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Thursday, 1 May 1980
Page: 2070

Senator CARRICK (New South WalesMinister for National Development and Energy) - in reply- I am grateful for the restraint shown by all honourable senators who spoke in this debate. It is important that the Liquefied Petroleum Gas (Grants) Bill is passed through all its stages. I too will be brief in my remarks. It is true that liquefied petroleum gas is a premium fuel. I acknowledge that. In order to make sure that it becomes a premium fuel and that it is used to the full in Australia, this measure and these policies have been put in place. Australia needs to conserve all of its energy, particularly its hydrocarbon energy. At the moment we export some 80 per cent of the LPG produced in Bass Strait. It is desirable that over a period we should absorb its use in Australia to add to our energy sources and to offset the need for the use of gasolene.

It is calculated that within a few years all of the LPG produced in Bass Strait which is now exported will in fact be absorbed in Australia. This policy has sought to establish with the producers and the refineries a clear understanding that the first priority for LPG shall be for automotive use and the second for petrochemical use. The development of fleet operators, taxi operators and commercial operators in metropolitan areas should be adequately serviced. It is believed that, some years from now, some 10 to 14 per cent of petroleum now used in gasolene will be replaced by LPG. That would be an enormous saving in the automotive sense. It is equally the aim that the petroleum petrochemical industry should be adequately served. There will be opportunities for that by the development of the liquids from the Cooper Basin and subsequently from the North West Shelf.

Some comment has been made about the level of $205 per tonne which the Government has asked the Prices Justification Tribunal to fix. It is fair to say that over the years, until one aberration in January, the price of LPG per tonne has almost been the same as the price of crude oil. It was only in the PJT determination in January that a very large lift occurred in the prices of butane and propane and that parallel did not exist. It is important to say that the amount of $205 per tonne, which the Government has established, bears again the restoration of the relationship with crude oil, which is I think about $196 per tonne, so that rather than departing from our crude oil policy and our import parity pricing policy, we are operating very much within them. I am bound to say that the fixing of the approximate 50 per cent differential between the price of gasolene and the price of automotive LPG will be such as to ensure continuity of costing in-fleet use for the future. It also means, from the latest table I have seen, that for automotive fuel use we will be selling LPG cheaper in Australia than it is sold in a full list of Western countries that I have seen.

Some suggestion was made that it was a waste to continue to supply to householders. Successive governments have ignored the wastefulness of allowing a development, particularly in country areas, of the use of LPG for ordinary domestic heating and cooking purposes. That use has been established and it is necessary for us now to act so that we wean people away from that. The major development of pipeline systems such as the Young-Cootamundra-Wagga WaggaAlbury pipeline system, the Dalton-Canberra system, the proposed Bathurst-Lithgow-Orange system, and the Sydney-Newcastle system are aimed to put the country suppliers on to natural gas. I will be talking to the Victorian Government in that regard.

Time does not permit me to answer all the points made. It is said that Mr Hamer made criticisms of the LPG policy. At the Liberal Party Federal Council meeting and in my presence he said that he wholeheartedly supported the LPG policy as it now is and that his Government wholeheartedly supported the import parity pricing policy. Senator McLaren quoted some figures that Mr Keating mentioned. They may or may not have been accurate; they probably are accurate. Mr Keating has indicated that his party's proposed resources rent tax would almost certainly yield more from the oil companies than the present oil levy. Responding to a journalist's question whether the Labor Party's policy was not simply a branch of the tax office at every pump, he said: 'Yes, that may be regarded as so' if 1 can paraphrase him. I can only say that if one were to apply a resources rent tax one would deter exploration and the very reverse of a conservation policy would happen. I commend the Bill to the Senate.

Question resolved in the affirmative.

Bill read a second time.

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