Legislative Council Fifty-Fourth Parliament, Second Session (54-2) 54 2 Parliament of South Australia Legislative Council published Bills Fuel Watch Bill Fuel Watch Bill Fuel Watch Bill Second Reading Second Reading Adjourned debate on second reading. (Continued from 17 June 2020.) The Hon. K.J. MAHER Legislative Council Leader of the Opposition The Hon. K.J. MAHER (Leader of the Opposition) (17:55): I rise to speak on this bill on behalf of the opposition, and indicate that we will be supporting this legislation. This bill seeks to establish a system under which fuel retailers must publish a price that remains in place for 24 hours. Motorists would then be able to find the best deal in their area or along their transport route. The bill also includes provisions for the Essential Services Commission to undertake investigations into fuel pricing. Using both of its key provisions, it supports competition and a more effective marketplace that aims to benefit consumers. The people of South Australia have waited far too long for this issue to be addressed. Two years and four months ago the people of South Australia were promised action at the state election, and nothing has been delivered by this government. This is the sad history. At the 2018 state election Labor, the then Liberal opposition and SA-Best all promised real-time fuel pricing. In opposition the member for Gibson, the Hon. Corey Wingard, said that the Liberal Party was looking at options of publishing petrol prices to put downward pressure on prices. He said: South Australians are paying some of the highest household bills in the nation and need greater state government support— and— Easing the cost of living pressures will be a major focus of the Marshall Liberal government, if we are elected in March next year. Following the election the Attorney-General, the Hon. Vickie Chapman, promised that the state government was committed to immediate reform. At the end of March, on 28 March 2018, the Attorney-General was quoted in The Advertiser as saying: …the state government is working through the legislative changes required to implement real-time fuel pricing information. That was March 2018. As with many comments from our Attorney-General, one needs to be incredibly careful about relying upon them. We cannot be sure if the Attorney-General was just saying what she thought the public wanted to hear or was just saying something to kick the can along the road. Regardless, more than 20 months after that comment the Premier himself completely undercut the Deputy Premier. On 19 December 2019 the Premier was criticised on FIVEaa radio for backing away from the commitment on real-time petrol pricing. The Premier said there was: …plenty of evidence around the world that by providing the data it can be used to game the market and actually increase the prices for consumers. After 20 months of promising action, allegedly working on legislation, the Premier then suddenly claimed that such a scheme might be bad for consumers. Worse, the Premier seems to think it is a good idea for the public to have information hidden from them. We travel along and then, on 18 December last year, immediately before being criticised on radio, the Premier referred the matter of petrol pricing to the South Australian Productivity Commission. A report was completed in March this year, but the conclusion has a surprising quote from the Productivity Commissioner. He said: The commission was asked to investigate potential models for improving the transparency of fuel prices in SA and improving information available to motorists when buying fuel. It was not asked for recommendations. The Productivity Commissioner says that the Productivity Commission was not asked for recommendations. It is a great irony that the Attorney-General, when debating this legislation in the other place, referred to the recommendations from the Productivity Commission which the commission stated they were not asked for. The Attorney-General did this to argue why this particular bill should not be supported and why the parliament should support the government's alternative bill. It is not enough to say that the government sat on their hands on petrol pricing; they have misrepresented their very own reports. When criticised for going silent on the issue, the Attorney-General tried to criticise Labor. She said: From time to time, they come out and bleat, 'Oh, it has taken the Liberals so long to actually get on with this,' or, 'They should be hurrying this along.' If this was the hare and the tortoise, let me tell you, we are the hare. For the benefit of the Attorney-General and the government, in the fable of The Tortoise and the Hare, the tortoise wins because the hare falls asleep halfway through the race. We completely agree with the Attorney-General: the government and the Attorney-General are the hare in that fable. They have stopped midway through the job and have done nothing whatsoever. After doing nothing for nearly two years, the Premier then demanded that the Productivity Commission do as little as possible. At the conclusion of the Productivity Commission's report, the commission goes on to say: The Commission was not asked to develop a business case or to address detailed design matters, which would of course affect the costs of implementation. It is damning that after doing nothing for two years, the Premier then demanded something from the Productivity Commission: to do as little as possible and not to recommend anything. It beggars belief that this is how this saga has gone on. After two years, in which the government was allegedly working on legislation that the Premier then said could be bad for consumers, we now find that the government's alternative proposal is to make regulations that will support a trial which, very tellingly and conveniently, will not end until after the next