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Wednesday, 19 September 1973
Page: 1258


Mr ANTHONY (Richmond) (Leader of the Australian Country Party) - The States Grants (Petroleum Products) Bill involves a great national princiiple - the principle of giving all Australians equal opportunity to be able to purchase the most important energy product for industry and to enable the fulfilment of every person's normal day. I refer to the price of petrol that is paid across the nation. The Country Party and the Opposition do not intend to oppose the Bill, for the simple reason that the policy intent of the Government to decrease the level of subsidies to petroleum users in rural areas will not be affected by our opposing this Bill. The Bill repeals section 6 of the principal Act giving greater flexibility to the oil companies in determining the rate of subsidy in various areas. It is an unfortunate fact that under this legislation the rates of subsidy are notified in the Australian Gazette and neither House of Parliament has any check on them. The Country Party strongly opposes the intention of the Government, as stated in the second reading speech of the Minister for Overseas Trade (Dr. Cairns), to increase the differential between metropolitan and non-metropolitan fuel prices. No doubt this measure has a particular appeal to the Labor Party which is zealous in its search for means of cutting back the support that is given to country people. However, much more than a philosophy is at stake.

I strongly suspect that this intention of the Government is but an initial stage in a longer term program to phase out the petrol subsidy completely. Because of this and because of the importance of the subsidy it is vital that I emphasise the significance of this form of support to people living outside the capital cities in Australia. The idea of a national uniform petrol price was promoted by Sir John McEwen and in 1965, as an initial step, the Government agreed to introduce a minimum variation between prices paid in capital cities and elsewhere in Australia. Since then, that differential has been reduced and it is approximately 3.1c at the moment. But this was a truly national ideal, the purpose of which was that people living in remote areas of Australia would not be penalised. It had the very worthy objective of trying to bring about more decentralisation and of encouraging industry in country areas. The aim ultimately, of course, was to have a uniform price at which everybody could buy fuel. Unfortunately, we now find that the trend is in the reverse direction and the disparity is widening as a result of the Government's Budget decision. If the Coombs report is followed through the subsidy will be eliminated entirely.

The clock is being turned back and the divisions within Australia are being widened. The disadvantages of living in country areas are increasing and the opportunities of decentralisation and of bringing about a more balanced development are less. But the effect on industries is enormous. It increases the costs of production to rural producers and that has the effect either of reducing their income or of increasing the cost of food. According to the Bureau of Agricultural Economics, fuel costs account for about 5 per cent of the average farm costs. This is a significant input factor and any increase in fuel costs naturally adds to overall farm costs. It is not an insignificant item and, indeed, is an essential one. Yet, this Government is arbitrarily increasing the cost not only by this means of extending the differential, but also through the additional 5c a gallon excise increase.

However, my concern is not only for the effect on farmers but also the effects on decentralised industries and services and those people - the diverse multitude of people - who live in provincial cities and country towns. Everything used in decentralised industries is affected by the cost of transportation. The life of a person living in the country is very much affected by the cost of his fuel. I venture to say that the mileage travelled each year by the average country citizen is vastly greater than that, covered by the average city person. Country people may travel shorter distances but city people have the opportunity of alternative forms of public transport. Increased petrol costs are a very significant factor in the life of a country person.

Let me cite as an example the position in Dubbo, New South Wales,. There is a differential of 6.4c a gallon between city petrol prices and those in Dubbo. The Government pays 3.1c a gallon subsidy so that the consumer in Dubbo pays 3.3c a gallon extra. The oil companies are proposing that the differential be decreased to 5.8c but the Government subsidy will be cut back from 3.1c to 0.8c, so that the consumer in Dubbo will now pay 5c a gallon above the Sydney price - an increase of nearly 2c on the previous level. However, let us carry this a little further. The Coombs committee has suggested, among other things, that the subsidy could be phased out over 3 years. If this were done, the consumer in Dubbo would pay an extra 6c on top of Sydney prices. I think it is particularly instructive to look at the situation in Leeton, which is in the electorate of Riverina so inadequately serviced by the Minister for Immigration (Mr Grassby). Under the Government's proposals, consumers in Leeton will pay an extra 1.7c a gallon through the Government's decision to vary the differential, and an extra 5c a gallon from the Budget's excise increase. So 6.7c a gallon extra will have to be paid for fuel in that area. Of course, if the subsidy is phased out, it will be even more than that. However, these are comparatively mild cases. The Coombs committee report says:

The subsidy varies in accordance with the cost of transporting the fuels to country areas, and ranges as high as 35c-

That is right, 35c- per gallon for motor spirit in remote areas with an Australia-wide average of 2ic per gallon.

