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Wednesday, 5 March 1980
Page: 594

Senator CARRICK (New South WalesMinister for National Development and Energy) - It may surprise the Senate and the listening public to learn that the Senate is discussing the Pipeline Construction (Young to Wagga Wagga) Bill and that the purpose of the Bill is to provide for the construction of a pipeline from Young to Cootamundra and Wagga Wagga. This pipeline will join the main Cooper Basin to Sydney pipeline at Young. I will be moving an amendment to the early clause of the Bill because there was a slight defect in the original Bill. The orginal agreement was that the metering of the pipeline should be at the municipal boundary. {Quorum formed). The Commonwealth Government has decided in principle that it would like ultimately to extend the pipeline from

Wagga Wagga to Albury and there join the Victorian pipeline. Thus the Cooper Basin and Bass Strait could be connected. It is for that reason that the dimension of the pipeline dealt with in this Bill is to be 12 inches rather than a smaller size. The Bill itself is completely unobjectionable.

During the course of the debate Senator Walsh, who spoke for the Australian Labor Party, wandered far away from the Bill. But since he raised a series of matters, including the pricing of natural gas, liquefied petroleum, gas and oil, I' make these comments. I make them only because these points were raised. Firstly, there is no suggestion by this Government that the price of natural gas should be raised- to import parity. On the other hand, the speeches both by the Leader of the Opposition (Mr Hayden) and by the spokesman on energy, Mr Keating, are clear indications of their intention. For example, on 13 March 1 979 when addressing the Australian Gas Association on gas pricing, Mr Hayden said:

The movement towards opportunity cost pricing would help stimulate exploration.

In other words that is an indication that the Labor Party's intention would be to put up the price of gas. Mr Keating, in his Green Paper on energy in May 1979, stated:

Raising the price of indigenous oil to world parity while maintaining government enforced prices for natural gas will only work to reinforce the present distortions in production, consumption and investment in the energy market. Although the pricing of energy resources at well below opportunity cost will yield short-term benefits, it will also give rise to long-term costs.

The ideal yardstick for the termination of gas prices is found in oil prices. Domestic gas prices should bear a realistic relativity to domestic oil prices. While the price of gas remains comparatively low in relation to oil, gas will be consumed in a profligate way and exploration will be depressed.

Mr Keatingwent on to say:

An increase in gas prices would provide an immediate incentive for increased gas exploration.

Higher prices may also result in increased efficiency in the use of gas, further improving the situation on the demand side.

Mr Haydenand Mr Keating are talking about raising the price of natural gas to opportunity cost, which is of course the world market price. We are not doing that at all. I direct the attention of honourable senators to Mr Hayden 's completely clear statement on liquefied petroleum gas. He said:

If we want to ensure maximum domestic consumption of LPG, then we must ensure that producers obtain a domestic price reasonably related to the export price . . .

It is quite clear that that is what the Labor Party's intention is regarding the price of oil. There can be no doubt about it. Mr Keating, the

Opposition spokesman, was asked a question by the Press recently regarding the quantum of the resources tax to be put on oil by the Labor Party. He was asked:

Would the resources tax raise more or less than the oil production levy?

He replied:

I think it would probably raise more.

Clearly the Labor Party wants to increase the price of natural gas, it wants LPG to be at the export price and it wants to put a resources tax on oil which would yield more than the present oil levy. Clearly that would put the price above the present price. The interviewer continued:

That sounds to me as if a resources tax is just a different version of 'a branch of the tax office at every petrol pump'.

Mr Keatingsaid:

Well it is to some extent.

I had no intention of raising the question of the pricing of oil or its component gases in this debate, but I think it is fair to say that those who query this Government's pricing policies ought to know that the alternative policies by the Labor Party, on its own say so, would put the price of those commodities above that which this Government is contemplating. This Government has provided a subsidy on LPG to soften the effect to domestic gas users in the country of a Prices Justification Tribunal pricing. Under the Labor Party's pricing policy that would not occur. I now return to the Bill. I understand that is not opposed. The Bill is for a good purpose and I commend it to the Senate.

Question resolved in the affirmative.

Bill read a second time.

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