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House of Assembly - Fifty-Fourth Parliament, Second Session (54-2)
2020-03-25 Daily Xml
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Fuel Watch Bill

Second Reading

Adjourned debate on second reading.

(Continued from 4 March 2020.)

Mr PEDERICK (Hammond) (11:05): I rise to speak to the Fuel Watch Bill as put by the member for Florey. I certainly get the intent of the member for Florey with this bill, but I do not believe that it is the best approach with regard to getting accurate fuel pricing. I know there are various models in place around the country, as far as real-time pricing, and I guess there is no time like the present to think about real time. However, it appears that there are better models that can be utilised.

When we look at the fuel issue, not just in this state but in this country, and how things have changed over many years as far as the processes in regard to whether we are even refining fuel as we used to at Port Stanvac—which is long gone—now we are essentially related to a shipping lane, which is basically our pipeline coming from overseas places like Singapore, for example. It is quite serious, obviously, especially in relation to people such as myself when I was actively farming. It affects farmers especially and people in heavy industries because they buy fuel in bulk. Gone are the days of buying in bulk, where you might only order as little as 900 litres to fill up your unleaded tank or, in the old days, the super tank—that is going back a while.

A lot of orders were made, as far as bulk fuel was managed, in 2,000 or 3,000 litres and perhaps up to 5,000 litres. With the natural course of things—and it is a bit sad in a way—farming has come to a situation where essentially you have to get big or get out. It has always been that way since my father started back in 1933-34 working for his father at Angle Vale. They were not using a lot of fuel then, I must say. When people on the land order fuel now, much of it is ordered in 10,000-litre batches and it is not uncommon for orders to come in semitrailer loads, which may be 25,000 or 28,000 litres or possibly more. You can get reasonable discounts by ordering that amount. Certainly talking about industrial levels, and I guess at the farming level, depending on what size the orders are, people can get reasonable discounts.

However, part of the object of this bill is to ensure that consumers are provided with up-to-date and accurate information regarding the price and availability of fuel. That is the issue: the availability and the sea pipeline that comes to our shores. I have noticed at times, and as we are now moving into the seeding phase on farms within the next month—and some might be going earlier than that on the Far West Coast and in some of the Mallee areas, starting their programs—there will be a lot of diesel coming through.

Despite the current challenges that we are facing at the moment, that fuel needs to arrive—and I understand it will be arriving—because of our food producers. When you look across the country it is absolutely vital that that fuel gets here, because being a country of 25 million people we do produce enough food for at least 75 million people. I just want to reflect on that briefly in this conversation. There have been some—and I am not going to use another word—what I call unusual buying practices in supermarkets in regard to food. It is unusual, and it is not really necessary as far as I am concerned because we have so much food we are producing, and it is great to see some of those great food icons, like the Crottis and the Thomases, getting out there promoting what we can produce in this state, let alone what we produce in this country.

Just as an aside—and this does affect obviously the use of fuel and industry—in regard to the run on toilet paper, I find that bizarre to say the least. I understand that before Kimberly-Clark down at Millicent went to three shifts, at two shifts they were getting out 35 B-doubles of toilet paper a day from Millicent, from our home state here. So I am sure there is probably something around 50 B-doubles a day of toilet paper being sent around the state and the nation. I guess what I am saying is we are not going to run out any time soon, and people have already found, to their individual dismay, that they cannot take it back to the shops. I think the shops should keep that policy in place just so we can get some sensibilities in place in regard to these purchases.

Fuel is absolutely vital for day-to-day running in the community. I absolutely get that. It has come down in recent times because of a price war overseas. I can remember what happened in the seventies. We were going to run out of fuel, evidently. Well, here we are, a long time since then and there is still plenty of fuel around, and there will be for a long time. Despite all the advances in green energy and that kind of thing, I understand that oil growth, as far as using oil goes, is going up exponentially even as we speak. I salute renewable energy as we transition—and I stress the word 'transition'—into it, but it is a fact that oil use has gone up in recent times compared to what it was previously.

I just want to keep reflecting on the vital need for producing that food, because in these times where people do get uncertain about things that are happening in the world, there is this absolute certainty that we can produce great food and fibre in this state. In regard to the run on toilet paper, they are working flat out down at Millicent to produce it. Last time I looked, when I was in the South-East, there were many hundreds and thousands of acres of forest that can be felled, so you are not going to run out any time soon.

I do salute all of our food producers, and I salute them in this time when there is uncertainty around a range of things. I know most of them, especially those that are really super organised, have organised their chemicals to be on site, their fertiliser to be on site, because it is absolutely vital that they get all those supplies, including fuel, to function.

In regard to this Fuel Watch Bill, during the process leading into the last election, the Labor Party and SA-Best, of blessed memory, supported the introduction of mandatory fuel price reporting by fuel retailers. The idea was to put downward pressure on fuel prices and to give consumers greater information about the market to make more informed purchasing decisions.

One thing has always intrigued me with fuel pricing and fuel sales with the proliferation of diesel vehicles now, including many of us in this place driving diesel vehicles. Certainly, in the farming sector it is best to have a diesel vehicle, especially when driving over stubble. There are other stories I could talk about, but I will not be doing that today. Diesel, which is essentially light crude oil, is usually reasonably dearer than more refined fuels like the 91, 95, 98 octane unleaded fuels. I was always intrigued by that. When I was working in the oil field at East Mereenie, we used to get our fuel out of a light crude well. They took the water out of it, separated it out, and we ran all the vehicles on that.

