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Wednesday, 12 February 1986
Page: 190

Senator BROWNHILL(4.10) —If ever there was an issue that the Hawke Labor Government has been caught out on, its fuel pricing policy is it. The Federal Government and Prime Minister Hawke especially have treated the Australian public with absolute contempt.

Senator Boswell —Particularly the farmers.

Senator BROWNHILL —That is correct. The Government assumes that Australian farmers have very short memories. As Senator Durack said in leading this debate, it was Prime Minister Hawke who said in his policy speech in February 1983 that Labor would reduce the price of petrol by 3c a litre. We all know what has happened. The price since Labor came to power has gone up and up. By May 1983, barely two months after Labor came to office, it adjusted the fuel freight equalisation scheme at an estimated cost to rural producers of $10m. It increased the excise on avgas and abolished the depreciation allowances for the on farm storage of fuel. By August 1983 it had cut yet again the fuel freight scheme. The Government removed the sales tax exemptions on oils and lubricants, it increased the price of fuel by 1.5c a litre and it introduced automatic six-monthly increases in the fuel excise in line with the consumer price index. By August 1984 it had again adjusted fuel prices.

So the sorry tale has continued. The Hawke Labor Government, in its first 26 months of office, has allowed fuel prices to rise by 10c a litre and the price has continued to rise, by some 1.5c a litre in just the past couple of weeks. All this is from a government that promised to cut fuel prices by 3c a litre immediately on getting into office. Every time that the Opposition has criticised the Government for fuel price rises it has been told that it was this side of politics that tied Australia to import parity pricing. That is fair enough but if it works when the import price goes up how can this Government justify not passing on the savings when the price goes down? It is simply a matter of keeping its word-something on which the Australian Labor Party does not have a sound record.

This Government's attitude on the price of fuel was very clear in the last two election campaigns. It made it clear that it would reduce the price of fuel, that it would contain fuel prices. But what is the situation today? The price of fuel is going through the roof, as it is linked to the inflation rate that is more than double that of our trading partners, and, in addition, when the spot price on the world market drops the Australian Government refuses to pass on those savings to Australian consumers. I am glad it is the Labor Party that has to go out and tell the Australian motorists what it is doing with the money that should rightfully be theirs.

What possible justification can the Federal Government have for profiteering in such a blatant manner at the expense of every Australian motorist, be he a small businessman, a farmer or a Sunday driver. When one examines the breakdown of the cost of fuel we see the sheer desperate greed of this Federal Government. At the full price government charges amount to some 55.6 per cent of the cost of a litre of fuel and on a discounted litre of fuel it is some 60 per cent. These figures are known well to the Federal Government because in a desperate economic state such as we have in Australia at present the Federal government needs windfalls from petrol price rises to bale it out. With a current account deficit blowout of some $1,033m in December, bring the December quarter deficit to some $3,503m compared with $2,893m only a year before, with the Australian dollar slumping in late 1985 to a record low and with climbing inflation, it is ripping off the motorist to get all the help it can.

Rising fuel prices have affected very business enterprise in Australia. Even more adversely affected are those enterprises that trade on export markets. An inflation rate more than double that of most of our trading partners, appalling interest rates and intolerable and rising production costs are all combining to strangle even the most efficient producer. It is the farmer, the rural producer, who is suffering the most. Not only have farmers had to wear the increasing fuel charges but also they have had to adjust to the scrapping of the fuel freight equalisation scheme.

Senator Boswell —Around $130m.

Senator BROWNHILL —That is right, Senator Boswell. This has been estimated by the National Farmers Federation to cost the rural sector an additional $20m a year. No one ever likes a lift in costs but in the last two years farmers have had to accept increasing costs in all areas of their production while at the same time accepting less and less for their produce. No one in this chamber could have missed the forecasts of the Government's own body, the Economic Planning Advisory Council, for the rural sector. It estimates the real value of Australia's rural products will drop by up to 25 per cent in the current financial year-to the second lowest level in 30 years. One-third of farmers surveyed by the Bureau of Agricultural Economics are estimated to have had negative incomes during 1984-85. Nearly every major rural industry in Australia today is in trouble, be it wheat, dairying, sugar or coarse grains; they are all in trouble. Their problems in July last year were so severe, so devastating and so threatening to our economy that over 100,000 people involved in those industries took to the streets of cities around Australia to demonstrate-a most uncharacteristic thing for the farming community to do.

At the biggest rally in Canberra our Prime Minister, Mr Hawke, called the farmers `my friends' and promised them there would be relief but they just had to be a little patient. They were patient. The August Budget came and went without any relief. Overseas borrowing statistics came out and they were up but again the farmers were patient even though their position was worsening. Then interests rates took a swing upwards. There were hints, however, that interest rates would fall if the balance of trade figures for December were good. They were not, so interest rates stayed up. Again farmers were told to be patient. The dollar started to rally and world oil prices started to fall. At last, thought the farmers, here comes the relief. But no; oil prices have gone up and the headlines in last Friday's Australian offered: `PM hints rural fuel bills to be cut'. It has not happened yet. I have not seen it.

