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Wednesday, 7 March 2001
Page: 25354


Mr ANDREN (10:22 AM) —In the context of the debate on Appropriation Bill (No. 3) 2000-2001 and cognate bills, I want to take the opportunity to range across a number of issues of interest and concern to my constituents in Calare. The people of Calare know that fuel prices are influenced by many factors. They include the world parity price of crude oil, exchange rates, excise rates, the GST, the various grants schemes of state and federal governments, competition factors, transport costs, and wholesalers' and retailers' margins. But they also know that, despite the historically high prices of fuel they are paying at the pump in Lithgow, Bathurst, Orange or Blayney, only 40c out of a pump price of over a dollar equates to the refinery gate price of the fuel.

It is that fact which makes it hard for them to cop the government's argument that far and away the main cause of the current high pump price is the high global price of crude oil. They know that that is one factor, but they also know that, at the moment, out of every litre of petrol for which they pay a dollar, some 48c is going in tax, be it excise or the double taxing GST on top of the excise. Motorists know that there is far more to the cost of fuel than simply the world price of crude.

When we talk about people hurting in regional Australia because of the current high petrol prices, we need to know who we are talking about. We need to remember that farmers and others in primary industries get back almost all of the tax they pay on diesel used off-road. Many who use diesel on-road get much of that back, too, through the grants scheme, and all businesses get the GST component back as a credit. People in regional Australia who are most affected by the current high prices are non-business owners, or business owners using fuel for private purposes. They are employees, pensioners, unemployed people looking for work and having to travel to do so or, indeed, to satisfy their activity test. We are talking about families who are perhaps living out of town, perhaps not, having to drive kids to school, to sport after school and to other functions.

While I acknowledge that many people in the outer suburbs of the cities are doing it tough, they at least have the option of public transport. If they have to approach eight employers a fortnight to satisfy their activity test, they can do so with a concession card and by using public transport. The only way many can do that in regional Australia is by owning a car, by hitchhiking or by some other means.

The Prime Minister's response to the petrol situation has, I am afraid, gone largely unnoticed in Calare, where fuel regularly fluctuates by more than 1.5c in a week, especially on weekends and during holiday periods. The move does nothing to fix the most common complaint of Central West motorists—that is, the huge gap that occurs regularly between the price of petrol in their towns and the price in the Blue Mountains. A cut of 1½c a litre is nothing compared to what could be achieved if only we could get to the bottom of the differential issue.

Before Christmas, petrol was selling for 15c less in the mountains than it was less than 100 kilometres away in Bathurst. The differential is now closer to 10c but that is massive compared to the 1½c cut the government has announced, welcome as it is. Motorists in the Central West of New South Wales should not be paying anything more than the extra amount it costs to transport it over the mountains. To ask the ACCC to investigate a cap on price fluctuations, as the Prime Minister has done, addresses only part of the problem. Quite frankly, I cannot see how the ACCC can have any power under the current Trade Practices Act to do something which amounts to price control.

We need to be looking at access to refineries, the price support the oil companies provide for their favourite retailers, the ability of franchisees to shop around for their petrol, and the publication or display of wholesale prices. We need to look at local competition issues, too. We should also remember that state governments can play a role in easing the pain to motorists. After all, they will be receiving about 9c a litre in GST on fuel in regional areas.

In question time on Monday, the Treasurer took us through what I guess was his view of the excise situation since 1997, when the High Court, in Ha and Hammond v. the State of New South Wales, finally clarified the scope of section 90 of the Constitution in ruling that state franchise fees on tobacco were unconstitutional. The Treasurer said that the New South Wales government is paid $707 million in revenue replacement payments, the equivalent of 8.3c a litre. Out of that $707 million, it refunds $47 million to motorists; it pockets $660 million. It has the capacity to refund the motorists of New South Wales 7.2c per litre.

Statements such as these do not appear to reconcile with the budget papers or, for that matter, with the revised GST inspired Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations. Part 2, clause 3 of that agreement says that the temporary arrangements for the taxation of petrol, liquor and tobacco under the safety net arrangements announced by the Commonwealth on 6 August 1997 will cease on 1 July 2000. What is actually happening is that, post 1 July 2000, the states are receiving an equivalent amount for excise as part of their budget balancing payments. They are not, however, receiving safety net or revenue replacement payments from the Commonwealth as the Treasurer and, indeed, the Prime Minister tried to argue this week. Last year's Budget Paper (No. 3) outlined what the safety net or revenue replacement arrangements are. At page 37 it says:

On 5 August 1997 the High Court ruling on tobacco franchise fees ... cast into doubt the constitutional validity of all State business franchise fees (BFFs) ...