I have in my possession a schedule which sets out subsidies payable to non-metropolitan areas under this legislation. It shows that the subsidy for Kalgoorlie is 2.9c a gallon; Meekatharra, 4.5c a gallon; Alice Springs, 6.5c a gallon; Bourke, 5.3c a gallon; Cobar, 4.4c a gallon; Mount Isa, 7.8c a gallon; Longreach, 7.4c a gallon; Tennant Creek, 8.4c a gallon; Oodnadatta, 11.1c a gallon; and Mount Newman, 13.2c a gallon. This is a very significant subsidy for those areas. If it is the intention to phase out the differential completely, this cost will immediately, be passed on to those who already live in high cost of living areas.

The Minister's intention to increase the differential to 5c a gallon is bad enough, but I suspect that even worse is to follow. I suspect that this centralist Government intends to phase out the scheme altogether. Imagine an extra 35c a gallon in some of the remote areas of Australia, as has been suggested in the Coombs report. One particularly significant point is the situation in the Australian Capital Territory. Here petrol prices are subsidised by ic a gallon but if the Government's intentions are implemented this will be eliminated. It will be very interesting to see whether the Minister for the Capital Territory (Mr Enderby) will allow this to be passed on to the consumers or whether it will be absorbed by the oil companies. Already he is compelling the oil companies to absorb the 5c excise. Of course, this situation can go on for only a limited period. The Prices Commissioner who was asked to examine the situation said that the price should be passed on to the consumer, that it was fair and reasonable. Yet nothing has happened. Where do we go when the advice given by the Government's advisers is not heeded? It will be a hopeless situation here before long if the oil companies decide that no fuel will be available for the Australian Capital Territory. That must be the ultimate outcome of this sort of dogmatic attitude being taken by the Minister for the Capital Territory.

What a magnificent contribution to decentralisation this proposal is. How effectively it implements the ALP's decentralisation policies. How completely it fulfils item No. 2 of its rural platform. The Labor Party's publication Rural - It's Time' reads:

The Australian Government to provide funds where necessary to obviate the disparity between urban and rural areas in the cost of education, medical services, communications and other public utilities.

This is the brochure distributed by the ALP before the last election. It goes on to say:

As long as the Country Party has a dominant say in the Federal Government, policies of decentralisation based on large scale industrial activity and the creation of prosperous provincial cities remain deliberately dormant.

It continues:

The implementation of policies to establish permanent decentralised cities and towns of a solid economic base to allow for steady growth is an important platform of Labor policy. Processing and ancillary servicing industries will be given every encouragement through financial and taxation incentives.

Let me now quote the third paragraph of the Minister's second reading speech:

The scheme is expensive and less efficient in achieving its objective than is desirable.

But the king daddy is this sentence:

In practice the largest payouts under it are made in major inland cities.

I would have thought that this was hardly consistent with ALP policy.

In its policy brochure the Government accuses the Country Party of not doing anything to help provincial cities and towns and says that the Country Party has a hostile attitude to development. Yet one of the reasons it gives for reducing the differential is the high cost of distributing the fuel to some of these provincial cities and towns. I would have thought that the encouragement to decentralise industry into these areas was a very worthy and national objective which all members of that Party would have supported. But instead we have heard this hypocrisy from honourable members opposite. Apparently they do not squirm; they do not have any conscience at all when it comes to what they wrote in their policy speech before the last election.

Nowhere will the impact be greater than in the northern regions of Australia - in the north west of Western Australia, in the Northern Territory and in Queensland. Yet this policy is directly contrary to the objectives of setting up a Department of Northern Development which was supposed to give people up there encouragement and to give them the same sort of opportunities as other people in Australia have. It is diametrically opposed in its effect to what its objective was supposed to be.

As I said earlier, the Opposition does not intend to oppose this legislation. But we on this side of the House think it is important that there be scope for the freight differential to be flexible in accordance with changing industry standards. That is the reason why an amendment is being made to the Bill. What we object to is not the changing freight differentials and the changing distribution costs but the changing rates of subsidy. This is done by gazettal. Let me state now that the Country Party seeks to have those notices made by regulation within the definition of the Acts Interpretation Act so that the Parliament can exercise some control over the intentions of this Government. At the moment there is no measure that can be taken by either House of Parliament to prevent the Government from following through with its intention to. eliminate the differential completely. I hope that when the Bill goes to another place consideration will be given to introducing an amendment there which will require the Government to bring about any alterations by way of regulation. This would be laid before the Parliament and the Parliament, if it wished, could repect any alterations made.

The intentions of the Government as known and stated are worthy of condemnation, but probably worse awaits us. This particular matter is just one of a whole series of matters by which the Government has been penalising and making conditions worse for those people living in rural areas and country towns. It is because of this that the Government deserves the greatest condemnation for its attitude in this matter. It is not a national government when it is displaying obvious sectional tendencies, which tendencies show bias towards people living in the city areas at the expense of people living in country areas. If we are to grow as one great nation it is imperative that people are encouraged to participate in the development of all sections of this nation. I do not want to see our city cousins penalised for the sake of unfair advantages that country people might receive, but I think we all have a right to equal conditions. That is basically what we are fighting for. We abhor what the Government is doing fundamentally in changing the present differential.







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