The Prime Minister hints that farmers might get a few crumbs from the king's table. It seems only now, when farmers' frustrations have been turned into electoral losses, that the Prime Minister is prepared to give some consideration and look at the rural crisis. What is he offering farmers? A real cut on one of their major costs? We do not know. We have to be patient. We have to wait for the right media moment before farmers around Australia can find out whether there really is some light at the end of the tunnel. I only hope that the tunnel is not repossessed before the light starts to shine through. If the Australian newspaper is to be believed, the Prime Minister in a secret but coincidentally photographed and televised trip to the bush told a farming couple at Cowra that they could expect a slight reduction in fuel prices for farmers. As the farmer in question, Mr Gary Bruehm, said: `To be honest, I questioned why he came. We are certainly no better off.'

Fuel is one of the major costs for rural producers. It ranges from 5.7 per cent of the total cost for a pig or poultry producer to over 10.3 per cent on a cereal/oil seed property. Converted to dollars, it adds up to something over $600m a year spent by farmers on fuel. It is therefore a major concern for them. Prices for country producers in the New England area-an area in which I live-are probably typical of rural New South Wales. In this area fuel has risen by over 13c a litre for petrol and over 12c a litre for diesel since December 1982. In December 1982 the price of petrol was 40.56c and diesel was 44.06c a litre. By February 1986 these figures had become 57.01c for petrol and 52.89c for diesel. In the last two weeks, at a time when world prices have gone down, farmers in this area and throughout Australia have suffered another rise of 1.5c a litre. Where is the justice? The Bureau of Agricultural Economics has prepared an interesting table of what savings could be made per farm and fishing enterprise if the price of fuel dropped by 7c a litre. I seek leave to incorporate the table in Hansard.

Leave granted.

The document read as follows-


Type of Farm

Savings in


(7 cents/

litre fall)

Per Farm



Sheep farm...



Beef only...






Wheat only...





















Total farms...


Fishing Industry...


4 400

per fishing


Total rural sector...



A 7c per litre cut in fuel prices will save fishing enterprises (individual boats) the following amount per year.






enter- prise



South East Trawl...



East Coast Prawn Trawl...



Southern Blue Fin Tuna Fishery



Northern Prawn Fishery...



Total savings in the fishing industry per year $10m.

Source: Table 7, BAE Submission to the IAC on Petroleum Products, December 1985

Sentor BROWNHILL-The table shows that savings of over $130m could accrue to rural industry if a 7c price drop per litre were to occur. For the wheat industry it would mean an average saving per farm of $1,680 a year. For those engaged in fishing, it would mean an average saving of some $4,400 for every boat and a total of $10.1m for the industry. These are substantial savings for primary producers.

It is strongly rumoured that petrol prices in farming states in America have already dropped by 20 per cent. According to a National Farmers Federation submission to the Prime Minister, American farmers are already benefiting to the extent of paying 31 per cent to 55 per cent less for their on-farm diesel and 26 per cent less for their petrol than we are paying at this stage. If their prices are reduced even further it will make Australian farmers even less competitive. This Government must realise that we live in an export economy. To survive we have to be competitive with the rest of the world. The Australian newspaper, in its editorial on 29 January, said:

The Hawke Government knows that our precarious balance of payments position can only be rectified if it can successfully tackle the deepseated problems of our export industries . . . it is therefore regrettable to see . . . Mr Hawke . . . about to embark on a new economic path that will see our farmers and many businesses that are leading consumers of petrol . . . paying more for their petrol than they should. We do not have our priorities in order. We are not conducting ourselves as exporters.

The Queensland Government also realises that the Federal Government does not have its priorities right. A report in today's Brisbane Courier- Mail indicates that the Queensland Government is preparing Federal Court action to force fuel price cuts. Thank God for Joh. But, as Senator Chaney expressed so clearly yesterday, and as the Courier-Mail says again today:

It is clear that the Government's revenue position is extremely tight and the Government feels it must keep the revenue from the crude oil levy to fund its tax cut promises.

There in a nutshell is the Government's dilemma. It is finding that its pigeons are coming home to roost. We are having one broken promise after another. While this Government is fiddling, the rural industries of Australia are collapsing. Rural Australia not only needs these fuel cuts, but it must have them and also others to survive. Let me use another couple of quotations from the past. The first comes from Bill Hayden. In 1980 he said:

Our policies guarantee that petrol will be cheaper under a Labor Government.

Paul Keating, our supposedly esteemed Treasurer of the day, said on 5 March 1982:

Government policy ties Australian petrol prices to the price of crude oil from Saudi Arabia. Any fall in that price must be passed on to the Australian motorist in lower petrol prices.