SUBJECTS: Petrol pricing, ACCC
OAKES:
Mr Bowen welcome to Sunday.
BOWEN:
Morning Laurie.
OAKES:
You've had the Australian Competition and Consumer Commission monitoring petrol prices over Easter. What reports have you had from them so far?
BOWEN:
Well the ACCC has been very active in the lead up to Easter, to ensure that there is no price gouging, ensure there is no anti-competitive conduct.
One of the things we have in Australia is a weekly price cycle where prices go up and down at different times of the week.
I spoke with the ACCC chairman Graeme Samuel last night, he informed that across the country on average; the types of rises we have seen in the lead up to Easter are broadly in line with the types of rises we see every week.
So one of the concerning things, one of the really frustrating things for consumers is this weekly price cycle which nobody understands and no body can explain, the oil companies can't explain. That is the bigger problem, that's what we see week after week rather then any particular price rise this week.
OAKES:
Well I suppose what consumers want to know whether they understand that phrase or not is are they being ripped off?
BOWEN:
We do have what the ACCC has called a comfortable oligopoly in petrol pricing in Australia. That's why the Rudd government is determined to shine a light on petrol pricing in Australia to get more transparency and more competition. But in the terms of this week, the types of price movements we have seen are by and large, there have been some rouge operators here and there, but by and large what we see every week in terms of prices going up later in the week and then coming down earlier the next week.
OAKES:
The NRMA says we are being charged up to a $1.50 a litre on the start of Easter when the Singapore bench mark price is estimated to be a $1.36 a litre or there about. So that would suggest we are being ripped off wouldn't it?
BOWEN:
We do see form time to time a divergence between the price of oil in Singapore and the price of petrol in Australia and that's why we have given the ACCC increased powers.
Increased investigatory powers which they have exercised already when they see that divergence between the price of oil in Singapore and the price of petrol in Australia, they exercise those powers they write to the petrol companies and say you need to explain yourself.
Now last time we saw that happen a few weeks ago when those powers were exercised we saw the divergence come back to normal levels. There will always be a difference because of transports costs, refining costs and profit margins etc but we have seen that divergence return back to normal levels. But we need to continue to ensure accountability and transparency in petrol markets and that's what we'll continue to do, there's more to do.
OAKES:
The NRMA says you need to give the ACCC even more power. The president Alan Evans says that ‘catching oil companies ripping us off is one thing but having the powers to order them to drop their prices and keep their prices low after they have been caught making exuberant profits is the only way to bring real change'.
Will you give the ACCC those powers?
BOWEN:
I've said to both the ACCC chairman Graeme Samuel and the Petrol commissioner Pat Walker if they need more powers all they have to do is ask. If they ask that would be very favourably looked upon by the government.
We need to let these people get on with their job, this is Australia's first petrol commissioner lets let him get on with his job, lets see how he goes if he needs more powers I know he won't hesitate to ask for them and I know the government wont hesitate to give them to him if their needed.
OAKES:
On the subject of Mr Walker the new petrol commissioner, how is the Prime Minister so uninformed and ignorant last week that he thought Pat Walker would be monitoring prices over Easter when in fact he doesn't even start the job till the end of the month?
BOWEN:
There is a statutory period under the law Laurie, under the Trade Practices Act for the appointment of a new ACCC commissioner and that statutory period had to be worked through.
But I can assure you I've been speaking to Pat Walker, Graeme Samuel has been speaking to Pat Waker, he may not have formally started but he certainly has been advising and assisting the government everyday on what we should be doing about petrol prices. Graeme Samuel has been in contact with him as well.
He formally starts next week under the statutory period but his been involved in everything we've done. He and I and Graeme Samuel have had conversations and we've made sure he [Mr Walker] has been in the loop and been aware and happy with what were doing.
OAKES:
The Prime Minister said he would be monitoring petrol prices over Easter, that's patently untrue. How do you explain a workaholic control freak which Kevin Rudd is supposed to be was not across such an important detail?
BOWEN:
I think the point the Prime Minister was making was that the ACCC in conjunction with the Petrol Commissioner will be particularly active, and they have been in the lead up to Easter. As I said Graeme Samuel has been talking to him, Graeme Samuel and Pat Walker together hold the formal investigatory powers which the government has granted the ACCC and they have been working together on that.
The Prime Minister was making the point that we have a very activists policy here, that the ACCC wouldn't be sitting back letting this comfortable oligopoly operate in the lead up to Easter without accountability and transparency that together the ACCC Chairman and the governments nominee for Petrol Commissioner Pat Walker will be ensuring as much accountability and transparency in the lead up to Easter as we can possibly deliver.
OAKES:
Well keeping petrol prices down was a big part of Labor's election pitch and yet now you are going to increase the price of petrol through your climate change policies. How do you reconcile that?
BOWEN:
We went to the election with the election with a very clear policy on climate, on emissions trading - cap and trade. We also went to the election with a very clear policy of introducing more accountability and transparency and competition into petrol prices. Now we don't regard those as being contradictory.
We don't think the way to deal with climate change is to let a comfortable oligopoly to operate. We don't think the way to deal with climate change is to keep consumers in the dark about petrol prices. Now the cost of dealing with climate change is less than the cost of not dealing with it. That's the decision the Australian people made clearly on November 24th. They voted for a government which would take the tough decisions in this field. There are no contradictions.
