SUBJECTS: Fuel prices, FuelWatch Scheme
The policies of the Federal Government and the Opposition on fuel prices are again expected to be the subject of heated debate in Parliament today. The Assistant Treasurer, Chris Bowen, is insisting, this morning, that Australians realise there’s only a limited amount the Government can do about rising petrol prices.
The Government’s under fire over the revelation that one of its own Ministers admitted that the proposed the FuelWatch scheme wouldn’t help those ‘working families’.
Chris Bowen is speaking to News Radio’s Steve Chase.
STEVE CHASE:
Mr Bowen, several months ago you told me and News Radio listeners that there wasn’t much that the Government could do about petrol prices. Do you still hold to that view or do you think that you’re getting some traction on the issue of rising petrol prices?
CHRIS BOWEN:
Oh look what I said a few months ago and what I say today is that Government can make a difference at the margins. We can’t stand like King Canute and stop the increase in world oil prices; but we can take measures to ensure there’s more competition and more transparency in the petrol market – and that helps. Does it stop the world oil price rises? No.
Does it stop them flowing through to Australian prices? No, but it helps at the margins.
I think that most Australians understand that the Government is limited in what it can do but they expect us to do what we can; and that’s exactly what we’re getting on and doing.
CHASE:
But there is an expectation out there, isn’t there, that your Government was elected to do something about petrol prices; and it would appear, at this stage, that you’re having trouble delivering?
BOWEN:
Well, what we said before the election is that we’d take steps to put more competition and transparency in to the petrol market; and we’ve said, the Treasurer’s said, the Prime Minister’s said, very clearly – the now Treasurer and Prime Minister said very clearly – that doesn’t guarantee that prices are going to come down – that’s dependant on world factors; but it does guarantee that prices will be as low as they possibly can be, given international factors.
That’s exactly what we’re getting on and doing, by: increasing the powers of the ACCC; appointing the Petrol Commissioner; and proposing FuelWatch. I think Australians do recognise that the Government is doing its bit and doing its best to put more competition and transparency into the market.
CHASE:
Now the nuances of what you’re saying now, 6 months after the election, wouldn’t have been apparent in the hurly burly of the election campaign. Wouldn’t there have been a very simple message: that you elect us and you would get cheaper petrol?
BOWEN:
Well, we take the view that you’ve got to be clear during an election campaign on what your commitments are; and we were. We said: petrol prices are a concern for the Australian people and we’ll do what we can to put downward pressure on petrol prices through increased competition and transparency.
We had specific commitments: a Petrol Commissioner and ACCC powers. We did those early in our term. Then we received the ACCC’s Petrol Report: we considered that, we worked closely with the ACCC and we’ve developed the FuelWatch model, which goes further than our election commitments. So we didn’t; of course we were very careful with our commitments to ensure that we didn’t mislead people. We would do what we could to put more transparency and competition into the petrol market. That’s what we’re doing: delivering on those commitments.
CHASE:
So you’re still going to deliver on bringing in FuelWatch in December; but you’d be aware of the comments, wouldn’t you, this morning, of one Western Australian independent petrol station owner, Chris Murphy, who’s told The Australian that this system only helps major oil companies manipulate the price of petrol? What do you say to him?
BOWEN:
We were always aware that this was going to be a controversial scheme. I said that on the day we announced it, that this would be controversial, that it would attract some criticism but on the balance we think it’s the right way to go.
Now if you look at the evidence from Western Australia the number of independent retailers, as a proportion of the total, has gone up not down. Independent retailers in the petrol industry are doing it tough around the world. There has been a reduction in the total numbers in Western Australia; there’s been a reduction in the total numbers in every other state and territory, and in most Western countries around the world – it’s a worldwide phenomenon. In Western Australia the proportion of independents, as a part of the total, has gone up; so I think the argument that independents are somehow put at a disadvantage is difficult to sustain.
CHASE:
I spoke earlier today to the Federal Chamber of Automotive Industries’ Chief Executive, Andrew McKellar, who, as you would be well aware, is campaigning against the Budget measure to increase tax on luxury cars, that would net you some half a billion dollars in revenue. He’s also talking about the possibility that, coupled with petrol prices, the pressure that this measure would put on the industry would possibly lead to job cuts.
BOWEN:
Well, we gave this measure a lot of thought. We thought about all the potential ramifications. We worked through all the issues, and on balance, given the fiscal situation, we decided that this was a necessary tax to increase; and it was one way of equitably sharing the burden of the need to reduce government expenditure and reduce, in net, Government’s fiscal position.
I understand that organisation’s position. They represent a certain industry that is part of the Australian economy and they’re entitled to put their case. On the balance, we think this is an appropriate measure and you always find industry groups putting the negative case and putting the worst possible ramifications. That’s the nature of the political situation that we live in.
CHASE:
One final question to you, Mr Bowen. Overnight we had news through from the UK that truck drivers have been staging action in France, Spain and Britain, over the rising price of fuel. Is that something that the Government may be planning for here: if truck drivers see that their livelihoods are threatened by petrol prices, that they may take action to close certain sections of the country down?
BOWEN:
Well it certainly underlines the point that it’s an international phenomenon at the moment and that Australia’s not one out. The truck drivers in Britain are paying a lot higher petrol prices than we are in Australia and that’s probably what’s leading them to take that action.
Look, we’re very aware that truck drivers and others are very concerned about this issue and feel very strongly about it; and will continue to do so. That’s why we are reassuring people that we are doing whatever we can to put downward pressure on prices through the measures that we’ve implemented since the election.