election. This is why the opposition supports the bill brought into this place by the crossbench. The government have gone slow even after they made an election promise, despite having the whole of the Public Service to help them deliver it. In the interim, the crossbench undertook research and consultation to develop their model. The RAA's submission to the Productivity Commission report on this matter refers to analysis by the Australian Competition and Consumer Commission that Adelaide motorists—not South Australia as a whole, but Adelaide motorists—could be saving $30 million to $75 million per year from a fuel pricing scheme. Because of this government's very deliberate delays, Adelaide motorists—just Adelaide motorists, let alone the whole of South Australia—may be more than $150 million out of pocket over those two years. This is another reason to act now. When it comes to fuel pricing, this government has not done what they said they were going to do. They have contradicted themselves over and over again. Ultimately, it was only when an Independent member of parliament—and I pay tribute to the Independent members of parliament, particularly the member for Florey, who introduced this bill, and the member for Frome—for putting this firmly on the agenda. It was only due to their actions that the government sought to address the matter. Again, that was after two years of complete inaction and pretending they were working on legislation. Towards the end, the Premier was saying that it might actually be bad for consumers. They obtained a Productivity Commission report which did not ask for recommendations or a model. It was only once our hardworking Independents in the lower house put forward a model, as put forward in this place by SA-Best, that the government decided to try to take a shortcut and get there first. We have seen this with the bill we have just debated. On the day the previous bill we debated came to this chamber, the government put out a press release saying that they were going to do something about it. The government has form in doing this. We support this bill. Without debating the other bill, we think both bills have merit. There is merit in both schemes, but I have to say that we are not going to wait for the government to come forward with their scheme and to get a scheme up and running. They have had two years of inaction at a cost of $150 million to Adelaide motorists, and more if you include the whole of South Australia. The good people of Port Pirie are paying far too much for petrol. This bill could address that. The good people of Mount Gambier are paying far too much for petrol. This bill could address that. The good people of Adelaide are paying up $150 million more than they should have for the two years of complete government inaction. The Labor Party is not going to stand in the way of either bill. Something needs to be done; it needs to be done now. We thoroughly commend the bill that is before the chamber now and I indicate that we will be very strongly supporting it. The Hon. T.A. FRANKS Legislative Council The Hon. T.A. FRANKS (18:05): I rise on behalf the Greens to support this bill and I do commend the work of the crossbenchers, SA-Best's the Hon. Frank Pangallo, and indeed, in the other place, the member for Florey for her sterling efforts. Given that we are in the time of the dinner break and that has taken a long time to come before the parliament, I simply indicate that the Greens do support the bill. We prefer the government's bill. We understand that the government bill has now passed the other place. If this is truly the time where we have resorted into Aesop's fables and tortoises and hares, we look forward to the hare or the tortoise actually running its race and we could be passing this legislation through both houses of parliament tomorrow. The Greens indicate that we are willing—given we have already long debated this matter and given all sides of parliament seem to agree that we need to fix this—to support this bill tonight to continue the race, but we look forward to the government bill, which will be with us shortly. We look forward to legislation being passed by the end of the week no matter who has their name on that piece of legislation at the end of the day. The Hon. R.I. LUCAS Legislative Council The Hon. R.I. LUCAS (Treasurer) (18:06): On behalf of the government, I indicate the government will be opposing the Fuel Watch Bill. Last night, the government's own model or bill, the Fair Trading (Fuel Pricing Information) Amendment Bill, passed the House of Assembly. Mr President, I am advised that sitting on your desk is the message from the House of Assembly, which we will note and I will introduce, time willing tonight, the second reading for the government's bill in this particular house this evening before we get up. I follow the statements from the Hon. Ms Franks and the broad indication from the Hon. Mr Maher that, whilst we would not normally do this tomorrow, the government remains open that if all members, including the Labor Party, do not oppose it being considered tomorrow—and the Hon. Ms Franks has indicated that she is prepared to consider it and I look directly at the Hon. Mr Pangallo and see he is nodding, so he is prepared to do it tomorrow—then we will proceed with it. As long as the Labor Party is prepared to consider it tomorrow, the government's model can be considered tomorrow and voted upon in terms of getting something up and going. Given the government is opposing this particular bill, even if it were to pass this chamber, it will not be passed by the House of Assembly. The other bill has the opportunity to be passed by both houses of parliament by the end of the session tomorrow and then it can be in the process of being implemented. For anyone who is therefore wanting a fuel pricing information bill, there will be a model