We are doing both of those things and we are doing them at great speed because it is important that we deal with climate change. It is also important that we deal competition and transparency in the petrol market and they are certainly not contradictory.
OAKES:
But do you except that an emissions trading scheme will push petrol prices up?
BOWEN:
There is a way to go on this Laurie; there is a lot of water to go under the bridge. We have seen a draft report this week from Professor Garnaut. The government is going to be releasing a green paper in the middle of the year and as I understand it, draft legislation toward the end of the year.
This is a very significant economic change, as big in my view as trade liberalisation or financial deregulation in the early 1980s. That will be the sort of impact we will see on the Australian economy. There's a lot of detail to be worked through, including compensation measure to lower income earners who need assistance in adjusting to this new regime.
That's the sort of detail that Penny Wong, Peter Garrett, Wayne Swan and myself will be working through over coming months.
OAKES:
But Professor Garnaut himself says that petrol prices will rise. Why won't you say it?
BOWEN:
Well there's no doubt that there will be impacts on petrol prices from a wide range of factors - world oil prices and climate change - all of these elements will have an impact. But that underlines the need to ensure when there are these impacts on petrol prices in Australia, it is particularly important to ensure that people aren't paying one cent more than they need to, through competition - that we have enough competition and transparency in the petrol market. That's why none of these policies are contradictory; they are complementary to each other.
OAKES:
The reason I'm pushing you on this is, you've got Professor Garnaut saying petrol prices will rise, but when you were asked about this on December 18 at a news conference, you said ‘we do want to cut greenhouse emissions, of course we do. But we don't believe the way to do that is to put more pressure on working families through petrol costs.' Well petrol costs will go up won't they?
BOWEN:
What I was saying in that press conference, is that we don't believe the way to deal with climate change is to leave a comfortable oligopoly unchecked. We don't believe that the way to deal with climate change is to leave Australian consumers in the dark with their petrol prices. Now as I say, there will be impacts on petrol prices from a range of factors as we said in opposition. We said in opposition that the biggest impact on Australian petrol prices is world oil prices but we believe that we can do more to shine a light on petrol pricing in Australia and that's what we are doing.
OAKES:
Will the government consider excluding petrol from emissions trading scheme?
BOWEN:
Well as I say Laurie, there is a long way to go on this. The government's Green paper will be out in the middle of the year, the draft legislation towards the end of the year, compensatory policies to considered, so I wouldn't want to go through ruling things in and out at the moment. There is a long way to go. This is a very important economic change, a very substantial economic change, and the detail will be clear as the government works through these issues.
OAKES:
Isn't it true that Europe has an emissions trading scheme that excludes petrol and some American states are looking at a scheme that also excludes petrol?
BOWEN:
Well these are the sorts of things we need to way up. We need to have a regime that cuts emissions, but which doesn't put an undue impact on those who can least afford it. That's where we are coming from and I can assure you, we will be working very hard to reach that balance.
OAKES:
The argument to justify excluding petrol seems to be that it is such an essential to people and usage habits are so fixed that price rises won't effect consumption anyway. Do you except that?
BOWEN:
These are all issues to be worked through. Petrol is a very important commodity for working families, for small businesses, and for the economy as a whole. We need to be very careful about its impacts. We also need to be very mindful of its environmental impacts. One thing that I can assure you, is that will be plenty of debate, plenty of consultation, and we will be striving to get that balance right.
OAKES:
Okay, a couple of quick issues before we finish. The News Limited Sunday papers report today that the Maritime Union of Australia believes that it has strong support from Mr Rudd for a return to pattern bargaining. Is that true?
BOWEN:
No, we have made it clear in opposition and in government that we don't support pattern bargaining and we have governed like we promised we would. We have sort to strike a balance in workplace relations, the balance went too far one way, we have brought it back to the middle. We have governed like we said we would and the reports about pattern bargaining is as I understand it wrong.
OAKES:
So the Prime Minister wouldn't have given that assurance at the Australia Day meeting.
BOWEN:
Well I understand that Mr Crumlin was at the Lodge with a number of other people as part of a function. That's the advice to me. But Julia Gillard has made it plain as Kevin Rudd has, that we don't support pattern bargaining, we support enterprise bargaining. We support an enterprise focus. We support a focus on productivity. We don't support pattern bargaining across the economy.
OAKES:
Well the same leaked document apparently claims that Mr Rudd agreed to give the union access to personal security information collected by the government about so-called ‘scabs' who crewed non-union ships. Is that true?
BOWEN:
Well any personal security information will be treated with the respect under the law that it should be.
OAKES:
Okay, the Sun Herald reports that five men are to be charged over the Liberal Party's Lindsay leaflets scandal. Are you across that? What's the government's reaction to that news?
BOWEN:
It appears that it will now be before the courts and that's where it should be, so I wouldn't comment on the details of that case. The Labor Party made our views plain at the time on what we thought about these sorts of tactics. We made it plain, that we thought at the time about these sorts of misleading tactics, which demonise one particular group in the Australian society, but now that this is before the courts we wouldn't be making any further comment on that. That's where it should be and that's where it will remain.
OAKES:
Mr Bowen, we will let you get back to your wife and we thank you.
BOWEN:
Thanks Laurie, thank you very much.