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House of Assembly - Fifty-Fourth Parliament, Second Session (54-2)
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Fair Trading (Fuel Pricing Information) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 13 May 2020.)

Mr ELLIS (Narungga) (16:57): I am pleased—in fact, thrilled—to rise today in support of the Fair Trading (Fuel Pricing Information) Amendment Bill 2020, in particular as a country MP who is, as are all country people, well used to having to pay higher fuel prices in comparison with those that are found in the city. As well as that, we are seeing inexplicable price discrepancies between petrol stations located within townships and between townships and at prices that do not seem to be about transport costs or fluctuating oil prices.

Port Augusta can be cheaper than Kadina, Whyalla cheaper than Pirie and Port Wakefield dearer than Wallaroo, and prices at different petrol stations in the same town can vary widely. That is apparent to all of us who drive through Port Wakefield on our way to town for these wonderful sitting weeks that we enjoy so much. All three of the petrol stations along the main street can have different prices mere metres apart.

The reasoning behind such differences has long sparked kitchen-table and front-bar discussion. It is hoped that the Fuel Check scheme proposed in the bill before us will help to demystify overall price cycle behaviour and that the result will be that less money from household budgets will have to go into filling up the family car. The price of fuel really matters to households and businesses. It impacts budgets, profits and losses, particularly for regional transport operators and regional businesses that have no choice but to fill up in order to get their goods and services delivered.

The bill before us is a very welcome one indeed. Every $1, $20 or $50 a tank will bring welcome relief for many regional consumers who have for too long been charged exorbitant prices for petrol because they lack a competitive market. Now regional customers will have access to real-time data that will enable them to shop around instead of being stuck paying high prices compared with motorists in our city areas.

People are incensed at the regular yo-yoing of pricing— $1.34 in some places, $1.72 in others—and that Adelaide motorists can enjoy 20-year lows recently while regional people remain paying almost 50¢ a litre more at times. I understand that this happens because country retailers do not fill up their tanks as often as city stations, and many set their prices on a weekly basis. Country operators have to retain prices in line with the price of fuel at the time at which the tanks are filled up in order to make a profit.

Country retailers are different from city petrol stations that change their prices more frequently. When a small town retailer orders a load of fuel, they have a price they are going to charge based off profit margins and it stays the same until the next load. But even in country towns where there are multinational branded stations near independents, one minute the independent can be 10¢ more expensive and the next they can be 10¢ cheaper.

The Fuel Check model is the chosen model the bill before us facilitates, and feedback to my office indicates that this model and the intent of this bill is very welcome. This model requires petrol stations to report any price changes to a centralised database, and it is the universal view that it will help motorists make informed choices and find the cheapest prices at any given time.

Every petrol station will need to report to the state government when they change the price of fuel, and this data is then made available to app providers, providing the opportunity for us to choose a local petrol station with the best price within 30 minutes of any price change, and then the data is then fed into the system and made available to all app users.

It will be great to just get in the car, turn on your chosen app because you will know you have the timely and accurate data you need on your screen ready to look and see which is the closest and cheapest petrol for you, whether you are in the city or the country. For us in Narungga, we will be able to see what one town over is offering and work out whether a drive to that station is worth providing a cost saving or, if we are planning a trip to Adelaide, where the best spot on the route is to fill up.

Constituents do not question the need for such a scheme and have mainly shown interest in how the scheme will work and its practical implementation—that a third-party data aggregator will collect the fuel price information from fuel retailers for private app developers to use free of charge. If that retailer is found not to comply, they will be fined, regulated by Business and Consumer Services. They are also interested in enforcement and how retailers will be fined should they be found not to comply.

Associated amendments to the Fair Trading Act create a series of offences punishable by a maximum fine of $10,000 to enforce compliance with the scheme by fuel retailers. Regional retailers advise they prefer the model chosen over others because it requires reporting only when price changes rather than every, single day, which means that compliance will be less of an impost on smaller businesses, which is a good thing.

It is predicted that the improved transparency that comes with real-time price monitoring will lead to improved competition, which will put downward pressure on prices, helping to alleviate cost-of-living pressures. Fuel is an essential item for people living in country areas where there are no taxis and no public bus or train transport, thus this issue is a vital one for regional people. We often see price differences from town to town, a cent or two difference per litre in the main but sometimes more, and I believe that the price check scheme will result in cost savings for constituents in my electorate.

Country people well understand that retailers need to maximise profits, and they are also well used to and expect to pay more for products and services that have to incur the transport and delivery costs from metropolitan areas, but it has always been frustrating to see fuel prices leap at peak demand times—in school holidays, public holidays, at Christmas, Easter and harvest time—so it is hoped that the bill before us will help increase market competition and put more control back into the consumer during such peak times.

In the past 12 months, fuel prices in South Australia have surged by up to $30 a tank, according to the RAA, with prices regularly staying high for five rather than two or three days compared to interstate counterparts. According to the ACCC, daily average retail prices for petrol in Adelaide are above the estimated average costs up to two-thirds of the time. The fuel check scheme proposed will certainly offer choice for consumers, and the increased transparency of fuel prices will enable us all to take advantage of the cheapest prices out there at any given time.

It was important to get the bill right, and for this reason the Marshall Liberal government requested that the South Australian Productivity Commission investigate and report on potential models that will provide the best net benefit for consumers, to recommend a model that will be taken up by consumers, acted on by consumers and provide benefits that exceed the costs of regulation to retailers and government.

