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Wednesday, 22 August 1973
Page: 215

Dr CAIRNS (Lalor) (Minister for Overseas Trade and Minister for Secondary Industry) - I move:

That the Bill be now read a second time.

The purpose of this Bill is to amend the States Grants (Petroleum Products) Act 1965- 1969. The Act provides the legal basis for the Petroleum products subsidy scheme whereby a Commonwealth subsidy is paid in relation to the distribution and sale of certain petroleum products in country areas. The objective of the scheme is to reduce rural costs by effecting a significant degree of equalisation between city and country wholesale prices of such petroleum products. The means of doing this is by subsidising, except for a determined margin, the distribution costs involved in moving products from bulk city installations to country points of sale. The scheme is, however, expensive and less efficient in achieving its objective than is desirable. In practice the largest pay-outs under it are made in major inland cities.

The margin has hitherto been 3.3c per gallon. In the course of his Budget Speech the Treasurer (Mr Crean) indicated that the margin will be lifted to 5c per gallon with a consequential saving in Government expenditure. Amendment of the Act is necessary to permit the new margin to be put into effect. At the same time it is proposed to revise the rates of subsidy payable in the various country areas, to take account of changes in transport and other distribution costs which have occurred since 1969, when the scheme was last reviewed. These changes necessitate amendment of the present schedule of subsidies. The Bill deletes section 6 of the Act which ties subsidy rates to circumstances as at 1 December 1969 and in general very strictly limits the circumstances in which the schedule of subsidies may be amended. As a result of this amendment of the Act it will be possible in the future to adapt the schedule of subsidies more readily to changes in petroleum marketing methods and economics. A revised schedule of subsidies is being prepared setting out subsidy rates that take into account the new subsidy margin and the updated transport and distribution costs. The new schedule will come into effect within one month of the date of operation of this Bill. I commend the Bill.

Debate (on motion by Mr Edwards) adjourned.

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