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Tuesday, 25 November 2003
Page: 17956


Senator O'BRIEN (9:36 PM) —It is interesting that the Democrats apparently do not support ethanol fuel labelling.


Senator Allison —We do; we just do not want it without the others.


Senator O'BRIEN —Senator Allison said, `We do,' but I interpreted the latter comments of her contribution to suggest that amendments that were going to be moved were actually to replace an ethanol-labelling regime with a star-rating regime. Perhaps I misunderstood—the Hansard will show. You either support labelling to let consumers know that the fuel they are purchasing contains the additive ethanol or you do not. The ALP supports it wholeheartedly. We support consumers' right to know; we support consumers' right to be able to assess the fuel that they are putting in their car where there are issues as to whether the consumption of a particular fuel—in this case, fuel that contains a proportion of ethanol—will possibly render their warranty void. The ALP believes that consumers deserve to know whether they are taking such a risk, and that is why we will support labelling. I am surprised that the Democrats have adopted a Jekyll and Hyde position on ethanol labelling—they support it but they do not want it—or perhaps it is just a confused position.

Ethanol blends, it was suggested, cannot damage cars. That is neither the position that the motor vehicle industry has advised the opposition nor the position that they advised the government, as I understand it. The automotive industry in Australia is very clear—it is on the record. It has taken the position that unregulated quantities of ethanol in motor vehicle fuel in excess of 10 per cent can cause damage to some vehicles. It is interesting to note that one of the examples used by Senator Allison in her contribution was Brazil and the fact that in Brazil much higher concentrations of ethanol are found in fuel. That is convenient for that country, where a great amount of ethanol is manufactured from sugar cane and sugar cane waste.

The fact of the matter is that one Australian manufacturer, General Motors-Holden, exports a Commodore vehicle to Brazil. But the vehicle they send to Brazil is modified to cope with quantities of around 20 per cent plus of ethanol. It is not the same vehicle that is sold here for the fuel that is generally sold in Australia and, as I understand it, General Motors do not sell that modified vehicle in Australia. If that vehicle were commonly available, it would be appropriate for the automotive spirit sellers to sell a higher blend—with notice, of course, to the motorist that they would be purchasing the petrol with perhaps a 20 or 30 per cent ethanol blend.

The issue for the opposition is that the motorist knows that the fuel they are purchasing contains an amount of ethanol or no ethanol, depending on their wish, and that they make an informed choice. We would take quite a different position from the Democrats in that regard. I also understand that, in the past, the ACCC has commented on the fact that it is inappropriate for motorists to be purchasing fuel with a higher quantity of ethanol in the fuel where they may be taking, unwittingly, a risk of voiding their warranty and that they should know as a matter of consumer right the volume of ethanol that is contained in the fuel. So we would differentiate ourselves from the Democrats in that regard.

The handling of this bill by the government is just another chapter in the pattern of deceit of the Howard government on ethanol policy. The first act of deception occurred on 17, 18 and 19 September last year when the Prime Minister told the House of Representatives that he did not meet with the Chairman of Manildra, Mr Dick Honan, prior to the government's announcement of its Manildra-friendly ethanol package on 12 September. We know, through the release of a meeting record that I obtained under freedom of information, that Mr Howard and Mr Honan did meet on 1 August last year.

That was a meeting that Mr Howard wanted to keep secret. It was only revealed upon the release of the small number of heavily censored documents from the Prime Minister's department under freedom of information. The record of the meeting shows us that the Prime Minister and one of the coalition's biggest donors, Mr Honan, discussed just two matters. One topic for discussion was so sensitive that the Department of the Prime Minister and Cabinet has refused to disclose its nature. The second matter was the ethanol industry. What did that discussion include? According to the meeting record, the Prime Minister and Mr Honan discussed:

... the payment of a producer credit to ethanol producers to enable Australian ethanol producers to compete with cheaper Brazilian product.

