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Thursday, 27 May 2004
Page: 29386

Mr FITZGIBBON (2:41 PM) —My question is to the Prime Minister. Is the Prime Minister aware of recent comments by the Macquarie Bank's Chief Economist, Mr Richard Gibbs, who predicts that crude oil prices could hit $50 per barrel? Further, is he aware that such an increase would result in a 10c per litre petrol price hike? Prime Minister, given these comments and the implications for petrol prices, will the government now adopt Labor's plan for petrol prices, including an overhaul of the Trade Practices Act to ensure that the Australian motorist is not ripped off by those who seek to exploit and profit from higher petrol and oil prices?

Mr HOWARD (Prime Minister) —I am not specifically aware of that report but I have certainly read a lot of reports that speculate about the impact of a further increase in the price of crude oil. Let me say that the current price of crude oil is influenced by a lot of factors. It is influenced by the increased demand for crude oil, particularly from China. It is influenced by the onset of the summer season in the United States and by the depletion of the strategic oil reserve in the United States. It is also influenced by the unsettled conditions in the Middle East.

While we are into predictions, I think that, if the coalition were collectively to cut and run from Iraq, that country would be plunged into great bloodshed and chaos, and the impact of that on the price of crude oil would be absolutely disastrous. So anybody who is running around saying that the price of crude oil is due exclusively to what is happening in Iraq—as I think the Leader of the Opposition was trying to do in Queensland last week—ought to contemplate the consequences of the West walking out of Iraq and handing that country over to the terrorists, the reaction that would create among neighbouring Arab states and the absolutely catastrophic effect that would have on the stability of crude oil prices. If you want crude at $50 a barrel, support the Latham policy on cutting and running from Iraq. That is what you ought to do.

As for the review of the Trade Practices Act, with very great respect to the member for Hunter, the idea that some kind of review of the Trade Practices Act is going to have any direct or real effect—or even an indirect or delayed effect—on the price of crude oil is quite fanciful. The price of crude oil is set by a combination of international circumstances. The member for Hunter knows that.

Just before concluding, I say that the price of petrol at the bowser is now 5c to 6c lower than it would otherwise have been had it not been for the excise changes that this government introduced three years ago. If we had had automatic indexation of excise—and I remember introducing those changes very well and, if I remember rightly, they were supported at the time by the Australian Labor Party. The member for Hotham, the man of the magic pudding, criticised it. But it is 5c to 6c lower as a result of those changes.