On 6 August 1997, at the unanimous request of the States, the Commonwealth announced `safety net' arrangements to protect State finances. These arrangements provided for:

an increase in the rate of Commonwealth customs and excise duty on tobacco and petroleum products and an increase in the rate of wholesale tax on alcoholic beverages; and

a one hundred per cent windfall gains tax to protect the States from claims for refunds of past BFF payments.

All revenue collected by the Commonwealth under these arrangements is returned to the States (less administrative costs) as revenue replacement payments (RRPs).

Under the intergovernmental agreement, safety net arrangements will cease on 1 July 2000. However, due to a lag in collections, a small payment will be made in 2001 related to the 1999-2000 collections.

Table 16 of the budget paper sets out the sum of revenue replacement payments that would flow to the states for 1999-2000 and 2000-01. Rather than the $707 million the Treasurer is claiming has gone to New South Wales, his own budget papers say that in 2000-01 the lag payment for tobacco, petroleum and alcohol amount to just $113.8 million. Under the intergovernmental agreement the states receive all GST revenue, that is true. The Commonwealth has ceased paying financial assistance grants and revenue replacement grants, but has continued national competition payments and specific purpose payments—for example, to schools. The states will also receive top-up payments until 2003 until the GST kicks in, so they are no worse off than if the new arrangements had not been put in place.

These budget balancing payments include an amount to cover the safety net payments that would have been made if the old arrangements were in place, but the old revenue replacement payments are no more except for a small lag from last financial year. So all sides are playing with semantics on this issue. I suggest the government is muddying the water here to deflect pressure on petrol, given though that the states can have a capacity with their increased GST to look at some sort of subsidy arrangement, but that is a separate issue that can be debated. But to claim, as the government is doing, that the government is still collecting that excise and passing it on is stretching belief to the extreme.

Prior to 1 July the government was collecting 8.1c a litre in excise on behalf of the states. When the ANTS package came in the government reduced excise by 6.65c on unleaded fuel and diesel and relied on the oil industry to pass on savings of 1½c a litre so the GST need not increase the pump price of petrol. That adds up almost exactly to the 8.1c per litre the government has been collecting since August 1997 for the revenue replacement payments. The excise came off, the GST went on and all of that went to the states and the top-up payments now come from general Commonwealth revenue. Despite the semantics and the politics, I do agree with the Treasurer that the states can play a role in reducing petrol prices. Indeed, they may be in a better position to do this administratively and constitutionally than the federal government, but they can pay for this out of their growing GST revenue or the budget balancing payments, not out of the now nonexistent revenue replacement payments.

It is not only in federal financial relations that political games are being played. The Deputy Prime Minister has been doing the same thing on road funding. In a press release issued on 9 February following the Auditor-General's damaging report into the department of transport's administration of the Australian Land Transport Development Act, he claimed that since 1993-94 governments had actually channelled $2.9 billion more for roads overall since the 1993-94 period than would have been spent if only 4.95c per litre had been allocated as required by the act. In reaching the conclusion, he relied on the inclusion since 1994 of almost $5 billion in Commonwealth grants to state and local governments, despite the fact that road grants to local governments are untied, and identified road grants to state governments have been untied since 1991. He also included $435.9 million in identified road grants to the states for the 2000-01 financial year when state financial assistance grants have been replaced by GST revenue from 2000 onwards.

It may be that the government has spent money from other sources on roads, but the fact remains that the minister, not his sacked staff, failed in his reporting obligations under the act, and this failure led to road funding from excise since 1993 being some $2.9 billion less than the act requires. In the Auditor's words:

If the Minister does not formally determine the charge rate, a default rate of 4.95 cents per litre applies. The Minister has not made a determination of the charge rate since 1993-94—

which also includes the previous government. He continues:

The Act also requires the Minister to report annually to Parliament on the details of the ALTD Account including moneys credited to and debited from the Account. The ALDT Program Annual Report prepared by DTRS has not provided details of any moneys credited to the Account.

The fact is that the minister has—for whatever reasons—failed in his duties under the act and in his administration of it. Repealing that act, or whatever proposals are in train, does not alter that fact. Rather than admit the error, the minister has tried to blur the issue by cobbling up figures from other sources that may or may not be spent on roads.

I want to turn briefly to some other issues of concern to people in my electorate. Firstly, with regard to Youth Allowance and Austudy, I recently wrote to the Minister for Community Services about two anomalies in the application of these payments. The first relates to the interplay between the family tax benefit scheme and Youth Allowance. I have received a complaint from a constituent about the significant reduction in the government payments her family now receives simply because her eldest son turned 16 and so became eligible for the Youth Allowance. Prior to her son turning 16, the family received $402 per fortnight in family payments. Her son now receives $106.92 and she now receives $247.23 for her three children under the FTB. As my constituent explains:

The fact is I have lost close to $50.00 per fortnight just because he has turned 16. He is still a full time student ... he does not have a job, our income has not changed or our circumstances. He eats just as much as he did before his birthday—

probably more—

and his clothes and school requirements, cost just as much (if not more) than they did before he turned 16.

