Fair Trading (Fuel Pricing Information) Amendment Bill

Introduction and First Reading

Received from the House of Assembly and read a first time.

Second Reading

The Hon. R.I. LUCAS (Treasurer) (18:28): I move:

That this bill be now read a second time.

I seek leave to have the second reading explanation and the detailed explanation of clauses inserted in Hansard without my reading them.

Leave granted.

The Fair Trading (Fuel Pricing Information) Amendment Bill 2020 seeks to introduce a scheme for real time fuel pricing for greater price transparency. The government committed to investigate the feasibility of introducing a mandatory fuel price disclosure scheme in SA to increase fuel price transparency for consumers.

In the face of conflicting evidence, the Premier referred this matter to the Productivity Commission for its specific economic and competition policy expertise. The commission was asked to investigate and report on policy models that would enable consumers to make more informed choices when purchasing fuel. The commission delivered its report on 18 March. Relevant factors considered by the commission included the net benefits of the policy models used in other states, the current South Australian regulatory environment and the cost effectiveness of the models.

The commission set itself four tests that needed to be met to justify government intervention in the market:

1. the scheme must improve the scope, quantity and integrity of fuel price information available to consumers;

2. be taken up by consumers;

3. be acted on by consumers; and

4. provide benefits to consumers that exceed the costs of regulation to retails and to government.

The Productivity Commission considered two policy models for government intervention against the assessable criteria (in addition to the status quo). These models were the compilation and publication of real time fuel pricing information (commonly known as Fuel Check) or the reporting and fixing of fuel prices for 24 hours (commonly known as Fuel Watch).

Whilst the Productivity Commission did not make formal recommendations, its analysis of these policy models greatly assisted the government and we have proceeded with the model that best met those policy objectives. The report has been considered and I advise the house, that the bill will allow the implementation of a fuel price monitoring scheme consistent with the Fuel Check model. This is the model that the RM has been calling for and which delivered net benefits to consumers in New South Wales, Queensland and the NT.

The fuel pricing information scheme will require retailers to report prices, which will be made available to consumers to make informed choices about their purchases. The details of the scheme will be set out in regulation, which we will be consulting on and have been provided to members. Specifically, we will seek feedback from industry and individual retailers in relation to the practical implementation of the policy model.

I would like to stress that the evidence regarding fuel pricing schemes impact on pricing averages remains inconclusive. The aim of this scheme is rather to increase fuel price transparency overall and to provide more accurate and reliable information to consumers to better inform them when purchasing fuel. By providing consumers with a better understanding of the fuel price cycle, it will create a greater opportunity for consumers to take advantage of the lowest point of the cycle and in turn benefit from potential savings.

Subject to the bill's passage through parliament, we will undertake a procurement process to engage a third party data aggregator to collect fuel price information from retailers and a data matching service to help verify price information. Private app developers will be able to access this data via an API free of charge, consistent with the model implemented in Queensland.

To assist with compliance and enforcement, Queensland also contracts with another provider who can access fuel card data. This data shows the price paid in real time transactions. The Queensland government pays for this organisation to match this against the prices provided to the data aggregator. A report is then provided to the government outlining any price mismatches that require investigation. A similar approach will be taken here in South Australia to assist compliance and enforcement activities undertaken by Consumer and Business Services. This scheme will run initially for a two-year trial period to ensure its stated benefits are met. I commend the bill to the council.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Amendment provisions

These clauses are formal and the measure would commence on assent.

Part 2—Amendment of Fair Trading Act 1987

3—Insertion of Part 6B

This clause inserts a new Part 6B allowing for the establishment, by regulation, of a scheme for the dissemination of real-time information relating to fuel pricing by fuel retailers. The section also creates a series of offences (punishable by a maximum fine of $10,000 or an expiation fee of $315) to enforce compliance with the scheme by fuel retailers.

Debate adjourned on motion of Hon. I.K. Hunter.