The commission was charged with looking at the effectiveness of real-time pricing schemes interstate, including in New South Wales, Queensland, the Northern Territory and Western Australia, and to find the most cost-effective solution to increase transparency in fuel prices in this state, which is characterised by a small number of retailers that collectively account for the bulk of retail outlets. Currently, retailers display their current prices at their site and, whilst there are already commercially driven smart phone apps that provide fuel prices by location and which work well, they are incomplete in coverage and some data is out of date. The commission report states:

The RAA commented that some apps are more comprehensive and timelier than others, and not all of them include prices for the lowest priced retail sites.

It further states:

The RAA assessment is that around 70 per cent of fuel retailers information is available on the commercial apps in SA.

So now our aim, as part of this initiative, is to gather accurately the data from the other 30 per cent. The RAA has called for real-time fuel price monitoring for many years. In its submission to the commission inquiry, it cited a study by the Australian Competition and Consumer Commission showing massive savings to motorists by increased competition. The RAA argues that direct access to browser prices at nearby stations will increase competition and, further, that access to real-time information on mobile phones is essential for Adelaide motorists because of the extremes of the fluctuating price cycle.

The bill today ensures that the lost 30 per cent of information can now be captured and used to inform South Australians for the bottom line result that consumers are better off and that markets will work better when consumers are well informed. We all stand to save money on our fuel costs because of the bill today. Of note is the ACCC estimate that the potential savings to Adelaide motorists of price transparency could be up to $75 million a year or up to $300 annually.

Submissions to the South Australian Productivity Commission inquiry during the consultation period thoroughly examined different scheme options, whether consumers should provide the information or the retailers, and it had a forensic look at price cycles in this state and at the benefits of existing models in this country and overseas. Whilst it was found that retail price cycles may still persist over time, even with price transparency schemes, any scheme offered to consumers is better than none at all. Key issues addressed by the commission and raised by stakeholders included:

any likely impact of interventions on the information available, the amount of information available;

price impacts following the transparency schemes;

competition among retailers;

benefits to motorists; and

potential regulatory burden on retailers.

I am reassured that the research preceding the introduction of the bill was thorough and, whilst the Productivity Commission was not charged with making formal recommendation, its analysis of the various policy models greatly assisted the government in forming the legislation that is before us today.

I applaud the work of the commission, and the Attorney-General and her office, for the extensive work undertaken to get the best available scheme possible here in South Australia. An especially positive decision by the Marshall Liberal government in relation to this matter is to undertake a two-year trial to ensure that the stated benefits are met. On a reassuring note, this government has reiterated that no policy of fuel price monitoring will have its support if it is found to have increased fuel prices.

Another question put to me by constituents is: why is the government spending money on this when there are other apps that appear to be working well? The answer is that in our view they are not working as well as they could.

Currently, retailers are not compelled to provide contemporaneous fuel pricing and coverage from the current apps is lacking. The government is legislating that retailers provide the price of their product within 30 minutes of a change and will then provide that information to apps like those already available for more accurate fuel price watching.

The difference on offer to non-regulated data gathering is that the scheme proposed will be regulated by Consumer and Business Services to ensure that retailers are complying. It is mandatory data entering, with fuel retailers who do not comply facing a maximum penalty of $10,000 for offences such as not being registered in accordance with requirements, refusing or failing to comply with requirements or providing false or misleading information.

It is also reiterated that what is proposed is not a government app, but it is a government collecting the reliable and accurate information and passing it on to consumers, who can then determine which app they use the information on. They are free to choose what they prefer to do with the data based on additional services, discounts or whatever else that may be offered by app developers.

I concede the benefits at the bowser for city motorists will be greater just by the fact that city folk have far more choice on where they fill up close to home than people who live in regional areas. Reports show that there will be benefits, and everything helps. The trial will show what savings there will be for regional motorists, and I will be watching with great interest, as there have been mixed results in other states.

At the height of the Christmas break last year, motorists were angry to see again that the price peak came just as motorists were due to fill up for the next break. An RAA poll of more than 500 motorists found that nearly two-thirds would use online real-time prices to source petrol and that one in five would use such an app that is proposed. I hope more people use the price monitoring, as there is ample evidence that prices will be driven down when motorists have informed freedom of choice to shop around with real-time pricing.

In Queensland, the equivalent of the RAA revealed in December last year that the average monthly price of unleaded petrol was around 2.3¢ a litre cheaper in Brisbane since the introduction of their 12-month trial of a real-time price scheme. There is exciting potential for savings and accountability by retailers driven by consumer demand more often than plain profit. I am confident we have the best possible advice from the Productivity Commission on this, and now, as a result, we are getting on the job to trial the scheme and ultimately relieve more cost-of-living pressures for South Australian consumers.

Whilst the state government cannot control fuel prices, what we can do is give motorists access to accurate and timely pricing information to allow consumers to find the best possible price. That is what the bill before us facilitates, and I commend it to the house.

Ms BEDFORD (Florey) (17:12): I indicate I am the lead speaker for the crossbench and that we are in furious agreement with you except that the actual model you have chosen is not the correct model. This legislation has indeed been a long time coming but does not deliver the fuel watch pricing system the South Australian public deserves. In February this year, in an attempt to deliver reform and bring on debate, I introduced the Fuel Watch Bill on behalf of and with the support of my crossbench colleagues. At the time, I indicated I would be happy for the government to take carriage of the bill, and I renew that offer today.