Having had over the last few years 16- and 17-year-olds growing up to 20-year-olds, I know exactly what she is talking about. The letter continues:

I find it hard to understand that at a time when you need help to keep your children in school you actually have money taken away from you.

On my constituent's behalf, I have asked the minister to explain why it is that families such as the Barrows have their payments so reduced and to outline what steps, if any, the government will take to address this anomaly—hopefully in the upcoming budget.

The second anomaly relates to lack of rent assistance for students over the age of 25 on Austudy. This was most recently brought to my attention by a constituent enrolling at Charles Sturt at the age of 25. He asked why some of his younger classmates received rent assistance under the Youth Allowance and students his age receive rent assistance by virtue of turning 25 whilst in receipt of Youth Allowance. He makes the further valid point that he would be better off financially if he were to stay on Newstart and not try and develop his skills. It seems that this treatment is clearly discriminatory, putting those over 25 at a clear disadvantage. I hope the minister will also look at this in the context of the budget.

I want to make a few brief comments on the current political landscape in rural Australia. I said several years ago, after the rise of One Nation, that the city-centric media and many politicians who use the media as their antennae had completely missed the point in seeing the political rural backlash as something fairly recent. In fact, 15 years ago, when wheat growers dumped their grain on the steps of Old Parliament House in protest at the crises—including low world commodity prices—besetting the rural sector, the issues of malaise and disconnection with the political process were very much alive. They have been simmering and boiling away ever since. Those farmers have never forgotten the words of Gough Whitlam in the early 1970s—that they had never had it so good. In the rush to deregulate services—especially banking services—political parties forgot or ignored rural Australia. Interest rates then crippled many farming families, the foreclosures began, and a change of government in 1996 brought an acceleration of the deregulatory process that had hit the region so hard.

Hansonism and One Nation were symptoms, not the cause, of that discontent. Tragically, the blacker side of rural Australia—the Port Arthur conspiracy theorists and adherents of the shadowy League of Rights—have commandeered so much of that movement's agenda. Rural voters in the main, though, have parked a protest vote with One Nation but where a viable, moderate, informed broad based option is on offer, those voters will take that course. The election of a significant number of Independents in New South Wales, Victoria, Western Australia and now Queensland suggests the vast majority of rural and indeed outer metropolitan voters are looking not for extremes but for proper representation of their concerns by people they know and trust. They also want a role for government in their lives, to the extent that such key components as financial services, transport and communications and basic infrastructure needs are provided and, where necessary, regulated.

Because so many are the aged or are low income earners, they know that a consumption tax is unfair and that it targets those with no discretionary spending. If they are in small business, they are now frustrated at being unpaid collectors of the GST. Rural dwellers—and I acknowledge the concerns of the member for Werriwa—and those in low to medium income areas of Sydney and other metropolitan areas resent the obvious and blatant tax avoidance of high-flyers and of both local and overseas companies avoiding their responsibilities. They do not believe for a moment that a GST is fair for them when income tax avoidance is still rampant and most tax reforms are seen as benefiting the top end of town. The mantra of the free marketeers and of competition policy is just not accepted by people who know Telstra is the only organisation with the capacity to provide the infrastructure necessary to deliver 21st millennium communications, and that other players will just pick the eyes out of the profitable parts of the market.

Country people realise that another one-off sale of Telstra will do absolutely nothing to meet the environmental crisis facing our farming lands and river systems. Last week a report of this parliament made some critical recommendations on ways to redress the decline in the state of our river system, including seriously looking at introducing an environment levy. Let us not be cute about it: we need a tax on every Australian to help fund the estimated $60 billion required to make a serious attack on our environmental crisis. Everyone should contribute, for we have all—in the city and in the country—benefited from the wealth generated by our rural industry.

But we must go further. We must stop the unbridled clearing of land, particularly in Queensland, that is further contributing to the degradation of our landscape. We must get serious about alternative energies, such as wind power, and we must begin to wean industry off fossil fuels. If we preach the message of global union in the marketplace then we should play our global role in meeting greenhouse gas emission targets that truly reduce our unacceptable levels, rather than skirt around the issue. We should not regard carbon trading and carbon sinks as the answer either for, after all, these only match black emissions with green credits; they do not reduce the overall black emissions.

We can no longer place the issue of the environment on the left of the political spectrum and view it as some sort of protest movement. The health of our country and planet is vital to our economic survival, and the environment portfolio should have its minister in cabinet in this and all future governments, so that the environment is given equal ranking with health, education and, indeed, the Treasury.