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Monday, 11 September 2006
Page: 90


Senator JOYCE (6:17 PM) —We just heard a fascinating speech from Senator Sterle—in fact, I felt like checking what we were talking on; it sounded like we were about to move a mandate on ethanol, for which he would have had my support. But he was not. Although he gave a fascinating speech, we are actually talking here today about the Petroleum Retail Legislation Repeal Bill 2006.

I want to pick up on a couple of points of Senator Sterle’s before we go much further. He talked about his overwhelming support for the biodiesel industry—no doubt in Western Australia there is a lot of support for the biodiesel industry. I remember Labor frantically knocking down our doors a few months ago asking for support for the biodiesel industry. However, what surprised me then, after Senator Sterle’s comments, was the way the vote went in the chamber. The only people who actually supported a move to assist the biodiesel producers of Western Australia were me and a senator from the Democrats. Senator Sterle actually voted to get rid of the biodiesel industry in Western Australia. We should put that back on the record, because he seems to be getting a bit shifty. He has been here for a little while, and he is getting a bit shifty now. He wants to ride both sides of the fence.


Senator Sterle interjecting—


Senator JOYCE —You were not in the chamber?


Senator Sterle —I was in the chamber; you weren’t.


Senator JOYCE —I was in the chamber. It is on the record—as is your vote against biodiesel, Senator Sterle. He also came in and gave a great hoorah about where we are at with ethanol. I can assure you that a mandate on ethanol is National Party policy. If you are about to join us in that push, I welcome you. You will have a lot of support on that day. That would really check your colours on the other side of the chamber. We would see whether they are going to walk the walk or whether they are talkers. They look like talkers over there—they are not really serious about it—but I would welcome them. If they want to come out of their burrows and be fair dinkum about supporting the ethanol industry, I challenge them. You must be getting up through the ranks of the Labor Party right now, Senator Sterle. I challenge you to go to your caucus and say, ‘Let’s get fair dinkum about this. Let’s move a mandate,’ because they will not. They have not quite got the ticker for that. They have the ticker to talk, but they do not have the ticker to walk. That is the difference.

But it is encouraging. It was a marvellous little excursion into the facts. I agree with much of what Senator Sterle said about the trade deficit, the benefits of getting an alternative fuel and the problems we could have on the Strait of Hormuz, and no doubt other parts of the world as you so choose. I have no problems with that—you are probably telling the truth on all of those issues—it is just that you do not want to do anything about it. The option is there for the Labor Party—if they want to do something about it—to come out and say they are going to mandate ethanol. I will support them, but they will not do it.

But let us go back to what we are actually talking about. We are talking about the Petroleum Retail Legislation Repeal Bill 2006. It looks like the Labor Party will support it, so we can basically say from that that the legislation will go through. A key issue here is that, in 1980, when this act was brought about, they passed it because they had a belief in the participation in the retail of fuel by a wider section of the community. That sentiment was true in 1980, and it is true now. There should be a wider participation in the wealth that is generated from the retail of fuel.

It is true that Coles and Woolworths have circumvented that over a period of time, and that issue does need to be dealt with, but we are not dealing with it through this legislation in this form. There has to be an amendment brought into this legislation that protects independents in the market. Independents must be protected. Why is it that, with this piece of legislation going forward, we have said that Coles and Woolworths have circumvented the intent of the 1980 act, but instead of dealing with the problem, which is the circumvention by Coles and Woolworths, we are going to bring about a piece of legislation that is going to put the independents out of business? Why is that? How did that come about? Surely, if it was true in 1980 that it is good to have mum and dad businesses, a wide participation in the retailing of fuel, it would be as just and as good now to have a wide participation in the retailing of fuel. Why aren’t we amending this in such a form as to allow a remnant participation by independents in the market? We have heard from Senator Sterle, from the Greens and from a whole range of people how the independents are instrumental in bringing about price discounting in fuel and how the independents are instrumental in bringing about fair competition in the market, in keeping the others honest. But there is nothing in this legislation that actually protects them, and that is a concern for me.

I will be moving an amendment that will quarantine a section of the market for independents. It is as simple as that. Why? Because it is inherently good for Australia. It is inherently good for the market. It stands to an ethos that I have believed in since I gave my maiden speech—that is, an overcentralisation of any market is bad policy. It is bad for the freedom of this nation. It is ultimately bad for the consumers. When you have an oligopoly relationship, as we obviously have in the oil industry, the government has to step into the fray and promote legislation to protect them. The issue is basically how we go about it.