There has been research done in regard to the Productivity Commission for their consideration. We note this bill from the member for Florey, but we will not be supporting it. However, we will be looking at the release of the Productivity Commission's report and the associated government response before moving forward.

Mr TEAGUE (Heysen) (11:16): I am pleased to rise to make what might be effectively some preliminary remarks in response to the bill that has been brought forward by the member for Florey, the Fuel Watch Bill 2020 that is before the house on the Notice Paper today. I have listened carefully to the contribution by the member for Florey in relation to the objectives that she would see furthered by the operation of the bill. I will come in a moment to the structure of the bill and the way in which that is endeavouring to do that work. Suffice to say at the outset, the bill would impose a combination of reporting requirements and price freezing measures with penalties attached and would render the Commissioner for Consumer Affairs responsible for the implementation and oversight of those measures.

One might reflect on the balancing act that is to be achieved philosophically in imposing a regulatory regime that has characteristics of price control and price fixing. What we know is that the member for Florey, like others in this place, is responding to what has been significant and sustained community awareness and concern about what has happened over a period of time. This is not only a South Australian issue but a national one. It may be a matter of concern in other countries around the world as well.

The issue is about what might be described as 'dramatic fluctuations' in fuel pricing from day to day. My community has observed from time to time what might be seen as fluctuations occurring in an apparently consistent manner in any given area such that a consumer might be arriving to refuel on a given day and find that the price was at one level, perhaps a relatively attractive level, and the next minute it has dramatically changed.

Those concerns have arisen, and there has therefore been concerted consideration around the country about how consumers can receive maximum transparency in a market and how the market can be most predictably accessible to consumers, with a view to fairness. That is where we all start from. It would be perhaps fair to observe there is a degree of commonality about that starting point. Nobody wants to see people stuck with suddenly and unpredictably having to pay a whole lot more than they might have anticipated for an essential commodity. Fuel is certainly an essential commodity for people getting around day to day in their work and daily lives.

As the member for Hammond observed just now, it is perhaps apposite to observe that we might see a different scope of fluctuation going on with respect to different fuel types. I think 20 years ago it might have been fair to say that the bulk of people getting around on our metropolitan roads in their daily drives would have been driving petrol-driven cars. I might extend that a step further to say typically four and six-cylinder petrol cars. That was very much the norm.

That whole picture has been changing, just as the technological landscape has been changing over the last generation. We now have a significant proportion of people in the metro area, let alone in our country areas, whose daily drive is diesel powered, or a combination of diesel or petrol with electric power. Indeed, we have seen—and this is still new news—over the course of the last two to three years in particular, an increasing number of people whose daily drive is entirely electric powered. We have seen a dynamic shift in the sources of power that drive our vehicles, particularly in the metropolitan area.

I note the member for Hammond's observation that diesel power has been at the core of what drives our regional and country areas for a very long time indeed. For the purposes of this debate I make the observation that, for reasons associated with perhaps the distribution of diesel as distinct from petrol, price variation of diesel at our retail service stations does not appear to be occurring to anything like the extent that we see on the petrol side.

So we are certainly now used to an environment in which there is a high level of price fluctuation that is certainly apparent. Price can change quite dramatically from one day to the next but, also, that is not consistently applied across different fuel types. Also, the diversity of fuel types that are driving South Australians and those around the country as well—daily drives—has really been changing rapidly with the times.

I make those observations because the drivers for those changes are partly a response to technology and they are partly a response to the importance of dealing with the climate effects of using fossil fuels, but they are also partly a response to market forces. Where people do not like the high cost of fuel, they will drive increasingly efficient vehicles, so as to have to buy less fuel, and where other technologies become available that obviate the need to buy those types of fuel or indeed to change the whole driven platform altogether, then they will do that. We have seen this occurring really quite rapidly.

Those who observe the motoring industry globally will have seen news in recent weeks. I think it might have been around late January this year when we saw that Tesla has gone from a market capitalisation somewhere among the relative minnows to, all of a sudden, having a market capitalisation that rivals the behemoths in the motor industry. Tesla, of course, is famously the producer of entirely electric-driven vehicles. So the landscape and the diversity of fuel sourcing and so on is changing, and changing rapidly.

In the context of this debate and in the context of the desirability to legislate in the interests of consumers for improved outcomes about price transparency, price predictability and so on, that is a very important part of the context. A lot of work has been done on this topic. As I said earlier, it is not entirely a South Australian or indeed an especially South Australian issue. It is an issue that has been given consideration in a pretty thorough way in Queensland, we are told, and it is also a matter that has been experienced in subtly different ways in each state, I would hasten to add, and in Western Australia as well.

The government, in being alive to this issue and diligent in terms of its work in stepping through the evidence that might underpin any legislative measures in this area, has looked very closely at a trial that has been underway in Queensland and is monitoring that trial very closely. Action in this state, I would expect, therefore, would be valuably guided by pricing information that comes to us from Queensland following that trial. We are told that data from the trial that Queensland is undertaking is not yet publicly available. No doubt, we will have information about its benefits and any downside aspects of it when and if that information is made available. That is going to be relevant information from both consumers and motoring bodies, as well as those who are administering the trial. I have indicated it is a national issue, and there have been proposals that have emerged. I seek leave to continue my remarks.

Leave granted; debate adjourned.

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