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Wednesday, 10 May 2000
Page: 16222


Ms LIVERMORE (6:36 PM) —I will be supporting this fuel sales grant legislation, paltry effort though it is. I will also be supporting the amendment moved by the member for Wills earlier today. His amendment makes very valid points about the glaring holes in this legislation and the protection that it fails to offer motorists in regional Australia. The Fuel Sales Grants Bill 2000 gives me the opportunity to speak on this issue, which is very important to my electorate. Petrol prices are very high in Capricornia. It is almost getting to the stage where it is a fact of life in Central Queensland. It is something that people grimaced and joked about for many years, but in the last year things have become drastic with quite major price hikes.

Throughout this debate, people have come in here and said that prices are high all over this country, and I do not doubt that. But the thing that really gets to people in my electorate in Central Queensland is that there seems to be no good reason for petrol prices to be as high as they are around CQ. The prices are just so much higher than comparable centres throughout provincial Queensland. Earlier this year, the RACQ conducted a survey and that survey was reported in the Courier Mail. It showed that Rockhampton had the highest petrol prices of any of the provincial centres in Queensland. It raises so many questions and is very frustrating for the people of Central Queensland that this is the case. There is just no obvious reason for us to be so out of sync with other comparable regional centres. You cannot explain it away in terms of transport costs. What it really comes down to—and I get this from speaking to the servo owners in Central Queensland—is the opportunism of the major oil companies. Effectively, we in regional Queensland subsidise the discounting that goes on in the metropolitan areas and in the higher volume sites in Queensland. That whole pattern of us in the regional areas not being profitable enough and not being attractive to big companies is hardly a new thing when we see banks and other services closing down at the same time as petrol prices rise.

There is no real reason for the discrepancy in prices that we suffer in Central Queensland, except for the market forces within the fuel industry, which contribute to that unfair playing field. Incidentally, in the article in the Courier Mail, the RACQ is quoted as attributing the high prices in regional Queensland and also the city-country differential that exists to the federal government's deregulation of the fuel industry. That comes from the RACQ, not me. The price of petrol is the biggest issue for people in Central Queensland. It is literally the kind of issue that people stop to talk to you about in the supermarket or in the street. It especially happens when people have just come back from a trip to Brisbane, where they bought fuel 10c a litre cheaper than it was in Central Queensland. That concern is understandable, because the high cost of petrol in Central Queensland combines with the distances that people in my electorate have to travel for a lot of their basic services and activities.

It is quite common for sporting teams in the central west or in the mining towns in Capricornia to travel up to 2½ or three hours for their kids to play a game of sport at weekend fixtures. The same sort of thing happens when schools in the smaller towns have students travelling one to 1½ hours between schools so that they can broaden the curriculum that is available to them and the students do not miss out because they are at a smaller school. It is the same for health services. It is very common for people to travel from Longreach or Barcaldine into Rockhampton or from the mining towns into Mackay. Travel is a big part of life in my electorate. The cost of petrol comes into everything that happens in my area. For example, a few weeks ago I met with some community groups. Invariably, the community groups in the rural areas of Capricornia have extensive outreach services, so the workers are always in the car. They are delivering those services and covering a large area. The higher petrol costs are really eating into the small budgets of those organisations, those budgets that are very squeezed, and are of course impacting on the services that they can provide.

The problem of high petrol prices is nothing new in rural and regional Australia. What would you expect a government confronted by this problem to do about it? I guess the last thing you would expect would be for that government to add another tax to it, but nothing surprises us anymore after the whole `never ever' deal that we have seen over the last couple of years. So many promises were made by this government on the GST before the last election, and so many of those promises have been betrayed. We do not have to stretch our memory very far; let us just think back to last night, when the budget was handed down. The inflation figure that was supposed to be 1.9 per cent as a result of the GST we now find out is forecast to be 6¾ percent. The second point is that the income tax cuts that this government boasted about so much before the last election will be eroded after just one year. Of course, as we always expected, the GST compensation is going to be hopelessly inadequate.

One of the big government promises that I kept a close eye on when I was campaigning at the last election was on the impact of the GST on petrol prices. The people of Capricornia and indeed the rest of Australia were made promises in respect of petrol prices in the tax package, which said:

At the time of the introduction of the GST, the government will reduce excise on petrol and diesel so that the pump price for these commodities for consumers need not rise.

We were all quite relieved about that. The Prime Minister added to that on 26 August, saying:

The price of petrol at the bowser will not go up. The excise will come down by the amount that is the equivalent of the GST and the price will not go up one cent at the bowser.

The Treasurer's formula that was supposed to achieve this protection for consumers was to take 7c a litre off petrol and then add the 10 per cent GST. What we have seen unfold over the last year is a fairly familiar pattern to us. First of all comes the big claim about how fantastic the government policy is going to be, then the government gets caught out by the figures not really adding up and then you see this policy scramble, where the government plays some catch-up to cover its tracks. The interesting thing is that this happens so often when it comes to matters affecting rural and regional Australia. I say it is interesting, but it is not surprising because rural and regional Australia is just not on the government's radar screen. If you never spend any time thinking about the needs and issues of rural and regional Australia, it is hardly surprising that you might overlook the issues that exist in that area.