We have heard from the Labor Party. They have talked about the Dawson recommendations, and everybody is in furious agreement. Everybody agrees that we have to go somewhere with the Trade Practices Act. I hear that, but what are we going to do with this piece of legislation, right now, that is going to protect the independents in the market? It is one of the fundamental things when you drive up the road when you are campaigning in Queensland. You stop at a service station, you walk in and you ask: ‘How are you going? What can I do to help you?’ They almost knock you over by saying: ‘What you can do to help me is allow me to buy fuel at the price that that service station is selling it at. That’s what you can do for me. If you can help me buy fuel at the price that that service station is selling it at, you’re going to allow me to stay in business.’ When people say that, it hits a chord with you, and you think: ‘Well, I should go about trying to assist those people to stay in the market.’ In going forward during our Senate campaign some two years ago now, it was a fundamental driver to try and make sure that we keep the wide participation of Australian people in the retail market. Whether it is retailing fuel, retailing clothes or retailing groceries, there has to be a wider participation in that market.

How are we going to do that? We are going to have to do that by basically bending the rules to move away from this so-called free market, because there is no free market. There is no free market in anything in this world. If there truly was a free market, I would be able to go out the front door of my house, set up a bowser and start selling fuel, no matter what it was, without any controls, checks or balances whatsoever. But you cannot do that. So what we really have in Australia is a partially regulated market that we call a free market. Because it is a partially regulated market, it works in favour of the incumbents. The incumbents are the two major retailers and the four major oil companies.

The mantra that I have kept saying is that the purpose of the economy is not to produce the lowest priced product for the end consumer—because we hear that all the time: ‘This is going to bring lower prices.’ So it will, but the purpose of the economy is not purely to produce lowest priced products for the end consumer. That may be a consequence of a good economy, but it is not the purpose. The purpose of the economy is to create the greatest connection between the wealth of a nation and its people, and to do that it is vitally important that you have a small business sector. Where do you see the small business sector reflected in the fuel market? It is reflected in the independents.

It is going to be interesting to see how the pennies fall on this one. I will make a prediction. I predict that the Labor Party will be supporting this. Why? Because the major oil companies have got to them, that is why, and they are going to fall in line just to show that they too can put families out of business when required. It would be brave to stand up and say that we are going in to bat for families, that we are going to quarantine a section of the market to be exclusively the domain of independents, because we agree with the intent of the 1980 act—it was true in 1980; it is true now. All through this chamber, somewhere between 1980 and now, the belief in independents and a wide participation in the retail market has gone, for political convenience. Why has that happened? Where are we drawing it from?

I heard Senator Sterle talk about being an owner-driver. It must be a wonderful thing being an owner-driver, being your own boss. It must be a wonderful thing to determine your own future. It must be a wonderful thing to be in business for yourself. But it seems a shame: I believe that, today, you are not going to protect the right of other people to stay in business—that, for whatever reasons, you are going to justify to yourself why you have to let these people go. You are going to do it because the hierarchy in the Labor Party have told you to do it, and you follow orders. You do exactly what you are told. That is what is going to happen today. It is going to frustrate you because once more, just like you did over the biodiesel producers of Western Australia when you voted for that piece of legislation, today you are going to do over the families—families very similar to those of your owner-drivers. I do not know whether it is worth it. You can do something really worth while here by going in to protect some of these people.

So I am going to move an amendment to the Petroleum Retail Legislation Repeal Bill. I do not know how it will go. The amendment will talk about basically putting in some sorts of controls, getting 25 per cent of the market and keeping it aside for the small business operator, for the mum and dad operator. That will give them an ability to breathe, an ability to live. That will not allow them to go down this path where they are going, where they have to be driven into the ground and have every inch of commercial blood squeezed out of them by the four major oil companies and the major retailers. It will say that we will allow a section of the market for these people to survive in. We will say to them that Australia is a market that you can participate in, that we in Australia will protect your fundamental right to go into business—your fundamental right to exist in Australia in a manner that goes beyond just working for one of these companies—and that you can actually own and have further control over your own destiny, because that is the philosophical issue here.

Sitting suspended from 6.30 pm to 7.30 pm


Senator JOYCE —One of the other issues that we have been talking about in respect of the Petroleum Retail Legislation Repeal Bill is the so-called transparency of the terminal gate price. Unfortunately, I do not believe it is going to be transparent. What we would no doubt have would be a documented price. If you were mad enough, you could buy fuel at that price, but it would not be the price that everybody else would be getting it at and it certainly would not be transparent.