To provide some context, it was February 2018 when both the Liberal and Labor parties gave election commitments as part of their campaigns. The RAA had been campaigning for the principle of fuel price monitoring for years, although their calls were not heeded by either major party until just before the last election. The RAA seems to be the only consumer body to make a submission to the Productivity Commission; alas, I contend, not solely with the consumers in mind.

Without knowing if any of the confidential submissions to the commission were pro-consumer, I can only assume the submission made by my office was the only one to put consumer considerations first. I thank my staff for their committed efforts on behalf of the South Australian public. Here we are now in June 2020 still waiting for action. It was only in December 2019 when the government referred this issue to the Productivity Commission for inquiry. A report was subsequently forwarded to the government on 18 March 2020. The report was publicly released the same day as their bill was tabled, which was 13 May.

The government's own legislation—this bill—has come to parliament a further two months after receipt of the Productivity Commission report. In summary, it is almost now 2½ years since the government made its promise to South Australian consumers, now well weary of price fluctuations and the constant chase for the cheapest fuel prices in the retail petrol market.

Motorists have lost substantial amounts of money and time in the interim. It is not uncommon to see motorists queueing across roadways to take the opportunity to buy cheap fuel when they see it.

I note the government's proposal, enabled by the bill before us today, is for a two-year trial of so-called 'real-time price monitoring'. I say to the government: a two-year trial would have been a reasonable approach two years ago. Now, however, for South Australian motorists, it seems like a status quo position with little interest in the day-to-day struggles consumer-led reform would relieve. While it is disappointing it has taken so long to reach debate in this chamber, particularly given I and my colleagues on the crossbench put a fully researched proposal for legislation on the table over four months ago, I welcome the debate has at last arrived.

When the Premier referred the issue of fuel pricing to the Productivity Commission for inquiry on 18 December last year, I and many others were pleased. It was a positive movement which indicated the government remained committed to fulfil the promise it made to voters at the 2018 election. Until recently, it did seem the government was reluctant to act and, like many, I am bemused why this could be, so referring this matter to the Productivity Commission for inquiries seemed like a move forward and a way to revive the issue.

With the benefit of that inquiry, I have a better understanding of the delay. It appears the only thing we are trying to achieve with this bill is better governance of the daily price changes, however numerous, occurring within the petrol retailing system.

No other commodity relied on in such a fashion by the public fluctuates in this way, changing its price so often within a 24-hour period. No-one can organise a household budget with this sort of variance nor do they have the time to chase fuel discounts through the suburbs in the hope the price will be the same when they eventually get to the outlet.

It is clear, when reviewing submissions made by industry and paid industry lobbyists to the Productivity Commission, major retailers were amply represented and prepared. It reminded me of the Australian cinema classic The Castle and a recent attempt by local residents to oppose the establishment of a fast-food chain outlet in a less than ideal location—ordinary people do not really have a chance. It seems everyone except consumers is intent upon doing all possible to maintain the current business model which relies upon extracting maximum profits by keeping consumers at a disadvantage.

As a local MP, I represent communities on incomes where unpredictable cycles delivering unexpected high prices, be it for petrol or any other essential service or household commodity, can present real dilemmas and difficulties—often the difference between themselves and their family eating or not. When I moved the Fuel Watch Bill on 4 March this year, with the support of the crossbench, Australia was already facing a flat economy, a per capita recession and rising unemployment and underemployment.

Now, as we enter Australia's first recession in nearly three decades, a time when more Australians than ever before are reliant upon income support from governments via JobSeeker, JobKeeper or any other payment such as superannuation early withdrawal, the need for effective and transparent fuel price monitoring is even more apparent. Not all consumers are price conscious, but price conscious consumers all face the same issues when purchasing petrol: they need to know where to find the best deal.

When you consider price-sensitive consumers could save, as stated by the ACCC, around $300 a year, with other agencies suggesting it could be as much as $500 a year if they were able to buy fuel at the bottom of the fuel price cycle, the imperative for this parliament to deliver the very best fuel price monitoring scheme is obvious. Indeed, as the Productivity Commission states, and I quote:

The evidence from a variety of sources suggests that price is a key consideration for about half of motorists.

As has been noted in the other place, pre-COVID there was an unprecedented price spike in Adelaide petrol prices, with the RAA estimating rising fuel prices over the past 12 months were costing Adelaide motorists up to $30 extra to fill their tanks. Now, post-COVID, at a time when the global crude oil price has dropped to a 17-year low in response to the drop-off in demand as the COVID-19 pandemic hits economies around the world, retail prices remain stubbornly high.

What this means is wholesale prices are not always adequately reflected in retail prices, especially when you consider retail outlets source their petrol from the same location and their tanks are not refilled at the same rate we see prices change. Three things affect prices: competition, turnover and transport costs. That is why, during committee, I will seek to incorporate an amendment to address issues affecting regional prices put to the house by the members on the crossbench, particularly the member for Frome.

In April, CommSec found retail profit margins are at a record high of 22.73¢ a litre, close to double the average level seen over the past two years. Evidence of fuel market behaviour utterly stacked against consumers is something that would not have been tolerated by our former premier and progressive consumer advocate, Don Dunstan. A market dominated by a few majors inevitably leads to manipulation. It disadvantages smaller independents who are so often price leaders, and it disadvantages motorists, who are held hostage to unchecked, unchallenged and unwarranted prices.

