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Wednesday, 23 April 1980
Page: 1713

Senator CARRICK (New South WalesMinister for National Development and Energy) -I move:

That the Bill be now read a second time.

I seek leave for the second reading speech to be incorporated in Hansard.

The PRESIDENT -Is leave granted?

Senator Georges - Does the Bill originate in this House?

Senator Carrick - It is a money Bill and as such must originate in another place.

The PRESIDENT -Is leave granted?

Senator Georges - I note that it is not a money Bill in the strict sense. Nevertheless we grant leave for the second reading speech to be incorporated.

Leave granted.

The speech read as follows-

The world is facing an energy crisis and unless positive action is taken by the Government to encourage the rational use of our natural energy resources, Australia may experience shortages and hardship. For this reason the Government has formulated a policy of encouraging the use of liquefied petroleum gas as a means of reducing our dependence on imported oil, particularly in areas where LPG has premium value, such as for automotive use or for use as a petrochemical feedstock. The Government expects that existing Bass Strait producers of LPG as well as potential producers in the Cooper Basin and North West Shelf will supply the domestic market as a first priority.

It is essential, however, that we avoid patterns of usage of LPG where there is a ready availability of long term alternative fuels such as natural gas or electricity.

To these ends the Government's policy provides for assistance to achieve the national objectives which already have been outlined. There will be a reduction in the price of propane and butane to a common maximum price of $205 per tonne other than for petrochemical and nontraditional industrial uses. This means that the price of propane will be reduced by about 20 per cent and the price of butane will be reduced by about 30 per cent. The new price will provide approximately a 50 per cent price differential between LPG and motor spirit in the Melbourne reference market and will be a major incentive towards the usage of LPG in motor vehicles, especially in the case of fleet owners.

The Government will be encouraging conversion out of LPG by commercial and industrial enterprises by extending to such users the previously announced taxation concessions and allowances which will apply to the conversion and replacement of oil-fired equipment. The use of LPG by householders, non-profit residential type institutions and schools will be subsidised for three years to allow them time to adjust to the rising prices of LPG and, where possible, to convert from LPG to more readily available alternative fuels such as natural gas or electricity. In introducing this scheme the Government has been particularly mindful of the interests of householders and similar consumers who now use LPG in country districts. It is expected that any hardship being suffered by those consumers, following recent increases in the wholesale price of LPG, will be alleviated by the introduction of this subsidy. The purpose of this Bill is now to provide for the subsidy. The subsidy will operate from 28 March 1980.

The Bill provides for grants to be made to the States to enable the States to pay, to registered distributors of LPG, a subsidy of $80 per tonne on LPG sold to those consumers. The subsidy will also be paid to registered distributors of reticulated gas at the rate of $80 per tonne on LPG and naphtha purchased by them for use in the production of the gas subsequently sold to those consumers. Payment of the subsidy to the registered distributors will be conditional in all cases upon the benefit of the subsidy being passed on to the consumers. The subsidy will not be payable to commercial or industrial users who nevertheless will benefit from the price reductions that I referred to earlier and the tax concessions to be extended to those users to encourage them to switch from LPG. It is estimated that the cost of the subsidy scheme will be about $60m over the three-year period. Arrangements are being made to enable the State Governments to introduce the necessary legislation so that early payments may commence.

In my view there will be little difficulty involved in the administration of this scheme. The legislation to be introduced by State and Territory Governments will contain heavy penalties for any breaches of the law. These penalties will include a maximum penalty of $2,000 or imprisonment for 12 months if a person is found guilty of knowingly obtaining or attempting to obtain payment under the legislation that is not payable. Commonwealth officers approved by my colleague, the Minister for Business and Consumer Affairs, will be vested with extensive powers in relation to the administration of the scheme. These powers will be similar to those given to such officers under Commonwealth bounty legislation. I commend the Bill to honourable senators.

Debate (on motion by Senator Georges) adjourned.

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