Transparency will be guided by commercial-in-confidence matters. You can bet your life that if it is transparent—if it is on the internet, if everybody can see it—it is not the price that it is being purchased at. That is one thing I can assure you of, yet tonight we hear both sides of the chamber talking about how good this transparency factor is going to be. I wish it were truly transparent. I wish we had an ombudsman to monitor it and tell people what the actual margin is that they are getting. We in this chamber need to work towards getting greater transparency because greater transparency will provide fairness and keep those independents in the market.

We have talked about independents: we have talked about why they are good for keeping the price down—because they promote competition—and we have talked about how independents are fundamentally a good reflection of a freedom in Australian society, the freedom to go and buy produce and make a profit out of it. Hopefully all of us on the conservative side of the chamber believe in the freedom to go into business. It is a part of what we are.

We have heard Senator Sterle talking about how he was an owner-driver. He talked about that with some gusto as if he believed in it—and I believe he does. Obviously, his freedom was to be in business and to shape his own destiny. That is one of the reasons why we support independents, whether they are in the fuel industry or whether they are in the retail industry. Whatever industry it is, the freedom to go into business should be manifest in what being an Australian is and be part of what we are ever-vigilant about protecting.

There is another good thing about independents. We believe—Senator Sterle believes and, having heard Senator McGauran, I know he believes it; everybody seems to be in raging agreement—in biorenewable fuels. We have heard from Mr Beattie that he is going to bring them in in Queensland. It sounds like the Labor Party might be getting close to talking about a mandate—great day when that happens; let us hope. We hear that everybody is in raging agreement that they all believe in biorenewable fuels. The fact is that the best mechanism for getting biorenewables out into the market is the independents. You get no better reflection of that than in this town—a town of 320,000 people and our nation’s capital—where, of the four fuel stations that are selling the E10 ethanol, three of them are independent and one of them is a major. That in itself goes to show you yet another relevant factor as to why we need independents in the market.

Why would the independents want to sell E10? I am going to hazard a guess here: because it gives them the competitive advantage that they know they cannot possibly get it at the terminal gate price. With the passage of this legislation without protection for independents, we are going to have the independents having as their supplier an unencumbered major competitor and, given the way that markets work, that will bring about the demise of the independents. That is crazy. Imagine your supplier, the person who supplies you with the product, being also your major competitor—and there is no control whatsoever on how you deal with them, because, since the Boral case, section 46 laws are lacking; they do need to be strengthened. This is why we need a section of the market that is specifically quarantined for independents, and we should not be ashamed to say we are manipulating the market to protect a basic freedom of the Australian people: the freedom to be in business. So that is going to be what we have to deal with.

This amendment will be moved in such a way that we protect independents to promote biorenewable fuels and we protect that manifest absolute freedom to be in business. We protect independents to keep competition in the market so we have price leaders and price discounting. That is one of the reasons why this bill in its current form—unamended—is lacking.

I have seen some other amendments. There is an amendment that was bandied around by Senator Fielding. The intent was good but it talked about no major having more than 25 per cent of the market. Unfortunately, four 25 per cents equal 100 per cent, which means that they would have the whole market, and if you include Coles and Woolworths that is 150 per cent of the market. I applaud his attention to it, but we need to go a bit further than that because we are not actually protecting independents; we are still leaving them out on a limb.

What this amendment does is say: ‘Let us look at this in another way; let us look at 25 per cent of the fuel being quarantined for those who have been determined to be independents.’ What is an independent? I cannot name everyone that it is but I can tell you who it is not. It is not Caltex, it is not BP, it is not Mobil, it is not Shell, it is not Coles and it is not Woolworths. That is who it is not.

That 25 per cent of the market should be quarantined for those people who are not in that group to go out and still have a corner of the market to participate in. The day that we lose independents is the day that we have an oligopolical relationship in the fuel market. When you attain a position of strength, you exploit it and the best way to commercially exploit your position is to put up prices; in fact, it is what you have a duty to your shareholders to do. When you get into that position, you exploit it by putting up prices—and I tell you what: four oil majors and two major retailers are obviously exploiting the price of fuel.

I will leave you with one final thing. The price of diesel in Iran at the moment, with all its problems—I am not suggesting that we go there; this is just to give you an idea of the margin in this product—is about 3c a litre. So the difference between 3c a litre and what we are paying for it is either government taxes, production costs or profit. I think there is a lot more to it than the terminal gate price. I suggest that a vast amount of the profits are made offshore and do not see their way into our country. If we lose the mechanism of the independence to protect our position then, as a nation, we will lose in the long run.