To understand fuel prices, consumers now need to have the skills of a stockbroker as well as a source of accurate and timely price information and enough time to chase petrol discounts—an extraordinary expectation which stacks the deck squarely against fuel consumers, particularly the most price-sensitive consumers and those families often with two working parents and little time to spare.

I have become a committed watcher of fuel prices and I cannot believe some of the price behaviour and fluctuations I have witnessed recently. While heading home from the city, I routinely see service stations along my 30-minute drive with prices differing by as much as 40¢ a litre. Coincidentally, 30 minutes is the time that this bill will enshrine for price changes in regulations, if passed without amendment.

Adelaide motorists deserve better than a second-best system. The best that can be said is this bill will entrench the current market practices, albeit with a commitment to better information being available to consumers. Consumer time is valuable. Unless we have the time to take advantage of prices when they are cheap, so-called 'real-time' fuel price monitoring is a waste of time for us all.

This is a Clayton's bill; it is the fuel price bill you have when you do not really want anything to change. In simple terms, this bill will deliver a fuel price monitoring scheme where only one group benefits. The government will claim it is the obvious scheme when the Productivity Commission report is considered. That, of course, would be entirely true if the Productivity Commission was asked to make recommendations, but it was not—a point made abundantly clear in its report.

The commission considered two options, and importantly stated both options deliver benefits. Moreover, it makes the point the choice of which option to implement is a matter for government, and ultimately for parliament, which is the place charged with representing and safeguarding the rights and best interests of the people of this state.

Option 1 is based on the model applying in Queensland and in various guises in other jurisdictions. This model is referred to as Fuel Check in the report and requires fuel retailers to lodge information about retail fuel prices whenever they change their price. This can be as regular as 30 minutes, with the data aggregated and available on a portal and able to be used by motorists via an app.

Option 2 is based on the model applying in Western Australia. This model is referred to as Fuel Watch in the report and requires fuel retailers and wholesalers to lodge their price for fuel at 2pm each day, with that price guaranteed to be stable and unchanged for a 24-hour period from 6am to 6pm the following day.

To be fair to the Attorney-General, she has not sought to claim the report suggests that this is the government's preferred model, and to her credit, she is prepared to finally make the effort to progress this reform in line with the election commitment. It is not really clear why the government prefers the Fuel Check model over Fuel Watch, which is advocated for by myself and my colleagues on the crossbench.

Perhaps the question of cycles needs to be further explored. Are they a help or a hinderance, and for whom? A regular cycle is a help for price-sensitive consumers, but a widely swinging and volatile cycle disadvantages consumers and more importantly the independent retailers who provide the competition keeping majors in check. It is a bit like what we are seeing with supermarkets, which is ironic when you consider their involvement in petrol sales.

In analysing the available evidence, the commission concluded both options would deliver net benefits for consumers each year. The commission also stated that these benefits are likely to grow over time with increased use of fuel price information by consumers—so no real difference there. Mind you, I would say—and, indeed, the Western Australian authorities also say—this is a mistaken conclusion. The evidence I have seen suggests the consumer benefits from Fuel Watch will far exceed the Fuel Check model preferred by this bill.

Indeed, the commission's report does not explore in any depth which model will deliver the most benefits to consumers. It contains no detailed modelling and makes the point, on the available evidence—and I emphasise, on the available evidence—'unequivocal findings are difficult'. The commission has told me, in discussion following the release of the report, that the WA model is old and has not yet been reviewed, and in return for reliable information, the WA motoring public pays higher overall prices per annum.

The only real point of difference the report identifies is likely based upon information provided by retail chains, and that is readily rebuttable, but some of it has been provided in confidence leaving no room to have it challenged. The most contestable argument raised by the major chains is there is no evidence to support the effectiveness of Fuel Watch. The fact Fuel Watch has operated for nearly two decades in Western Australia and consistently delivers the lowest retail fuel prices in the price cycle for Perth motorists is ignored.

I can inform the house the suggestion the Fuel Check model delivers the same benefits as the Fuel Watch model is utterly rejected by the Western Australians. Rather, they contend and have provided proof the Fuel Watch model delivers far higher benefits for consumers. Indeed, in Western Australia, the Fuel Watch scheme is not only supported by consumers but also by industry, including peak groups such as the Motor Trade Association.

Despite this evidence, the major petrol chains here have pointed to a pilot scheme in Queensland with benefits remaining unclear and unproven. What we know about the Queensland scheme is, after two years in operation, it has hardly made a dent on prices in Brisbane which continues to have the highest average petrol prices and the highest prices at the peak of the price cycle of any capital city.

That should come as no surprise as the Fuel Check model only guarantees prices for half an hour. That does very little to remedy price manipulation which has become a routine feature of our metropolitan petrol markets.

But this model has also been delivered in New South Wales and the Northern Territory some claim. Well, yes, but in both jurisdictions consumer take-up has been pathetically low and there have been no discernible impacts on the worst of price manipulation behaviours routinely seen. Simply put, this is a model which has repeatedly failed. I echo the comments of my colleague the Hon. Frank Pangallo, who has given notice he will introduce the Fuel Watch Bill in consolidated form in another place. The current model this bill will enshrine does the same thing time and again in the vain hope it will one day work. This is not the smartest way to approach public policy.

