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Transcript of doorstop: Blakehurst, Sydney: 30 May 2004: petrol prices; Iraq; David Hicks.

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SUNDAY 30 MAY 2004

Subjects: Petrol Prices, Iraq, David Hicks

LATHAM: Thanks for coming along. I am here today to talk Labor’s strategy for driving down petrol prices and giving the motoring public a fairer go in a very difficult environment. Because of the war in Iraq, Australia now has very high petrol prices. The price has gone up substantially in recent times and while these are international factors now is the time for the Howard Government to introduce reforms to the Trade Practices Act that radically increase the level of competition in the Australian petrol industry. We want to see more competition and greater opportunities for independent wholesalers and retailers in the petrol industry to access cheaper products and to pass those gains on to the motoring public.

For most parts around Australia they’ve got a price of a $1 a litre, at a minimum - and of course in many parts of Australia it is far higher than that. We’ve got the difficulty of families really struggling with their weekly petrol bill. Particularly for those families, those taxpayers, who missed out on tax cuts - people on less than $52,000 a year - this really is a big impact on their budget and it is time for the Howard Government to join with us, to join with Labor policy, in making the commonsense changes that are needed to the Trade Practices Act - increasing the powers of the ACCC to get more competition into this industry and to have some significant gains passed on to the motoring public.

I am releasing our strategy today which has six elements to it. The first element is to amend the Trade Practices Act to guarantee independent wholesalers and retailers access to fuel supplies from the terminals of the major oil companies on fair terms. They would be able to shop around much more than they can at the moment, access the cheapest products from the terminals and pass on the benefits to consumers.

The second element of our policy would be to allow those independents to bargain collectively, to get together and have even stronger bargaining power in accessing cheaper prices and passing that on to the motoring public.

The third element of our policy is to outlaw predatory pricing under the Trade Practices Act (TPA) and strengthen Section 46, the Abuse of Market Power. Predatory pricing has been a problem in the petrol industry where the oil majors will put the price down temporarily, drive out competition and then jack the price up at an even higher level in the future to the long-term detriment of consumers.

The fourth element in our strategy is to give the ACCC the power to issue ‘cease and desist’ orders. If a company or a service station is doing the wrong thing they would have the power to take immediate action instead of having to wait for court proceedings down the track, which can be a very lengthy and expensive procedure.

The fifth element of our policy is to grant the courts a new power under competition law in Australia to order the divestiture of assets and impose gaol terms on companies that are engaged in cartel-type behaviour. We know in the nature of the petrol industry that the formation of cartels is a major worry. This would be an important deterrent against that - the companies can be broken up, divestiture of their assets and also gaol terms for those engaging in hard core cartel activity.

The sixth and final element is a new system - a ‘Yellow Card’ system - so the ACCC would have a publicly available register of complaints of the misuse of market power in the petrol industry. This would be used by courts in assessing

penalties for proven breaches of the Trade Practices Act.

In combination, these six elements would provide far greater competition in the petrol industry. We know competition is possible. It can pass on significant benefits to the motoring public. For instance, half an hour ago at this service station, the price was $102.9 per litre. I think, encouraged by the TV cameras and maybe the opportunity for some publicity, they have brought it down to 99.9c, where it is at the moment. So competition is possible; they can get the price lower - the service stations and the big oil companies around Australia. We want to foster that competition to the maximum degree. We also want to make sure that companies that then jack the price up and engage in predatory pricing, in particular, are going to find it a lot tougher to do that. They’re going to find the full weight of the competition law coming down on them. So now is the time for the Howard Government to take action. We are releasing a strategy today in recognition of the very high prices that consumers are facing around the country. These are international factors - the Iraq war, in particular, among them - but we can do a lot on the domestic front to foster competition and that is the core

approach that the Labor Party urges now and will adopt in government to the benefit of motoring consumers around Australia.

JOURNALIST: Should the Howard Government consider reducing its tax take on fuel?

LATHAM: We’re not proposing any change in the taxation regime. What we’re proposing is a major beefing up of the competition policy regime to get benefits for motorists. These reforms are long overdue. The Howard Government in some areas has promised this in the past but failed to take action. For instance, they promised that the independents would have the chance to shop around at oil terminals on fair terms: that hasn’t been delivered. They also had a recommendation from the Dawson report to introduce gaol terms for cartel-type behaviour but they haven’t acted on that recommendation. So the Howard Government - they’ve been in office for eight and half years and they’ve had plenty of opportunity to do something in terms of increasing competition in the petrol industry - hasn’t taken action and we are releasing this strategy today to put the pressure on them, but also to say that this is Labor’s policy that we will act after the next election in government.

JOURNALIST: If the distributors are actually getting the petrol for less, can you assure that the savings will be passed on to consumers?

LATHAM: With stronger powers for the ACCC, you have a stronger guarantee than under the current law and that is the point. You need the opportunity for the independents to be more effective competitors, to get the cheaper product and then have the strongest possible powers by the ACCC to

ensure that those price gains are passed on to the motoring public. So beefing up the Trade Practices Act and, in some cases, making particular tough laws for the petrol industry is entirely appropriate.

