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Wednesday, 24 August 1994
Page: 223

Senator WOODLEY —My question is addressed to the Minister representing the Treasurer. I refer the minister to the Industry Commission's final report on the petroleum industry, handed to the government several weeks ago. Can the minister confirm that the report recommends the widespread deregulation of the industry, including all price controls and arrangements governing franchises, sites and wholesale distribution? Given that the lack of competition at many levels in the oil industry, especially in country areas, has resulted in Australia having one of the highest wholesale prices in the OECD, does the minister agree with the Industry Commission's earlier finding that vertical integration, with oil companies buying large shares in regional distributors, is not a major problem? If so, what plan does the government have to reduce the huge disparity between city and country petrol prices, and when will the government release the final report?

Senator COOK —Senator Woodley's last observation is a little bit mean. The Industry Commission is an authority set up by the government to examine areas where there needs to be greater competition or efficiency. We tasked it with the responsibility of examining this area. It has now gone through the processes of an investigation. It handed down a first report which was open for public comment, and it has now filed, I think on 26 July, its final report with the government.

  We are committed under our procedures to respond to that report publicly, and we will do so towards the end of September. That will be an interim public response by the government. When we make our response, we will take further consultation with the community before we put down our final response. That is an extensive process of consultation, investigation, examination and consideration of a sensitive and important issue.

  But I make the point that it is a bit mean to attack us by asking when we are going to release this. We instituted it, we are carrying it through and it is part of an array of government approaches to make sure the economy is efficient and operates to the wellbeing of the consumers in Australia.

  In the case of this particular issue, the then Acting Treasurer, Mr George Gear, announced the terms of reference for the Industry Commission's inquiry into Australian petroleum refinery on 5 May 1993. The announcement of the inquiry followed, as Senator Woodley would know, a history of disputation within the industry, as identified by a number of earlier state and federal government inquiries. The draft Industry Commission report was released on 28 March. I have gone through the history of what then follows. We have examined it and we, as a government, will make a response to it announcing what we propose to do, in view of its recommendations, probably in September.

  This is a very interesting report. The reason why we chose this sector of the economy is that it does need the searchlight of scrutiny shone on it. But we are not bound by the recommendations of the inquiry, and what we do will be a considered and measured response by government.

  While I am on this subject, and given my inauspicious start to my answer to Senator Woodley's question, perhaps the Australian Democrats might consider saying something about what I think was a disgraceful performance by the states in Darwin last week on competition policy when this country has a huge opportunity to capture massive gains which will save Australian taxpayers and consumers money on water and electricity bills. Across the whole range of state-provided services consumers stand to gain a huge amount, but the states have performed, I think, in a less than adequate way in that inquiry. That is a big area of savings too in addition to this area.

Senator WOODLEY —Mr President, I ask a supplementary question. I might just say that the Australian Democrats have made comments on the COAG meeting—not quite in the terms that the minister has indicated, however. I wonder whether the minister might answer the part of the question which is of great interest to us, and that is whether he agrees or believes that the deregulation of the petroleum industry will in fact provide the benefits that we are seeking in terms of the disparity between city and country prices.

Senator COOK —I do not think senators are interested in, nor are they entitled to be concerned about, my private views on any particular subject. My views as minister will be put in cabinet, and the government's response will appear when it makes its response in September.