With one in five Perth motorists buying at the lowest price in the price cycle, it is clear the Western Australian Fuel Watch scheme has long proven its value to price-sensitive consumers. But it is worth noting petrol is still sold every day in Perth, not just the one day, the cheap day, but every day. This is achieved while also giving fuel retailers a profit margin, something that has not been challenged by them in the years since the model was introduced there.

Despite the rhetoric of some of the submissions made to the Productivity Commission by vested interests and their lobbyists, the world has not fallen apart in Western Australia since Fuel Watch was introduced 19 years ago.

Why on earth would we want to pick up a model from the eastern seaboard with a proven track record of failure to deliver when we have a clear model from Western Australian consumers and industry used for years without a challenge. The evidence from Western Australia is clear: price-sensitive Perth consumers use Fuel Watch to time their purchases to avoid price jumps and to seek out the lowest-price station at a point in time. As the Productivity Commission states:

To get the benefit of lower prices, consumers need better information, better access to it and to act on it.

In simple terms, Fuel Watch makes it easier to find the cheapest price, and that is why 20 per cent or more of Perth motorists buy fuel on the cheapest day in the price cycle. Compare that to other jurisdictions where prices rose despite Fuel Check-style schemes being introduced. Indeed, in New South Wales, only one in eight motorists even access the government scheme.

For the above reasons, I will be moving amendments to this bill at the committee stage. My amendments to this government bill will have a simple aim: they will deliver the proven Fuel Watch model instead of the failed Fuel Check model. Members will note my amendments incorporate two additional features not included in the original bill. These are designed to improve its operation, and I will come to them in due course.

Importantly, these minor adjustments make the suggestion put by retailers of the burdensome cost of a Fuel Watch scheme to bed. These amendments are incorporated in the bill being introduced by the Hon. Frank Pangallo in another place and will ensure South Australian consumers get a fair go. I am also aware of amendments to be moved by my colleague the member for Frome intended to bolster the Fuel Watch scheme, with particular regard to the high retail fuel prices we have seen in regional South Australia in recent months. I indicate I will be supporting them.

It is time for this parliament to choose. As the Productivity Commission has stated, both the Fuel Watch model and the Fuel Check model will result in net benefits to South Australian consumers. The government has chosen to put model 1, Fuel Check, to the parliament.

At a time of economic crisis, in the face of a once-in-a-generation global pandemic, it is time for parliament to choose—to choose the scheme proven to deliver for the motoring public, not a deficient scheme favoured by eastern seaboard lobbyists and the big petrol chains, to choose a scheme which will protect country and city consumers alike and which will ensure local independent retailers are not forced out of the market by predatory price gouging and market manipulation, to choose the scheme which will best address escalating fuel prices and empower consumers in a sellers' market heavily skewed to major retailers.

I ask this house to choose to support my amendments so consumers have the opportunity to make an informed choice for themselves at a time when it suits them. Let's not let them down. I say to the government: if you support my amendments, I am sure you will know the South Australian motoring public appreciates you keeping your word and find they are very grateful you have put their needs first. With that, I look forward to the committee consideration.

The Hon. S.K. KNOLL (Schubert—Minister for Transport, Infrastructure and Local Government, Minister for Planning) (17:30): It is a great opportunity that I take today to speak on this bill, a bill that builds upon the Marshall Liberal government's very strong cost-of-living agenda in South Australia, an agenda that has seen us decrease water bills in South Australia, an agenda that has seen us start to reduce electricity prices in South Australia, an agenda that has seen us cap natural resource management levies, an agenda that has seen us reduce by $90 million emergency services levy bills in South Australia, and an agenda that has seen us reduce land tax and payroll tax for households, investors and businesses.

When it comes to state government-influenced taxes and charges, we have a very strong record of delivering cost-of-living improvements in South Australia. There are other improvements that are the subject of other bills before this house, which we will talk about at another time, that help to build upon that in the local government sector, but today we are talking about the Fair Trading (Fuel Pricing Information) Amendment Bill, a bill that is going to seek to create a better market and a more informed market for the purchasing of fuel in South Australia.

Fuel is a staple. It is a very significant portion of the household budget. Because of the way fuel pricing works, subject to the vagaries of the exchange rate and subject to the vagaries of the daily oil price, that cost goes up and down significantly, and that creates a burden on consumers. We also have in South Australia, as we see in other jurisdictions, a fuel price cycle that does not immediately make sense to consumers and a fuel price cycle that is evolving and changing, making it difficult for consumers to predict when is the best time to buy fuel.

When it comes to intervening in a market, which is what this bill seeks to do in a fashion, we need to be very careful. We cannot go in and essentially take what is a free market and attempt to manipulate it in a way that reduces competition and in a way that stifles the operation of that free market. On this side of the house, as people who believe in the free market as the best way to be able to reduce prices and deliver goods and services of a quality that people are prepared to pay for, we want that market to operate free from constraint by government.

But what we are seeking to do here is a very fundamental principle—that is, as any first year economics student is taught, that improving information makes a market work better. That fundamental principle is true right across markets of all types and persuasions. More information leads to better decision-making by all parties, which leads to a better outcome and the better operation of that market. That is what we are seeking to do here—not to manipulate the market but to provide better information to the market.

