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Monday, 7 November 2005
Page: 13

Mr MICHAEL FERGUSON (1:16 PM) —I rise to address the private member’s motion moved by the member for Holt which, in some part, has merit and, in others, is fairly rhetorical. I think that is a fair comment to make. While we all have a good deal of sympathy for consumers—everyday people who have faced enormous price rises over recent years at the fuel bowser—like the member for Bowman, I have a concern that the private member’s motion has a large element of naivety to it. However, it is valid to have concerns, and we ought to be doing all that we can to ensure that a fair price is being charged and paid.

I note that a recent Sensis consumer report showed that, in fact, petrol prices are at the very top of the list of concerns of Australians, even ahead of terrorism, the health system and the environment. Fifteen hundred Australians were surveyed in late July, early August and the report found that people are not anticipating any petrol price relief in the near future, with half of those people surveyed expecting to spend more on transport costs in the coming year.

Interestingly—and this is highly relevant to me in my role as an advocate for the people of Bass—the report also found that Australians in rural and regional areas are more concerned about petrol prices than even their city counterparts. That is easily explained, first of all, by an easily obtained differential between prices in the city and the bush and by the fact that people outside the cities have to, by the very nature of where they live, travel longer distances. Of course there are then the implications of freight costs impacting much more on regional areas.

No-one gets any joy from higher fuel prices, but it has to be said that the price of petrol and diesel in this country is determined largely not by local factors but by the global price of oil which, as we know, in recent times has reached an all-time high. Even the Australian Labor Party has acknowledged that fact. Like the member for Bowman, I read with interest the member for Rankin’s contribution on 4 July, where in his article headed ‘Snake oil is solution to high fuel prices’, he stated quite categorically something which is a matter of fact—that Australia’s record petrol prices have one cause and one cause only: high world oil prices.

Record oil prices are due to a range of factors, including increased global demand, about which we have already heard; diminished worldwide production capacity, which is not being taken advantage of; a lack of crude-refining capacity and of course hurricanes Katrina and Rita, which many of us in this part of the world perhaps do not appreciate but which have had a major impact on the supply opportunity for oil.

It is also interesting to note—and I congratulate my colleague on raising this matter—in the recent monetary report that 62 per cent of demand for oil on this planet comes from just two countries: the USA and, more notably, China. The demand for oil from China, China being an economic tiger, is pushing supply to its very limits. That has the natural result of pushing up prices. Despite all of these factors—and this will come as no comfort to everyday consumers—relative to other OECD countries Australia is ranked fourth lowest for petrol and fifth lowest for diesel prices. The most recent figures which have become available from the International Energy Agency—an autonomous arm of the OECD—show that the post-tax retail price of petrol in Australia is very low. In the March quarter of 2005, by comparison, the average price of petrol per litre, in Australian dollars, was $1.95 in the UK; $1.44 in Japan; $1.85 in Germany; and the bargain basement price of just 66c in the USA. Having said that, Australia still has one of the lowest pre-tax petrol prices in the OECD.

In closing, I wish to point out something I mentioned earlier—that is, for every one cent increase in petrol prices, the states in Australia reap a dividend of about $18 million. Were the other states to follow the example set by the Queensland government in offering an offset from its GST bonuses, fuel prices around Australia would fall by as much as 8c a litre. (Time expired)