payable by consumers. That is true for example in some places like Moranbah in the Bowen Basin, Bathurst, Woomera in South Australia, and Evoca in Tasmania. In three-quarters of these remoter locations consumers will pay 3c per litre extra or less. For example, in Mt Tom Price and Goldsworthy in the Pilbara and in Ceduna in South Australia it will be between 1c and 2c, and in Kalgoorlie it will be between 2c and 3c.

It is only in one-quarter of the 3,900 locations that consumers will have to pay the maximum 4c extra. That includes a miscellany of places like Wyndham, Exmouth, Alice Springs, Flinders Island and Coober Pedy where it is obvious their remoteness is such that freight costs are very substantial indeed. I give just a couple of examples. In Mount Isa the freight subsidy has up until now been 6c a litre and not payable by the consumer. The Government subsidy will in effect be reduced to 2c with the consumer paying 4c. In a place like Thursday Island, to which it is extraordinarily expensive to deliver fuel, the subsidy has been 23.8c per litre and will go on being 19.8c per litre with, again, the consumer paying a maximum of 4c.

The main point I wish to emphasise in particular to counter the confusion that is being deliberately promoted around the place in that these locations, where the full 4c extra is being paid, represent only around one-quarter of the total. In fact, in Queensland-to the extent that we have been able to pull out population figures in just a couple of States so far-fewer than one in five of country people who have previously been getting a subsidy will be paying the maximum of 4c. For the rest, most of them will be paying less than 1c, and for the others it will be 2c or 3c. I think that needs to be put very clearly on the record.

I should add quickly that despite the statements of National Party spokesmen such as Mr Hunt, the National Farmers Federation yesterday made it very clear that in its view the cuts were fair. The President of the NFF, Mr McLachlan, said that the Government's general package was a step in the right direction and that so far as freight rates specifically were concerned, farmers were 'prepared to take some medicine if all other sectors in the community were treated accordingly'. It is a pity that Mr Hunt does not listen to his own constituency. I have now noted Mr Howard coming unequivocally on to the public record this morning in the Sydney Morning Herald as saying that there is no question, in the unlikely event that he should ever return to government, that a Liberal government with him as Treasurer would reimpose the subsidy and in any way undermine the cuts that the Government has made.

Against that background, it needs to be appreciated, once and for all, that the cuts are fair, that they have been imposed for good, sound reasons, and there is no scope whatsoever for misrepresentation.

I add one more point: If consumers anywhere in the country believe that they are being ripped off by petrol pump proprietors adding 4c a litre in the next few days in circumstances where the freight subsidy probably ought not to be that much, they are very welcome to get in touch with my office directly and we will tell them from the schedule of subsidy rates that are available just what the maximum should be.