At the moment, what we know happens is that fuel companies look at each other and watch each other and watch pricing and essentially adjust their pricing in line with what competitors are doing. They already have and are using that information to make decisions about how much they should charge for fuel. But, given that fuel pricing information is currently only properly available at the petrol station, it is very difficult for a consumer to understand where the best price is.

In this modern age of technology, where in the palm of our hand we have so much information, information at our fingertips that we never thought possible, providing consistent and comprehensive information on fuel pricing across different petrol stations across Adelaide and South Australia is a good step forward. It is why we took to the election a policy around fuel pricing and it is why we have the bill that has been introduced and is the subject of this debate today.

There are reports all over the place that discuss fuel pricing. Providing fuel pricing information through an app is only one bit of information or one part of how this market operates. Yes, it is difficult to get a definitive answer on how much provision of this information is going to make a difference. There are studies from the ACCC and studies from Griffith University and others that do say there is a benefit. It is hard to quantify but, yes, there is a benefit. If the worst that happens from this is that consumers get better choice for themselves, then that is a win.

Even more than that, as the studies suggest, if the opportunity for consumers to purchase cheaper fuel helps to reduce their cost-of-living pressures, then that is a massive win and something this parliament should support. There has been some debate about what method of providing this information the government should look at, and we come back to the fundamental principle that we do not want to put in place a mechanism that tries to manipulate that market. What we want to do is provide a system that gives information to consumers and lets their natural market behaviour dictate what happens.

That is why choosing this scheme—which exists in New South Wales, exists in the Northern Territory and exists in Queensland—is the right way to go about it because we need to let these free markets operate and do what they do, rather than make those markets less free. Last year, we asked the Productivity Commission to look into this issue to make sure that we were doing good without doing harm. Its report says that there are benefits to introducing this scheme. Again, it is difficult to quantify but, at the end of the day, it provides consumers across South Australia, motorists across South Australia, with the choice to use that information.

How much that is taken up is in the hands of individuals, but at least now through this scheme we are creating a system where people can get accurate and comprehensive information about what fuel pricing is right across our city and right across regional South Australia.

We think that this is a really massive step forward, one that we know needs to pass this parliament to become law and one that I think all sides of the house should join with in seeking to move forward. It is one that we know builds on this government's very strong cost-of-living agenda and, again, is another plank in our efforts to help ease the squeeze on households' back pockets and put more money back into their back pockets so they can choose to spend it in other areas as they see fit.

It is a commonsense measure, one that, as I said, the majority of Australian jurisdictions have chosen to take up, one that this government supports and one that I look forward to seeing in practice in the near future. To conclude, I want to thank the RAA. They have been a champion of this issue for a long period of time. They have helped, conducted research and been a willing partner in the development of this. They are a fantastic organisation in South Australia. Certainly, as we see this bill progress through the parliament, we can know that their 700,000 members will be the chief beneficiaries of what we are seeking to do here today.

The Hon. A. KOUTSANTONIS (West Torrens) (17:38): I will be speaking on behalf of the opposition but not as the lead speaker because in I think an extraordinary new precedent set by the parliament—

Ms Bedford: We should have debated it, actually. The crossbench has just as much influence—

The Hon. A. KOUTSANTONIS: It certainly does, and hopefully more influence.

The DEPUTY SPEAKER: My understanding, member for West Torrens, is that it was agreed upon; is that correct?

The Hon. A. KOUTSANTONIS: It was, sir.

Ms Bedford: If there was one more of us, it would be a lot more exciting.

The Hon. A. KOUTSANTONIS: Yes, I am looking forward to the day. We will take it for a drive and see how it goes. I can just point out that the opposition will be supporting wholeheartedly the crossbench amendments to the bill. We believe they are a good outcome for the people of South Australia. We will be supporting the amendments moved by the member for Frome and the member for Florey. They are well thought out, well researched and well done, and we are supportive of what the crossbench are doing.

Members interjecting:

The Hon. A. KOUTSANTONIS: I have to say that I find that type of laughter unbecoming, members opposite, and I think that this is a very, very good measure. Let's get some history into context here, Mr Deputy Speaker, before you pull me up, because government members are interjecting at me and you would somehow assign blame to me for that.

The truth is that this was a bipartisan piece of policy. At the last election both political parties went to the election promising a form of real-time disclosure of petrol pricing, and you could say that we both had the same intent because, despite what the Minister for Transport and Infrastructure has said, claiming that there is a 'free market' in petrol pricing, there is not a free market.

There is widespread evidence of collusion. There is widespread evidence that consumers are paying more for petrol than it is a cost with a reasonable level of profit. Recent examples are pretty obvious. We had some markets in the United States showing a forward market with negative oil prices; that is, people were paying people to store their oil, to take their oil. That oil was being refined and petrol prices in the United States were not reflective of the cost of processing that oil into petrol.

The question we have to ask ourselves here as a nation is, I believe: why have we given up a lot of our sovereignty when it comes to energy, especially in fuel. We used to process a lot of our own fuel in this country and that is diminishing by the day, and it is an indictment on both governments, Labor and Liberal, that we have allowed that to continue.

We have let the economic boffins convince us that a world trade in processed, refined petrol will somehow work its magic and Australia can be independent. We are one of the largest energy producers in the world. South Australia produces the most barrels of oil on the mainland. The offshore oil, obviously, is eclipsed by Bass Strait and the North West Shelf, but in terms of mainland we produce more oil here than anywhere else in the federation. We import all our petrol, all of it.

