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Thursday, 18 September 1969


Mr LUCHETTI (Macquarie) - The Opposition welcomes proposals for the more equitable price structure in Australia of petroleum products and of all other products and services required by the people of our country. We believe that people in remote areas should not be penalised by unfair costs. Those who live away from big cities should win rewards and not penalties. At the present time, quite frequently people in the country who are pioneers producing the wealth of this nation find that they are handicapped in many ways and particularly in regard to the prices paid for goods and services. Invariably prices are higher in country districts where much of our wealth is won. This often is accepted as the normal condition.

We should endeavour to implement policies designed to establish uniform prices throughout the nation. This Bill, which seeks to amend the States Grants (Petroleum Products) Act of 1965 has for its purpose the continuation of principles of the 1965 Act so that the wholesale prices of petroleum products used for transport purposes in country areas do not exceed the relevant capital city wholesale prices by more than 3.3c. Products eligible for subsidy are those generally used in transport - motor spirit, power kerosene, automotive distillate, aviation gasoline and aviation turbine fuel. Payment to the States for the legislation that we seek to amend totals 86 1.9m. Of this $19.3m was paid to finance the year 1968-69. i raise the question here: Is this the most satisfactory way of achieving the objective that we have in mind to try to reduce costs in the country, to make the prices of petrol and automotive fuel more in Keeping with the prices in the great metropolises? Should the taxpayers be called upon to pay this cost?

In this legislation the Commonwealth pays to a State the amount of money required by the petrol companies to carry out the intentions of the legislation. There are other ways, of course, that this matter could be tackled. It could be dealt with by making a slight increase in the price of petroleum products in our great capital cities and industrial centres. By a simple device the price of petroleum products could be levelled out throughout the nation and there could be uniformity.

In addition, there is the other course that might well be followed - the possibility that the petroleum companies, with their vast profits, their great investments and their extensive world organisations could make a contribution themselves so that the amount required to be paid by the taxpayers of this country could be substantially reduced. What could be done by the oil companies in a voluntary way to reduce the price? They could make some small sacrifice of the profits that they have won - profits that are hard to discern because it is most difficult to obtain information from the oil companies. A fractional increase, of course, as I have said, could be imposed upon the people. I would reject that because I believe that the tax system or alternatively the oil companies making their contribution, or the oil companies and the taxpayer should present the most suitable way of dealing with the situation.

When we think of using the taxpayers' money 1 believe we ought to look at the overall picture of the petroleum industry and the ramifications of the oil comanies to see what can be done in matters of this kind. I believe that there should be a searching inquiry into all of the ramifications of oil companies, their operations, their price policy and their profits. The question of the pattern of production was adversely reported upon by the Tariff Board some years ago when it was made clear that oil companies, instead of cracking all of the petrol that could be obtained from crudes were cracking only a percentage of the petrols that could be obtained and were using the rest as fuel oil in order to deal a blow to the coal industry. Of course, oil companies maintain the utmost secrecy in their business. It is extremely difficult to obtain facts But the government of a nation, which has a responsibility to the people - to the taxpayers - should see what oil companies are capable of doing and should ask them to pull their weight in matters of this kind.

Some time ago the Prime Minister (Mr Gorton) made a statement to the Parliament dealing with the question of oil price policy. That statement was of some significance. It was presented to the Parliament on 10th October 1968. It altered, to some extent, the situation which had existed regarding the price of oil from the Bass Strait and other fields. This statement of policy presented by the Prime Minister does not go far enough. It still allows oil companies an abundant area in which to manoeuvre. What shocks the majority of Australian taxpayers and people using petroleum products is the fact that whilst we have been able to locate substantial supplies of petroleum products from the flow oil in Bass Strait, in the continental shelf and elsewhere, people should be compelled to pay more for petrol today than they paid when all our petrol was being imported. I mention this fact in passing merely to illustrate the point that we should be concerning ouselves with the overall question. We cannot logically, reasonably and sensibly deal with a matter of this kind unless we look at the overall question.

It is true that oil companies, particularly those which have been fortunate to find flow oil in Australia, along our coastline and on the continental shelf, have done remarkably well. They have profited from subsidies, from tax concessions, from help by the Bureau of Mineral Resources and from the allocation of vast graticular blocks. All of these matters have presented vast and wonderful advantages to oil companies. When we try to answer this current question of what taxpayers should pay in order to bring about, in country centres, the differential of 3.3c a gallon above the price of petrol in capital cities we should look at what happens with regard to oil companies and the prices at which they sell their petrol in capital cities. I note that the retailers' margin for standard grade petrol is 5.7c a gallon in Sydney, 6.5c a gallon in Melbourne, 6.3c a gallon in Brisbane, 5.3c a gallon in Adelaide. 5.8c a gallon in Perth and 6.5c a gallon in Hobart. For super grade petrol the retailers' margin is 5.7c a gallon in Sydney, 6.6c a gallon in Melbourne. 6.4c a gallon in Brisbane, 5.7c a gallon in Adelaide, 5.8c a gallon in Perth and 6.3c a gallon in Hobart. There is no uniformity; there is no standard; there is no basis upon which the Government could look at this question and say: "This is the standard that we might well adopt in trying to equate prices in country centres to achieve this differential which obviously must be a very great benefit to people in country centres'.

