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Wednesday, 16 April 1980
Page: 1482

Senator COLLARD (Queensland) -I suppose that the many thousands of people in Australia whose whole lives hang on every word spoken in this chamber are now totally confused about the procedures of this chamber- at least, they should be. What will make it worse for them is that they will have to wait for some time before they will be able to hear the final part of Senator Douglas McClelland 's speech, if they ever hear it. It is an interesting scenario. If ever we get the televising of proceedings in this place, I am quite sure that many people in the community will wonder just what sort of a guy Senator McLaren is; whether he has feathers or whether he has not a feather to fly with.

Senator McLaren - I take a point of order, Mr President. Although I do not think that what was said is insulting to me, what Senator Collard has done is to deliver a deliberate insult to the poultry industry of Australia. I demand that he withdraw those remarks, which are insulting to the very fine people who produce eggs in this country.

The PRESIDENT - There is no point of order.

Senator COLLARD - I agree that it was an insult to the poultry of Australia; I withdraw it. It would be very easy for us in this Parliament if we could make easy decisions all the time, but it also would be disastrous if at times we did not accept our responsibilities and did not take decisions which ultimately have a beneficial effect on the people of Australia. We are dealing with a matter of public importance, namely:

The implications of the Government's fuel pricing policies for country areas.

Undoubtedly, at present many farmers see rising oil prices as a problem. Those of us who regularly move around rural areas in particular hear farmers' opinions when we attend meetings. But I also find that when the policy is explained to them they are quite prepared to accept that the Government has to take a stand if its doing so is to the ultimate good of the farmers. Inevitably the ultimate argument concerns the availability of fuel, not the pricing of fuel. The pricing policy is but an immediate argument; ultimately it will be the availability of fuel which will concern us all. That basically is what this issue is all about.

If any sector of the community is in need of petroleum products it is the rural sector. Currently petroleum products are the only available portable fuels. The rural sector is more reliant on those portable fuels than are the city and urban areas. It has been pointed out by honourable senators on both sides of the chamber in this debate that the city dweller does have access to public transport. That is why it is far more important that fuel is available to rural dwellers, not only to meet their transport needs but also to meet their needs in producing their goods. Already government policies have led to an improved exploitation of resources and a more efficient use of liquid fuels. The situation in the Middle East, which is quite fluid, makes it more and more advisable that we should stick to our policies.

The Leader of the Government in the Senate, Senator Carrick, mentioned the fact that exploration for oil is going on outside the normal channels. In other words, we are trying to bring shale oil on line. Mention was made of the Rundle oil deposits south of Rockhampton. Just north of Rockhampton are the Yaamba deposits and there are the Galilee Basin deposits in western Queensland. Those deposits cannot be brought on line without the expenditure of vast sums of money. Those vast sums of money will not be spent unless there is a guaranteed return from that expenditure. So our oil pricing policies already are having the effect of work being done on the Rundle shale deposits to bring a pilot plant into operation in order to gain an idea of the costs involved. Ultimately, it will be a mammoth operation. As I said, expenditure on it will be outlaid only if there is a guaranteed return. When that project is operational it will give us a more guaranteed energy supply in Australia. That is basically what this is all about.

A lot more work needs to be done on the production of oil from coal. It is done in some countries. We know that South Africa is doing it. It requires a lot of expenditure because it is more than just a process of converting coal into oil. I think I have said before in this chamber that hydrogenation is necessary also. The molecules of" oil which come from coal do not contain enough hydrogen and are not suitable for fuel oil. Thus, it is not only a conversion process but also a hydrogenation process. That means also that a vast amount of money has to be expended on it. That money will never be expended if there is not a guaranteed return. So the realistic pricing of our product opens up a whole field of alternative energy sources.

This evening we probably will debate the Distillation Amendment Bill, which when enacted will provide for the production of ethanol on farm. That will provide another alternative. It also would not be worth pursuing if a suitable price were not applied to it. The Government recognises the problem of rural areas relating to costs and supplies. Indeed, excise on distillate is not payable when used in rural production. But, more than that, in 1965 this Government introduced a freight subsidy scheme. Unfortunately, under the Labor Government, the scheme was demolished following the presentation of the Coombs report. I shall read a couple of sentences from that report to give an idea of the thinking at the time. I quote one sentence which appears at page 226 of the report. I ask honourable senators to listen to this for a philosophy:

Moreover, there is little economic logic in providing a subsidy which encourages people to remain in remote locations such that the greatest encouragement goes to those most remote.