A production subsidy and industry protection are exactly what the Prime Minister delivered to Mr Honan and Manildra six weeks after that meeting took place. The Prime Minister has run a rather flimsy argument that a reference to competition from cheaper Brazilian product did not mean that they talked about Brazilian imports. It begs the question: how does cheaper Brazilian product become a competitive item if it is not imported into this country? Does the Prime Minister seriously expect the Australian people to believe that he had a discussion with Mr Honan about competition from cheaper Brazilian product but not Brazilian ethanol imports? That just does not ring true. That is just an impossibility.

It is not just the Prime Minister who has bent the truth on ethanol; it is endemic to this entire government. The Howard government appears prepared to continue this deceit through their arrogant failure to comply with a Senate order for the production of documents related to ethanol policy—that order falling due on 21 October last year. On 21 October the Manager of Government Business in the Senate, Senator Ian Campbell, told the Senate that the government would comply with that order. It did not happen. On 12 December last year, Senator Ian Campbell gave another commitment to the Senate. At that time Senator Campbell told the Senate that the minister, Mr Macfarlane, was happy for him to commit to tabling the documents out of session on the following Tuesday.

But on 5 February this year, Senator Ian Campbell told the Senate the government was seeking to conclude its consideration of the documents and that the government would respond as soon as possible. For more than a year the Howard government has continued to defy the Senate and has not complied with the return to order. I do not hold Senator Campbell responsible for deceiving the Senate. Clearly he was acting under instruction from Minister Macfarlane or perhaps even the Prime Minister. In fact I feel some sympathy for Senator Campbell. I expect his advice to the Senate and private advice to me was given in good faith.

The fact is that the pattern of deceit applies not only to what this government tells the Australian people but also to what they tell each other. Clearly for the Howard government, anything, even the public humiliation of Senator Ian Campbell, is worth it to keep the truth of the government's ethanol policy from the Senate and the Australian people.

The deceit I find most offensive is that perpetrated on struggling sugar farmers. The National Party, including Senator Boswell, the Deputy Prime Minister, Mr Anderson, and the agriculture minister, Mr Truss, have repeatedly told the sugar industry that the Howard government's ethanol policy will be the saviour of the sugar industry. This defies logic. The Howard government's ethanol policy was devised to do but one thing. It was devised to support Manildra, Australia's near monopoly grain based—not sugar based—ethanol producer. The last time the government released details about this matter, Manildra was receiving 96.1 per cent of the Howard government's ethanol funding, amounting to nearly $30 million in taxpayers' money per year. The National Party are treating Australian sugar farmers as mugs, expecting them to believe the Howard government designed its ethanol policy with them in mind.

What the sugar industry needs is the $120 million sugar restructuring package promised by Mr Truss over a year ago. This is a package that has so far delivered only $20 million in income support, a package which is currently $100 million short of the promised expenditure, and a package which to date has delivered not one red cent of Mr Truss's centrepiece $60 million program for regional adjustment, diversification and industry rationalisation. The contempt with which Queensland National Party members and senators treat the proud sugar industry is staggering.

Finally, the Minister for the Environment and Heritage, Dr Kemp, has joined in the Howard government's deceit over ethanol. Dr Kemp has claimed that Labor has delayed the introduction of labelling for fuel ethanol blends and other blended fuels by referring this bill to a Senate committee. This is just further evidence of another Howard government minister playing with the truth, looking for scapegoats and taking the Australian people for mugs.

This legislation is necessary because some unscrupulous fuel outlets have been caught out selling fuel blends containing more than 20 per cent ethanol—way above the generally accepted safe limit of 10 per cent so far as Australian motor vehicle manufacturers are concerned. The Howard government could have moved last year to introduce a labelling and blend cap regime that would have brought this practice to a halt. But the government delayed doing so to protect the business interests of the Manildra Group. This delay has led to massive damage to consumer perceptions of ethanol as a fuel, and it means the Howard government has done more damage than any other organisation or individual to the future of the Australian ethanol industry.