that will pass both houses of parliament. The government bill allows for a real-time fuel pricing system to be established in the regulations. Draft regulations have been circulated to the opposition and crossbench to provide further insight into the details of the scheme intended to be implemented if the government's bill passes the council. The government's bill is the model found by the Productivity Commission to meet the most policy objectives of such schemes designed to increase transparency of fuel prices and to enable customers to make informed choices when purchasing fuel. It has helped consumers find savings in New South Wales, Queensland and the Northern Territory. It is the model the RAA has called on the parliament to implement. The Hon. Mr Pangallo's bill largely mirrors the member for Florey's amendments to the government's bill, which were debated and defeated in the House of Assembly. The Fuel Watch scheme advanced has only been used in Western Australia and, in the approximately 20 years it has been in use, no other jurisdiction has seen fit to follow it. The Productivity Commission estimated that Fuel Watch would impose higher compliance regulatory costs on retailers than the Fuel Check model. Additionally, this bill seeks to impose reporting requirements on fuel wholesalers. It is a concern that an increase in compliance costs in two points of the supply chain could lead to a negative impact on prices for consumers. The estimated net benefit of this proposal is unclear. Western Australia has a seven-day pricing cycle, where Monday is regularly the cheapest day. There is no evidence to suggest that the implementation of Fuel Watch will lead to the fuel pricing cycle here dropping to this level of predictability and certainty. There are many factors that influence fuel pricing cycles beyond regulatory arrangements. The Attorney-General's office has facilitated a briefing for the Hon. Mr Pangallo with the Productivity Commission. Notwithstanding this and their findings, and in addition to the RAA's advocacy, the Hon. Mr Pangallo—as is his right—believes that his fuel watch bill is a better policy model to implement. The government also expresses concerns about other aspects of this particular bill that are distinct to the policy model chosen. Some of the government's concerns are as follows: firstly, that some of the functions delegated to the commissioner are more properly the function of the ACCC and beyond CBS's remit and expertise; secondly, the inclusion of wholesale fuel prices is in the scheme, which was not considered by the Productivity Commission or has been taken up by any other jurisdiction; thirdly, the power to refer retail fuel prices to the Essential Services Commission without any consultation with ESCOSA or any idea how or what may be achieved by such a referral; and fourthly, the capacity for the Treasurer to create a fuel subsidy scheme without any consultation I might know with the government. This is clearly a proposal the government is not rushing to adopt. In conclusion, it is the government's view that there is a proven policy model that is being called for by relevant stakeholders, such as the RAA. It is found to be the most effective model by the Productivity Commission, it has been implemented or versions of it have been implemented in New South Wales, Queensland and the Northern Territory, and it is now ready to be voted upon by the Legislative Council in the next 24 hours should the majority of members agree to that. For those reasons, the government is not supporting this particular bill, and if it was to pass it will not be progressed in the House of Assembly. The government will be calling to a vote—as soon as members are prepared to vote on it—the government's bill, where the second reading will be given for that bill before we rise tonight. The Hon. F. PANGALLO Legislative Council The Hon. F. PANGALLO (18:12): I thank all the members for their contribution on this bill and I thank the member for Florey, Frances Bedford, and her adviser Matt Loader for their sterling work in pulling together this bill; not only pulling together this bill but getting some action from the Attorney-General in the Marshall government. I know that late last night the rival bill by the Attorney-General was passed in the House of Assembly, just. I will make further comment on its content when the bill finds its way into this place. Suffice to say, I do not believe it will deliver the level of benefits that this bill will to long-suffering consumers in this state. The time has come to end all the guesswork and frustration of not knowing when the price of fuel is going to drop and by how much. All the shock of seeing a sudden, almost inexplicable jump, particularly in times when the prices of crude have been at record lows and of unpredictable price cycles in some cases could go on for weeks. What this bill would do is give certainty to drivers about the prices of fuel with 24 hours' notice. It also builds in safeguards that would be a disincentive for retailers to blatantly price gouge or for collusion by referral to the appropriate agency like ESCOSA and the Commissioner for Consumer Affairs. It is not designed to affect the price of fuel but to give consumers adequate knowledge of when to buy and where. It is based on the Western Australian model, which has worked very successfully for nearly 20 years, delivering a lower fuel price in the price cycle. Drivers in Perth know when they can fill up, with ample time to do so. I did speak with the Productivity Commission this week. They were of the view the savings reported by the Western Australians were perhaps overstated. The Western Australians dispute that. They also did not have a view or recommendation on which of the two proposals before the parliament was better. They say that it is for the parliament to decide, but they