JOURNALIST: How much do you think it would save in the long term?

LATHAM: It will depend on the extent of competition. Obviously competition is stronger in the city but I think some significant gains can be made and the deterrent effect - I mean, the deterrent effect is very strong. If people are going to have the threat of their company broken up, gaol terms against cartel-type behaviour then there’s an important deterrent there against some of the shonky practices we have seen in the petrol industry over many years that disadvantage the motoring public. I think we can have significant gains and certainly the best way of ensuring cheaper petrol prices is to maximise competition in the industry itself.

JOURNALIST: What are we talking about 1c, 5c or 10c?

LATHAM: I’m not here to forecast the market outcomes but I can say that maximum competition produces maximum gains for consumers and until we try these reforms you’ll never know - whether it is 1c or 5c or 10c a litre. But I think the motorists would be relieved to know that we are talking about extra competition, because they know some of the things that go on in this industry, and increasing competition is the best way of giving them a fair go in the future.

JOURNALIST: Mr Latham, will you be pushing the Government to reflect a Red Cross report about prisoner treatment in Afghanistan?

LATHAM: I know the issues of Guantanamo Bay and Iraq but I’m not aware of the issues in Afghanistan.

JOURNALIST: The allegations about David Hicks being mistreated in Afghanistan.

LATHAM: He is not in Afghanistan; he is in Guantanamo Bay and we’ve made our position clear. We want greater transparency and information for the Australian public and a medical inspector to obviously make an independent report about the circumstances.

JOURNALIST: Are you concerned that a man was released on bail in Sydney and then arrested in Lebanon on terror charges?

LATHAM: I might ask Robert to say something about it. He dealt with it yesterday in the media and, as the Shadow Minister for Homeland Security, he has been handling that.

McCLELLAND: Certainly that shows that there is an overlap between criminal activity and potential terrorist activity. It just shows how we need to get the federal Government and the state governments working together in a cooperative measure. Quite frequently there will be a need to communicate

research in respect of criminal conduct to ASIO to ensure that we tie off all bases and in respect of the specifics we are still waiting on details.

JOURNALIST: [inaudible]

LATHAM: I think international opinion has set out that weapons of mass destruction weren’t used in the war itself and none have been found since and no-one has the expectation. I think Mr Howard and maybe a few other people are the only ones holding out against reality that no weapons of mass destruction have been found in the time since the Iraq war. I think an important purpose of the Prime Minister’s trip overseas will obviously be to raise this with

the American administration and report back to the Australian people on the reasons why stockpiles of weapons of mass destruction weren’t found, and to give the Australian people a full account of what went wrong, the mistakes that were made. I mean, the justification for the war in the first place was to find these weapons of mass destruction that don’t exist. So the Prime Minister has made the mistake of sending Australians to war for a purpose that wasn’t true. And I hope one of things he does out of his overseas trip is to report back to the Australian people on how that happened, the mistakes that were made and to give a full and honest account of what went wrong.

JOURNALIST: The Prime Minister said that David Hicks might face the US military trial within a couple of months. What is your reaction to that?

LATHAM: I think the faster they get their justice the better. We argued consistently that that justice should be dispensed in Australia. They are Australian citizens; it should have happened in Australia. We made offers to assist the Government in that regard. They knocked us back. We are going to have to see what happens out of the legal processes overseas.

JOURNALIST: Mr Ruddock said this morning that he believes that ASIO were remiss in ignoring Jack Roche’s phone calls in relation to his activities in Australia. Have you got anything to say about that?

LATHAM: He said they were remiss?

JOURNALIST: Well, he said that they should have paid more attention to the fact that Jack Roche tried to contact the terror hotline to indicate that there were actually terror networks.

LATHAM: That’s a major concern and it adds to the long list of concerns about intelligence capacity in this county. That’s why we’ve been calling for an inquiry with royal commission powers. If things have happened and things have gone wrong in the past, we can’t reverse any of that but we’ve got to get it right for the future. The war against terror is primarily an intelligence war and we can’t afford mistakes - mistakes can mean lives and we can’t afford that. We’ve got to get it right for the future and it is appropriate for the Government to put all of these different issues and problems before an inquiry with royal commission powers to ensure the Australian people have got a guarantee for the future - that they’ve got the best intelligence services and capacity available to them. This should be above politics - both sides of politics are committed to the war against terror. We want to get it right; we just think the Howard Government needs to take more decisive steps in the area of intelligence to give the Australian people that guarantee for the future.

JOURNALIST: What abut the problems there seem to be in communications between ASIO and the AFP in terms of [inaudible]

LATHAM: That report is weeks old now. We dealt with that at the time. It’s not something that has come up today in any form.

JOURNALIST: Do you agree with suggestions that we are looking at a later election now - more towards October - that the Government might hold off?

LATHAM: That’s up to Mr Howard and there’s one guarantee in Australian politics is that he doesn’t give me any tips or any hints along the way. So we will have to see what the Prime Minister does. Thank you very much for your time today.