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Thursday, 28 August 1980
Page: 893

Mr KEATING (Blaxland) - There can be no justification for the Government's import parity oil pricing policy. It is a rip-off, a tax by stealth perpetrated at every petrol pump in the country to spread the burden of taxation beyond direct taxation through income tax and through the pay packet to indirect taxes which have become a feature of the Fraser Government. In the last couple of years, the revenue from the crude oil levy has risen from $400m to an estimated $3,054m this year. The revenue from petroleum products is about 1 1 .8 per cent of the total Commonwealth budgetary receipts. So, the public of Australia is paying a massive increment to tax of about $950 a year for the average family through this mechanism which is called import parity.

Australians do not have to pay this price because 67 per cent of our oil is produced in Australia from fields discovered before 1970, largely from the Bass Strait fields where 93 per cent of our production flows. Most of that oil is produced for around $1 a barrel. Yet the Government makes Australians pay $27.50 a barrel for the privilege of using it. Why should Australians be asked to pay the world price of $27.50 a barrel for oil which is produced at a cost of one dollar a barrel? Quite simply the reason is that the Government believes that the public of Australia would be so stupid as not to understand that it was not the Organisation of Petroleum Exporting Countries or the Arabs charging the price but the Australian Government. It thought it could hide behind the Arabs and blame them for a tax it was imposing. The result now is that everybody who wishes to fill the tank of a medium sized sixcylinder car will find that the cost is about $25.

The Prime Minister (Mr Malcolm Fraser) two days ago indicated in his energy policy statement that he expects oil prices to continue rising. From that statement we can understand that the international price of oil will continue to rise, both in the view of the Prime Minister and in my own view and that will mean under the Government's policy that that price will translate straight into Australian prices with this automatic link or nexus which the Government calls import parity. In other words Australians are not to get the benefit of oil in their own country. We do not pay the world price for electricity because Australia has an abundance of coal. We do not pay the world price for gas although we do not have an abundance of it, but the Government is making us pay the world price for oil. All of this is under the guise of an energy conservation program.

What we have seen are very modest results - a drop of 0.7 per cent in the consumption of petrol. Yet when we compare that drop with what has happened in the United States of America, we find that the consumption of petrol dropped there by 10 per cent - not 0.7 per cent - without an import parity policy, as the Americans do not have one. It has dropped in America simply because that country has other direct measures such as mandatory fuel consumption standards on motor cars. But there is no way that the Fraser Government would take on either the Ford Motor Company of Australia Ltd or General MotorsHolden's Ltd in Australia and make them introduce modern and efficient engine plants. No, the Government will allow them to run down their investment in their old engine plants and the result will be that Australians will be getting 1 3 miles to 14 miles to the gallon out of their four and five litre cars. The latest Commodores have 5-litre engines.

The direct measures which the American Congress has undertaken have reduced substantially the consumption of petrol in that country. In Australia, $3.5 billion will have changed hands in the last financial year and the result of that massive cost on the public of Australia under the Fraser Government's policy is a reduction of 0.7 per cent. Petrol prices have risen by 33 per cent in the last financial year. Despite that massive increase, the drop in consumption is only 0.7 per cent - a very modest gain indeed. Obviously the policy is just too expensive for a country like Australia and too inflationary for the Australian economy to bear. There can be no glib justification by the Minister of import parity pricing.

The other justification that the Government seeks to make is that a high price is needed to encourage exploration. This is a phoney argument because both the Australian Labor Party and the coalition parties have agreed to pay the world price for oil yet to be discovered, that is, import parity for new oil, but not existing reserves in the Bass Strait. The Labor Party introduced that policy in 1975. It has been continued by the present Government and has the support of the Opposition. That is the policy under which exploration in Australia continues.

The companies operating in Australia, with the exception of Esso-BHP, largely do not produce any oil or gas in Australia and can get nothing out of the old oil policy. Therefore, they are searching for oil and gas here simply on the promise that they will be paid import parity if they discover new oil. Why should not we pay them import parity because we would only have to pay it to, say, some Middle East state?

Why should we pay import parity for oil which was discovered over 10 years ago in the Bass Strait, for which all the production platforms have been established in respect of which production is at the rate of about 400,000 barrels a day. Why should we have to pay the world price for that oil? Quite simply, we should not. It is no encouragement for exploration. The encouragement for exploration comes under the new fields policy. It is just a tax rort, a rip-off, a tax by stealth, a hoax on the Australian motoring public where the Fraser Government has established a branch of the Taxation Office at every petrol pump. The city dweller, the farmer and the industrialist all pay through the nose for fuel which is produced in their country and which should be available to them at prices much less than the prices which the Government is determined to charge them.

Question resolved in the affirmative.

Sitting suspended from 12.59 p.m. to 2.15 p.m.

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