It did not take long after the election for the Treasurer's promise to regional Australia on petrol prices to unravel. The formula that swaps excise for GST only benefits motorists while petrol is under 77c per litre. It went through that level in Rockhampton about a year ago, and it was over that mark in the rural parts of Capricornia even at the time of the last election. This was not a big secret that the Labor Party cooked up to try to catch out the government. It has been there for the government to see for years. According to a quick ring around for today's petrol prices in Capricornia, Rockhampton is charging 86.9c per litre, Barcaldine is selling petrol at 89.9c per litre—and I am advised that that will be rising by 2c overnight—and Moranbah, in the mining region, has petrol at 85.9c per litre. That is a fairly high volume site, so that does keep the price down a little bit there.

There is no doubt in anyone's mind at this point that the government had not given a thought to the impact of the GST on the bush and to the fact that petrol prices were set to rise even higher in CQ as a result of the GST. This did not seem to worry the Treasurer too much. Basically, he gave away the promise pretty quickly on the Sunday programearlier this year when he said to Laurie Oakes, `Yes, there was a promise, but there were limits on that promise. It is only the bush, after all. They're used to getting done over, so we are not too worried about that.' Finally—and I guess members of the government have to get some credit for this—the heat got too much for the Treasurer and he announced his scheme to offset the impact of the GST on petrol prices. He announced the scheme, and we now have the bill going through the House. But there are still many question marks hanging over the scheme. The first fairly obvious question that is not really answered in the bill is: how is the scheme going to work? Sure, grants will be made to retailers on a tiered basis in eligible areas. Of course, that raises the obvious question of what areas will be eligible. The bill does not tell us that, and the government has not told us that yet—with only 52 days to go, as they keep reminding us, before this actually comes into place

Service station owners in my electorate, like most of their colleagues in small business, are yet to finally get the full understanding of how the GST is going to affect their businesses. They are finding it difficult to get the information they need, the detailed information they need, from the tax office and from the government about the GST. When I go and show them this bit of paper and say, `Here is another thing that you have got to work out before 1 July, but you cannot really work it out from this bit of paper anyway because the government still has not figured out how it is going to be put into place,' they are going to be thrilled.

The other very important question is: will this scheme work? The answer to that at this stage is: who knows? The digest prepared on the impact of this bill is fairly sceptical, and why wouldn't it be? It says:

With the relatively small amounts per litre to be provided under this scheme in relation to the total and, more importantly, the current variations in the price of petrol, it is difficult to see it having more than a marginal effect on the price a motorist pays for petrol.

It goes on:

Other than the fulfilment of what has become a highly sensitive commitment, it is difficult to see any aim in this scheme.

The service station owners are going to be thrilled about implementing this scheme that has no details, does not actually achieve anything for their customers and is just more complexity at this difficult time in their business operations.

The third question is: why do we need this scheme in the first place? We need it because of the government's GST—only 52 days away. The government is really kidding itself if it thinks that people are going to be out there cheering about this. It is not a benefit; it is basically a scheme to try and offset the difficulties and impact of the GST. So this scheme, such as it is, does nothing but introduce more complexities for retailers at a time when they really do not need it, and it offers no guarantees to motorists. If we needed that spelt out any clearer, the Minister for Financial Services and Regulation obliged us in the House yesterday by being able to give no guarantees to us, as consumers and as representatives of consumers, that the government has a foolproof system in place to prevent and stop price exploitation following the introduction of the GST and this associated scheme. There is no confidence out there—and, I would suggest, no confidence in here—that this initiative will reduce petrol prices in the real world where it will count.

I owe it to the motorists in Central Queensland, who are struggling under the weight of high petrol prices already, to support any measure that will bring down the cost of petrol for them. That is why I seconded the member for Hunter's private member's bill, which seeks to open up the fuel industry to more competition at the wholesale level. That proposal suggests that we allow retailers to buy up to 50 per cent of their fuel from suppliers other than those they are contractually connected to. The ALP has the support of my local servo owners for the proposal. They would like to be able to shop around for the petrol they sell so that they can reduce the cost to motorists and at the same time run their businesses profitably. Those service station owners talk to me regularly, and they know the flaws that exist in the fuel industry and see the opportunities that are possible under the shadow minister's proposal. In my area, you only have to go a few hundred kilometres up the road from Rockhampton and there is a service station operating there that sources its fuel from a supplier independently, and the prices are significantly cheaper. The private member's bill is not pie in the sky. The operators in my area see it working in practice every day. The service station owners certainly do not want the government's continued push for further deregulation through the repeal of the sites act. With the repeal of the sites act we would see what has happened in so many other industries in this country. It would basically mean the big oil companies would be able to pick the eyes out of the market in a place like Rockhampton. They would be able to put small owner-operators out of business but would do nothing to improve competition where it is needed in the rural towns.

As I said before, I will support anything that means lower petrol prices for people in Central Queensland, but this flimsy proposal is not enough to hide the facts. This is needed as a result of a broken promise by the Prime Minister and his government. It does nothing to eradicate the city-country differential that is the source of so much anger and frustration in Capricornia. This scheme is nothing for motorists to cheer about, because the government is simply putting up petrol prices by imposing the GST and then hoping that this scheme, which is costing the budget $500 million, will alleviate the damage a bit. I have never heard of anything more ridiculous and more inefficient. My message to the government on behalf of the motorists of Capricornia is: scheme, no scheme; GST, no GST—we want cheaper petrol prices, and this had better work.