Before the original legislation was introduced there was a vast difference in the price of petrol in country centres. Whilst this legislation deals only with the wholesale price of petrol in country centres, I think it is necssary that we should look beyond that. The utmost care should be observed, and the utmost scrutiny should be exercised, by Commonwealth officers and by State officers too, in order to see that petrol is sold to the people at the right price. It is all very well to say that petrol will be made available to the large distributors at a certain price, but we must go beyond this sort of. conception. I ask the House: Are the prices that are presently being charged to consumers the just and correct prices? I think that we should watch the situation more closely in order to see what is happening and to ascertain whether corrective legislation is required to police this type of approach to the sale of petrol in country centres.


Mr Clyde Cameron (HINDMARSH, SOUTH AUSTRALIA) - You seem to have a bias in favour of the country centres.


Mr LUCHETTI - As the honourable member for Hindmarsh has pointed out, I am interested in country centres. Obviously the Labor Party is interested in country centres because mainly from the country centres we derive the great wealth which helps to stimulate this nation, promote development and maintain our balance of payments position overseas. 1 think the honourable member will readily agree that that is a correct assessment of the situation. Petrol is distributed at some 5,000 locations in Australia. This number might well increase as a result of this legislation, which provides that this differential of 3.3c a gallon will apply regularly in these centres. I want to put to the Parliament that while this differential of 3.3c a gallon may seem to be a reasonable one, we ought to take a further step. If we can establish the situation in which the wholesale price of petrol at various locations does not exceed the capital city price by more than 3.3c a gallon, there is no reason in the world why we cannot have a uniform petrol price throughout the country. If it is good enough to have a uniform price for postage stamps and for other facilities then for the sake of development and decentralisation in Australia we ought to aim for the objective of achieving a uniform price for petrol throughout the Commonwealth of Australia. This is necessary.


Mr Clyde Cameron (HINDMARSH, SOUTH AUSTRALIA) - You are a country member.


Mr LUCHETTI - I am a country member, but I believe that I speak for most Australians who view this situation as a national question and not as a parochial one, I think we ought to face the reality that it is necessary to try to achieve a uniform price for petrol for all people in Australia. If this aim can be achieved by the oil com panies, which have done remarkably well, making some sacrifice, 1 think it would be well worth while. The profits of oil companies are well known to most honourable members. They are substantial; they are massive. Over the years oil companies have made tremendous profits. 1 should like to think that honourable members will give some consideration to the needs of the people of Australia, particularly those in the country who are suffering great hardship because of the burden of increased costs and prices which affect primary industry, secondary industry and many aspects of the private home life of people who live in remote areas. We owe this to the people, and I believe that the Parliament will do something worth while if, in the future, it can implement progressive policies along the lines which 1 have indicated. I am confident that an incoming Labor Government with thoughts of decentralisation and development will build on this type of legislation to make an effective contribution to the nation.

The legislation is all right as far as it goes, but it does not go far enough. Freights, which may be altered from lime to time, can hardly be covered effectively in legislation of this kind. Those who distribute petrol may claim that their costs have increased. This benefit is then denied to people in country centres, and they deserve to be protected from such an occurrence. The Minister for the Interior (Mr Nixon), in his second reading speech, said:

As there have been some changes in freight and other distribution costs since the scheme was introduced it is proposed to update the subsidy rates to take these changes into account.

But the legislation cannot deal with what is happening now. It can deal with problems that arise over a period of 3 years or a longer period, but it cannot deal with the constant changes that are occurring. I would like to know what is happening today in many of the remote, outback parts of Australia where the people do not profit fully from legislation of this kind.

The Minister also said:

The legislation now before the House proposes to amend the Act to allow the Government to update the schedule of subsidies using the latest available freight differentials. These new schedules using the updated differentials are now being compiled.

I would like to think that we had something positive before the Parliament, some yardstick that would enable us to determine just what is taking place and the amount of money that the Commonwealth is required to provide. This is not stated. The legislation is vague and indefinite. There will, of course, be reviews. They are necessary to try, even belatedly, to check anomalies and the sins of omission and commission that may occur. Perhaps the remote questions of the profits made by oil companies and the need for a national fuel policy are not directly related to this legislation, but I submit to the Parliament that we cannot deal effectively with all these matters until we measure the whole of the fuel requirements of the nation and its resources and apply our potential in the best interests of the people.

The Opposition welcomes the legislation in the form in which it is submitted and to the extent that it has gone. We consider that more could be done, but for the present we accept it. We wish the Bill a speedy passage.







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