What a ridiculous thing to say. Does any honourable senator think that people in remote areas will burn fuel j just for the sake of burning it or because they do not have to pay as much freight on it? Yet the Labor Government based its decision on that finding. I ask honourable senators to listen to this for a pearl of wisdom:

In paying subsidies on eligible products, encouragement has been given to the use of subsidised fuels (rather than fuel oils) in power generation by State governments and municipal authorities as well as by private enterprises, including inland mining companies.

I am quite sure that in 1965, when the fuel freight subsidy was introduced, the means of power generation in the rural areas did not all of a sudden change from burning fuel oil to burning light diesel oil. The implications are, according to the Coombs report, that it did. It is so ridiculous! Yet this is the document on which the Labor Party sowed the seeds of its ruin in rural Australia. It at first reduced and then withdrew the fuel-freight subsidy scheme to rural Australia. That, of course, was the beginning of the rot for the Labor Party. It was the rock it perished on in rural Australia.

The Government reintroduced the scheme in two stages. The second stage came into effect on 1 April this year, two weeks ago. Now the freight cost to consumers should not be in excess of 0.44c a litre anywhere in Australia. That cost is being borne by the taxpayers as a whole. It was $81m in 1979-80 and it will be $123m in the full year 1980-81. As I have said, the purpose of the subsidy is to reduce the cost of fuel to people in nonmetropolitan areas. That is one of the Government's fuel pricing policies which the Labor Party seeks to debate in this place. It appears that the Labor Party does not agree with that policy. The rural communities are in need of portable fuel far more than people in other areas. Isolation increases their need.

One of the important things that have occurred as a result of our policies is fuel conservation. The increase in the use of petrol has dropped, so much so that in the first nine months of 1979 the increase was only 1.38 percent. More importantly, home heating oil consumption has dropped by 22 per cent; the consumption of lighting kerosene has dropped by 12 per cent; the consumption of heavy industrial oils is down by 4 per cent and even the consumption of jet fuel has dropped by 0.7 per cent. The airlines themselves are changing their flight profiles to get better fuel economy from their aircraft. To indicate how fuel conservation is showing up in the ordinary scheme of things, I refer to the recent figures on the purchase of motor vehicles in Australia. For the first time in many yearsperhaps for the first time ever- a four-cylinder vehicle is now obtaining the second highest number of sales per month. I think that this trend is a great improvement. Australians are at last getting over the hangup that they need a sixcylinder or V8 motor vehicle. In many instances they do not. A good four-cylinder vehicle can well do the job they require of it and burn a lot less fuel.

The conservation element of our fuel pricing policies is already evident. It is of ultimate benefit to those who are more reliant on fuel than others, particularly those in rural Australia. Wasteful consumption is being reduced. This means that reliance on oil from politically unstable regions of the world is also being reduced. All sectors of the Australian community must adjust to the realities of the world oil situation.

Ultimately the Government's energy policy will be of great benefit to the people in rural Australia. Of course it means an increase in the production costs of rural producers in the immediate future. However, other countries have increases in costs. These increases do not matter so much on the domestic market but our rural producers are concerned about the markets in which they compete with other countries. Our main competitors, the United States and Canada, have other problems. Their land costs are far higher than those paid by our rural producers. Their inflation rates and interest rates are higher. All these factors have a cumulative effect on the costs of rural producers. Although our rural producers may have to bear a small increase in the price of fuel, their competitors have other problems. Knowing the ability of our producers, I think they can remain competitive on world markets.

As I said at the beginning of my speech, the crux of the matter is that the Government's policy is designed ultimately to provide for the availability of fuel. That will mean some pricing problems to some people in the immediate future but the Government would not be worth its salt if it were not prepared to take some hard decisions when it was necessary to do so, if it were not prepared to bite the bullet and, in doing so, to provide for the ultimate good of the people of Australia, particularly those who are most dependent on portable fuels- the people in rural Australia.

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