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Wednesday, 13 June 1984
Page: 2951

Senator WALSH (Minister for Resources and Energy)(6.05) —The Government, naturally, will oppose the amendment. The substance of Senator Chaney's argument is that for a period the Government allowed an 'excessive' price to be charged to Australian consumers by Australian producers. Given the way that Senator Chaney has defined his terms, that is a reasonable comment and he said that that is unfair. However, by the same yardstick which he has used for what is a proper price-that is the export parity price-it is also correct that over the three previous years Australian consumers of all types of liquefied petroleum gas were receiving an implicit subsidy from Australian producers because the pricing arrangements applicable at that time kept the price artificially low, that is, below the export parity price at the time. This occurred because there was a linkage to crude oil prices and consumer price index movements. I forget the precise details. I am advised that over that period there was an implicit subsidy of about $35m from Australian LPG producers to Australian consumers, assessed again on the pure opportunity cost principle of export parity.

In the three early months of this year, according to the analysis which Senator Chaney has decided to use, there was a subsidy in the opposite direction-I do not have it quantified-of, I think, the order of $12m. So over the long term it can still be argued, given Senator Chaney's assumption that the export parity price is the right and proper price to use and the price which should be charged , that Australian consumers have still received some small concession at the expense of Australian producers. For that, among other reasons, the Government will oppose the amendment. However, in view of the time constraints and since the Australian Democrats have expressed their support for the amendment, it is clear that it will be carried and I shall not be calling for a division.