The Hon. V.A. Chapman interjecting:

The Hon. A. KOUTSANTONIS: It is that type of unnecessary and unfortunate interjections that have taken me off my bipartisan—

The DEPUTY SPEAKER: Member for West Torrens, you were just hitting your stride and you should not be distracted at all by interjections.

The Hon. A. KOUTSANTONIS: I will take your advice and ignore the Deputy Premier, sir. You are absolutely right: if someone deserves to be ignored, it is the Deputy Premier.

The DEPUTY SPEAKER: I said, 'Don't be distracted,' member for West Torrens.

The Hon. A. KOUTSANTONIS: Sorry, sir. I thought you said, 'Ignore her'. Sorry, my mistake. I thought it was a party room meeting. Now, let's get back to the substance. Australia has basically outsourced its fuel sovereignty to the international markets, and South Australian consumers know that they are hostage to petrol pricing.

We are very lucky in this chamber. We get little fuel cards given to us by the Treasurer very generously through a SAFA program legislated here in the parliament, which means that we make a salary sacrifice contribution to get our fuel cards.

Out there in the real world, and for a lot of our partners and for those of us who are still in business in the parliament who are buying their petrol retail, they see what our constituents go through trying to balance whether or not to fill their car with fuel, or to buy groceries, or to buy food and the distance people travel and the anomalies that are in place, depending on which side of the road you are driving on at any one time, about what fuel price you should pay. Now, the genius in the crossbench amendments, the genius of them—

The Hon. D.C. van Holst Pellekaan: Whatever they are.

The Hon. A. KOUTSANTONIS: That's unfair and unfortunate.

The Hon. V.A. Chapman: What does ESCOSA say?

The Hon. A. KOUTSANTONIS: ESCOSA? Well, I'm going to get to the Productivity Commission report. That is much more interesting than what they have to say. The genius of the amendments moved by the member for Florey is about the risk retailers have to take in pricing 24 hours in advance. That puts immense pressure on retailers.

I have to say that I initially was not convinced. I initially thought that real-time pricing was a much better option than a 24-hour in advance, but the truth of real-time pricing compared with the option the member for Florey is proposing, is that it places all the risk on the retailers. If they get it wrong, if they make a mistake, they are in serious jeopardy, and the only way they can go is down to match others. There is genius in that, and the reason that there is genius in it is it does stop collusion up. If anything, it incentivises more downward pressure.

Let's face it: is there any South Australian who does not really believe that the major chains do not talk to each other and do not know what each other is charging? Do we not know that, really, petrol stations are just glorified supermarkets that happen to also sell fuel and that their business model really is not on the fuel and that the way they have structured themselves internally is all about each leg of the distribution and logistics chain charging each part of that business a certain fee and penalty to make sure that at the end it is more important that you sell the KitKat and the litre of milk than the 60 litres of fuel?

That is what we have come to here. It is not a free market. We do not have competitive forces in the fuel sector—we just do not. What we need is to smash this monopoly into a thousand pieces, smash it and smash it hard and place all the risk on the retailers. If they get their advance pricing wrong, no-one shops there, no-one goes there. They cannot sell the doughnuts, they cannot sell the KitKats, they cannot sell the bread, and they cannot sell the profit margins that they rely on to grow. Petrol becomes, again, the key focus of petrol stations. What that then does is make it a real competitive free market. That is the genius in what the member for Florey is offering us.

The government, in my opinion, have simply chosen a different option because they had not thought of it. That is the unfortunate thing about governments sometimes: rather than choosing the best option, just because it is someone else's idea they choose something else. The gift that the member for Florey is offering the people of South Australia is to say, 'Let this be a government bill,' and the opposition would carry the government on their shoulders, but of course we know that will not happen. Pride, the devil's favourite sin, will not allow the government to accept that they are wrong. The government will press on with a system that is substandard, that is not as good as what the crossbench have come up with; that is not as monopoly-breaking as what the crossbench have come up with.

I also point out the time—not that it is 12 minutes to 6pm but that it is nearly two years into a term and this was promised to be done immediately. Indeed, I remember holding press conferences about where this reform was. Let's look at what the government hid behind as this reform was delayed. There are real questions about why this reform was delayed. What are the interests behind the delay?

What are the powerful interests that are pushing for a certain model over another? These are interesting questions that I think need to be answered, but I suspect that we will never really know the powerful forces that move behind the Liberal Party, pulling the strings about what it is that should or should not be done.

The question about the history of all this is that, as I said earlier, at the last state election the then opposition, in their natural state of opposition stated—this is from the member from Gibson at the time—that the Liberal Party was looking at options for publishing petrol prices to put downward pressure on prices. He further stated:

South Australians are paying some of the highest household bills in the nation and need greater state government support.

He went on to say:

Easing cost of living pressures will be a major focus of the Marshall Liberal Government, if we are elected in March next year.

Regardless of the $500 million in increased fees and charges that have come past in the last budget, which I think is a broken promise, and the increases in land tax, the Attorney-General was quoted in the paper after the election, on 29 March 2018:

The state government is working through the legislative changes required to implement real-time fuel pricing...

On 29 March 2018, the Attorney-General said, 'We're on it, working at breakneck speed.' A year and a bit later, on 19 December 2019, the Premier was criticised on FIVEaa radio for backing away from the commitment and claiming there was, and I quote from the Premier:

…plenty of evidence around the world that by providing the data it can be used to game the market and actually increase the price for consumers.

