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Monday, 9 December 2002
Page: 7381

Senator HUTCHINS (2:15 PM) —My question is directed to Senator Coonan, the Minister for Revenue and Assistant Treasurer. Does the minister stand by her claim to the Senate on 23 September when she said:

It is appropriate ... that ethanol is taxed on the same basis as petrol.

Can the minister confirm Treasury's advice to the cabinet that, because ethanol is taxed, introducing a mandated amount of ethanol into petrol will also increase the price of petrol for motorists? Isn't it the case that Treasury has estimated this price increase at three-quarters of a cent per litre for each 1c per litre mandated ethanol content in petrol? Doesn't that mean a price increase of 7.5c per litre as a price that motorists would bear for the Prime Minister's gift to his mate of 10 per cent mandated ethanol content in petrol?

Senator COONAN (Minister for Revenue and Assistant Treasurer) —Thank you, Senator Hutchins. My goodness, today must be the day for rehashing all the old questions. The issue to do with ethanol has been canvassed in this place for roughly about a week ad nauseam. The situation has certainly not changed since there were a series of questions in this place.

The implication that there is something improper between the Prime Minister and Mr Dick Honan has been frankly and systematically repudiated not only in this place but also in the House. There is no doubt, and there cannot be any doubt, about anything improper happening in relation to the ethanol proposal. It is quite clear that not only has there been nothing improper in relation to the arrangement with Manildra but, indeed, there are other ethanol producers who also benefit from the arrangements. This continued imputation on the propriety of this policy is just a further slur by the Labor Party, this time on the Prime Minister.

The Labor Party go from one person to another because they are a totally policy-free zone. How wrong can they be! It does not matter what they ask about; it is usually wrong. It goes up a blind alley. The Prime Minister has advised the House that he had not himself talked to Mr Honan on the issue. He found on checking that there were a number of letters received in his office on the ethanol issue from various sources. The Prime Minister's office did get a letter from Mr Honan; it was not passed to the Prime Minister. The Prime Minister's office has also spoken to a number of parties about options for promoting the ethanol industry, which included the Australian Biofuels Association and people with a different view. In fact, Mr Honan also had conversations with Mr Crean, so obviously he has also spoken to the opposition about this policy. There is no suggestion that Manildra is the only beneficiary of the subsidy.

Obviously the subsidy is not a matter for my portfolio—nor, indeed, is the administration of the issues to do with ethanol. What is appropriate for me to repudiate—and I do so wholeheartedly—is the suggestion that there is anything improper in what has been done in respect of putting together this policy, which of course has been put forward for very good reasons. The improved legislative and administrative arrangements that the government has announced should not lead to an increase in petrol prices. Why would they, you might ask. The petrol market is very price competitive and parties in the market are hardly likely to use inputs to make fuel unless those inputs lead to a price competitive product. The current law allows ethanol to be imported free of customs duty for blending with petrol in Australia, and very little has been imported for this purpose. I fail to see how this measure will affect the price of supply of any petrol outlets that rely on imported ethanol. It is appropriate that ethanol, which is an alternative fuel to petrol, is taxed on a similar basis to petrol. Once again, another furphy from the Labor Party.

Senator HUTCHINS —Mr President, I ask a supplementary question. Can the minister explain why what should have been a minor matter of revenue policy—namely, excise on ethanol—was personally announced by the Prime Minister? Wouldn't it normally be the case that the Minister for Revenue or someone else in the Treasury portfolio would announce a change to the excise rules? Did the Prime Minister announce the excise decision as a favour to his mate in the industry or was he forced to do so because the Minister for Revenue and the Treasurer refused to announce it?

Senator COONAN (Minister for Revenue and Assistant Treasurer) —Thank you for the supplementary question. It is one of Senator Hutchins's ploys, I think, to try to suggest that there is something improper with this policy. The revenue effects are pretty clear. The fact that the Prime Minister announced it simply indicates that the policy has implications across many portfolios. It certainly does not only affect mine, and the Prime Minister in his usual efficient way frequently announces policies that have cross-portfolio implications. Why would he not do that? Obviously in those circumstances it is an integrated policy, it is a properly thought out and comprehensive policy, and it is entirely appropriate that the Prime Minister should take the lead on it.