Labor announced its position on ethanol caps and labelling in September last year, a policy position supporting a blending cap of 10 per cent and mandatory labelling of ethanol in petrol where content is five per cent or more. We did so because we believe ethanol deserves the chance to build a self-sustaining future, and the only way for this to happen is for Australian motorists to know what they are buying and therefore enjoy some confidence in the product they are pumping into their vehicles. Nearly three months after Labor's policy announcement Dr Kemp promised to introduce nationally consistent labelling legislation by February 2003, saying:

If the States do not move immediately to institute this labelling the Commonwealth Government will introduce legislation when parliament resumes to give it the power to require all petrol retailers to label ethanol content of their petrol at the pump.

It is unclear why Dr Kemp thinks the states should bear the burden of what in this case is a federal responsibility and clean up a mess of the Howard government's making.

On 19 February this year Dr Kemp declared an intention to take action on this matter. Nearly nine months after Labor released its policy, six months after Dr Kemp's first announcement and four months after his second announcement, Dr Kemp finally kept his promise and introduced the enabling legislation in the other place on 26 June, the last sitting day of the winter session. Dr Kemp knew that introducing the bill when he did meant that the legislation could not be considered by parliament until it resumed on 11 August, some six weeks later. Labor believes the draft regulations and details of the labels are vital for the parliament to understand the labelling regime this legislation will put in place. Labor has long called on Dr Kemp to make draft regulations available to be considered by the parliament at the same time as we are considering the bill.

Prior to the recent Senate committee inquiry into this bill, the committee discussed the benefit that would be derived from access to draft regulations and labels. To this end, the chair of the committee wrote to the minister requesting the release of this information. Despite the committee's formal request, the minister refused to make draft regulations or proposed labels available to the committee. And, despite the fact that Dr Kemp's department has been working on the bill since January this year, the department advised the recent Senate inquiry that it has not been instructed by the minister to prepare draft regulations. What a go-slow. The department further advised that, once instructed, it could provide draft regulations very quickly.

Given that the department advised that it could quickly produce draft regulations and labels once instructed and that, to date, it has not been instructed by the minister to do so, Labor is compelled to conclude that the minister wishes to delay the introduction of a national mandatory labelling system. Labor strongly supports the implementation of an effective labelling regime to protect the rights of consumers and to rebuild confidence in ethanol. It is consumer confidence, above all else, that will ultimately determine the future of the Australian ethanol industry. Labor renews its call for the minister to immediately release the draft regulations and proposed labels and, if he has not done so, to direct the department to prepare those draft regulations and labels in order to expedite the introduction of mandatory labelling of blended fuels.

We will be supporting legislation to give the government power to provide for labelling of ethanol. Labor believe that ethanol does have a future as a component of the fuel systems of Australian vehicles and for other uses. It should be remembered that the ethanol industry as it exists today was substantially created by the ethanol bounty—a bounty created by the previous Labor government. It was a bounty that this government removed in 1996. As I recall, the first question I asked in this chamber was to the government in relation to the withdrawal of the ethanol bounty, and, as I also recall, the Democrats were appreciative that Labor were raising the issue at that time. I hope they appreciate the stand that Labor take now. I hope the Democrats do come to their senses and support a labelling regime for ethanol, and realise that the future of the ethanol industry is tied up with Australian motorists having confidence in it.

Australian motorists will not be hoodwinked again into using a fuel in which they have no confidence. They need to know what they are putting into their cars, they need to know what effect that fuel is going to have on their motor vehicle warranty and they need to know that they can be confident in consistent product being delivered. Australian motorists want the sort of regime where there is a 10 per cent cap on ethanol until appropriate vehicles are available in this country. We believe that, firstly, this legislation needs to be carried and, secondly, we need to very expeditiously see the regulations. Thirdly, we need to see labelling in place so that the ethanol industry can become the industry it can be for this nation and so that those regional parts of Australia that consider they have prospects in manufacturing ethanol can develop their industries with that certainty.