do note that both options would deliver $3 million to $8 million in benefits to consumers each year. The RAA, which I have also spoken to this week, also do not seem to be fussed which one gets up as long as motorists get a better deal with real-time pricing. The Attorney-General's version follows the Queensland model, which actually has been a failure, contrary to the claims made here. For instance, for the last 45 days or more, they have recorded the highest average fuel price for any capital city. Consumers can save more than $300 a year with this bill, including those in the regions. The government can take wraparounds, I gather, if theirs gets up, boasting their bill and saying that that is a relief and promoting road trips to other getaways. Just briefly in response to some timing issues that have been raised, the lodgement times in the bill are based directly on the Western Australian scheme that has operated for nearly 20 years without protest or issues. Retailers and wholesalers in the Fuel Watch area, metropolitan Adelaide and other gazetted areas, must lodge their time for the next day at 2pm. The price then applies if the retailer is open before 6am until midnight, or otherwise for 24 hours. This caters for fuel stations that are open on a 24-hour basis. If there is concern, it could be moved to make it midnight to midnight for all petrol stations. The South Australian Productivity Commission has indicated that the cost of administration is the same as the cost of administration of the scheme proposed by the government. Referral to ESCOSA is a discretionary power available to the Commissioner for Consumer Affairs. It does not require additional permanent funding and the costs of an investigation inquiry could be factored into the existing budget of ESCOSA. Should there be any evidence of price collusion or market manipulation, then ESCOSA would conduct a proper inquiry. The value of this referral power is as much in the threat of intervention as in the actuality of it, with clear evidence of price collusion in a market that retailers themselves have described as oligopolistic. The ability to intervene on prices is an important tool for regulators. The alternative would be to rely on the ACCC, an interstate national authority with only limited on-ground capacity in South Australia to monitor and intervene in petrol markets. The amendment originated with Mr Brock, but he decided not to proceed with it in the lower house. It can be removed from the bill in the committee stage, and I am prepared to do this. The provision has been added to provide additional incentive for fuel retailers to comply with legislative requirements. In the case of fuel pricing, in relation to the matter going before the courts, it is based on similar provisions in other laws which allow courts to impose compensation or to otherwise recover commercial benefits that have been obtained from noncompliance. With that, I commend the bill to the Legislative Council and move for it to be read a second time. Bill read a second time. Committee Stage Committee Stage In committee. Clauses 1 to 11 passed. Clause 12. The Hon. F. PANGALLO Legislative Council The Hon. F. PANGALLO: I will oppose this clause. The Chair Legislative Council The CHAIR: I will put that clause 12 stand as printed, so you will vote no, the Hon. Mr Pangallo. The Hon. T.A. FRANKS Legislative Council The Hon. T.A. FRANKS: Chair, I did not get that amendment until quite late and I was actually wondering what the reasoning for it was, given it is the mover of the bill opposing his own clause. The Hon. F. PANGALLO Legislative Council The Hon. F. PANGALLO: I will explain that. Clause 12 is in relation to a fuel subsidy scheme: 'the Treasurer may establish a scheme to subsidise retail sales of fuel in parts of the state'. This clause would have allowed the Treasurer to establish a scheme to subsidise retail sales of fuel in parts of the state where fuel cannot otherwise be sold at a reasonable cost to consumers. We do not think that that is actually workable and I am pretty sure that the Treasurer would stridently oppose that, so I am willing to oppose it. The Hon. R.I. Lucas Legislative Council The Hon. R.I. Lucas: Shouldn't have been allowed. The Chair Legislative Council The CHAIR: Do you wish to speak, Treasurer? The Hon. R.I. LUCAS Legislative Council The Hon. R.I. LUCAS: I do, but only on a matter of technicality. If this particular provision is being removed, I am not sure how this bill was not deemed to be a money bill by the council and therefore ineligible to be moved in the Legislative Council. Mr Chair, I will leave that with you and the Clerk and you may well provide advice at a subsequent occasion as to whether this bill was a money bill, because it was seeking to incorporate a subsidy scheme paid for by the taxpayers of South Australia—unknown quantums of money, I assume. If it is seeking to appropriate funding for a fuel subsidy scheme—what is that phrase? If it looks like a duck, walks like a duck and quacks like a duck, it is probably a duck. It sounds like it might be a money bill. Anyway, it is here and it may well be too late to deem it to be ineligible or null and void. At some stage, I would not mind a ruling from you, Mr Chair, based on advice from the Clerk. The Chair Legislative Council The CHAIR: The advice from the Clerk is that it was a money clause, not a money bill. It is being removed, so no question could be put on that clause. If it were deemed essential to the bill, it would be up to the assembly. I will put the question that clause 12 stand as printed. Clause negatived. Remaining clauses (13 to 16) and title passed. Bill reported without amendment. Third Reading Third Reading The Hon. F. PANGALLO Legislative Council The Hon. F. PANGALLO (18:25): I move: That this bill be now read a third time. Bill read a third time and passed.