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Thursday, 20 May 1965

Senator ANDERSON (New South Wales) (Minister for Customs and Excise) (12:15 PM) . - In reply to Senator Wright, I come back to the point I made in the first place that the differential is fixed as at 31st December 1964 and that is constant. The recipients are to receive a fixed amount so that they will pay no more than 4cl. over and above the capital city prices in the relevant States. That figure is known. If there is to be any alteration in the differential, there would not be so much an erosion of the amount the Commonwealth would pay but there would be a situation where it would not necessarily be an amount in excess of 4d. over the wholesale price. In other words, the Commonwealth's contribution would remain at £6 million. The people would get the advantage but it would not necessarily be the sum total of the amount over and above 4d. a gallon.

Senator Wrightexpressed some concern about the way the petrol industry operated and how it happened that wholesale prices of petrol were the same in the various States. Prices are fixed first for the city and the country in the three States which have price fixing legislation. Those States which do not have the power to fix prices follow the same general pattern. Differentials are fixed by an all-industry committee and again, in the case of the three States I mentioned first, these are approved by the prices commissioners in the States concerned.

The Leader of the Opposition (Senator McKenna) asked some questions about costs. In broad terms, the final cost that will be allowed to the oil companies has not yet been resolved but it will be shown on a percentage basis.

Senator Wright - The Minister is speaking of the final expenses to be allowed?

Senator ANDERSON - That has not been resolved finally but will be a matter for negotiation. Of course, the Department of Customs and Excise has some very specialised knowledge of these costs because the Department is involved with the industry in another field. Therefore this is not a situation where we are not particularly well informed on what might be considered reasonable costs of administration in this field. The Leader of the Opposition also referred to percentages. The actual percentage basis has not been resolved.

Senator McKenna - Can the Minister say what the nature of the work will be?

Senator ANDERSON - The oil companies will have to carry out a considerable amount of clerical work in collating the sales in each of the subsidised areas. Besides this clerical work, the oil companies will have to make claims. These claims will have to be made on prescribed forms. Officers of the Department of Customs and Excise will become officers of the States for the purpose of supervision. Whilst claims will be cleared initially for the purpose of payment, in the Bill, there is provision, as honorable senators know, for advance payments. Provision is also made for officers of the Commonwealth to make subsequent inspections and investigations of claims and, if any error in the claims is detected, power is given to make an adjustment. All of these things will require work by the oil companies. The point at issue is the degree to which the oil companies consider that they will be disadvantaged. As I said in my second reading speech, apart from the fact that this scheme may stimulate the sale of petroleum products - I think Senator Kennelly or Senator Webster made this point - there is in fact nothing in the scheme for the oil companies. They will not get any monetary consideration out of the scheme.

Senator Wright - It depends upon what percentage the Minister fixes.

Senator ANDERSON - I know. My second reading speech is quite clear on this point. The oil companies receive no advantage beyond the fact that, perhaps, this scheme will stimulate the sale of their products.

Senator Kennelly - Will not the oil companies have other advantages,

Senator ANDERSON - No. The Government will pay the oil companies for the expenses in which they may be involved. Honorable senators should get back to the basic scheme. The distribution centres are established and they will be constant. We know that wherever the price is 4d. above the price in the capital city of the State concerned, the consumer is to get the advantage of the supplement, which the companies will pay to them. The oil companies arc obliged under their charter and registration to pass on the subsidy. The oil companies will make their claims on the State Governments concerned. In turn, the Commonwealth Government will pay the State Governments for the claims made upon them. There is no profit in the scheme for the oil companies beyond the point made in the second reading debate that, naturally, the sale of their products will be stimulated. I think honorable senators have to get the basic scheme well and truly established in their minds. The petrol companies have to seek registration. They are obliged to conform to certain requirements. Officers of the Department of Customs and Excise will check their claims. There will be subsequent checks on claims. There is the provision in the Bill for reference of matters to the auditor.

This is not a simple Bill. We cannot read through this legislation in chapter and verse style as is possible with some measures. As I said at the outset, we have an agree ment here which is made between the Commonwealth, the States and the oil companies. In those circumstances the Bill does not lend itself at this stage to a complete spelling out of all normal requirements. But I want to say to all honorable senators - and this adverts to the point made by the Leader of the Opposition as to the actual amounts the oil companies are to receive for the expenses that they will outlay - that if we held the scheme back while this particular point was finally resolved, the effect would be to deny to thousands of Australian people in country areas the advantage which it is the decision and policy of the Government to give to them. While this matter remains unresolved, our whole purpose is to get this Bill enacted and placed on the statute book. We want it implemented for the purpose of enabling this advantage to be passed on to people in country areas by October of this year.

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