So what happened between 29 March 2018 and December 2019? What happened in that period? What was going on internally in the Liberal Party? What powerful forces were stirring that wanted the government to change one of their key election promises? But, of course, with breaking promises comes pressure and, as we all know, the Attorney-General can stand up to anything but pressure.

Mr Basham: Really?

The Hon. A. KOUTSANTONIS: Yes. I don't know; how does she treat you? Well?

Mr Basham interjecting:

The Hon. A. KOUTSANTONIS: Good. The report was completed in March. The Productivity Commission was asked to do a report. So everyone was thinking the Productivity Commission was asked to do a report, that they were going to go away and work out a scheme. It is important to understand what the commission was not asked to develop. It was not asked to develop a business case or address detailed design matters, which would of course affect the cost of implementation. It was not asked for any recommendations. The Productivity Commission was told not to make recommendations. Why? Why establish a Productivity Commission, give it the task of fuel pricing, and then this from the commission, and I quote:

The Commission was asked to investigate potential models for improving transparency of fuel prices in SA and improving the information available to motorists when buying fuel. It was not asked to make recommendations.

Why not? We will go through this in committee stage, when we eventually get there. Why was the Productivity Commission, a body that we were told was going to depoliticise economic decisions like this, not asked to make recommendations? How much more could the Liberal government ask the Productivity Commission not to do when investigating this?

It seems to me that the fix was in to go slow—go slow—which is why the crossbench and the opposition have been agitating on this. Credit to the member for Florey for the work, research and effort she and her colleagues on the crossbench have put into this. They have been exemplary and they have put the government under a lot of pressure and I think, quite frankly, embarrassed them into action, which is exactly the role of the crossbench and the opposition. We do not have the numbers in here, unfortunately. We are working on it but we are not there yet.

Media reports from 13 May this year quote the Attorney-General as saying—and she is smiling, which is always a good sign—and I quote:

After considering this report, we have concluded to trial a real-time option, which would require petrol stations to report on any price changes to a centralised database.

She goes on to say:

While this may not reduce the overall cost of petrol, it will help motorists make informed choices and find the cheapest prices at any given time.

It gets worse. The article then goes on to say, and I quote:

The government aims to begin the two-year trial in spring.

A trial. Go back to before the election. We had the fierce urgency of now: families were suffering, petrol prices were too high, and 'We need a change of government. We need to make sure we do this.' Get in—a leisurely pace. Go slow. The Productivity Commission was asked not to make recommendations. The Attorney-General says on radio straight after being sworn in, 'We're working on this,' and not a year and half later the Premier says it might not actually work.

I am not a suspicious man. In fact, I like to side with the angels most times, but I suspect something is going on—something is rotten. We will not stand in the way of the government's legislation. We will be voting for the amendments wholeheartedly, forcefully. All of our people will be alongside the member for Florey, the member for Frome and the other crossbench members to get this legislation up. If we are unsuccessful, we will back the government's legislation. We do not want to stop this.

Ms Bedford: It's an improvement.

The Hon. A. KOUTSANTONIS: It is an improvement.

Ms Bedford: A teeny-weeny one.

The Hon. A. KOUTSANTONIS: Inches, life is about inches—moving forward always.

Ms Bedford: Size does matter, though.

The Hon. A. KOUTSANTONIS: I don't know about that. Like many South Australians, I want to see a fuel pricing scheme. I think it makes sense. I think it will sharpen the pencil of retailers. I would prefer to see them taking the risk. I would prefer to see the pressure on them 24 hours in advance. I would prefer to see them risking it all a day in advance.

Imagine the incentive for the plucky independents—the great South Australian miracle—the independent retailers, whether they are in groceries or in fuel. Think of the incentive for them to get a beat on the big retailers, the big owners, come in hard, low, 24 hours in advance and give them that advantage throughout the day. What would that do for building brands, building customer loyalty?

South Australians will travel for cheaper fuel. Regional members know this better than metropolitan members. They are the ones who are stuck with the tyranny of distance. They are the ones who see their constituents pay exorbitant amounts for petrol. That risk of getting it wrong, I think, is all we need to make sure that we get a real fuel price system that will work.

Given the government took two years to produce a two-page bill, this casual approach to whether it is abandoning GlobeLink, increasing prices after promising to decrease the cost of living, despite the promises of jobs that have not come, despite the promises of less freight on our roads and despite not having the jobs that we would expect from infrastructure spending, we will support this legislation. I was reading the official Liberal Party website, as I do when I am bored, and I found a member's profile that is still up. I found it very interesting. It says:

Fraser is a proud member of the Marshall Liberal Team and a strong advocate for the GlobeLink plan which will boost the economy and create jobs in construction, transport and exports whilst giving our exporters a competitive advantage to get quality Yorke Peninsula products to international markets.

I have to say that I drove to Whyalla the other day and, coming out of Port Wakefield, I did not see any bulldozers. I did not see any roadworks starting this massive overpass that was promised over 2½ years ago. I seek leave to continue my remarks.

The DEPUTY SPEAKER: Member for West Torrens, your time had expired because, remember, you were not the lead speaker; the member for Florey was the lead speaker.

Debate adjourned on motion of Mr Pederick.


At 17:59 the house adjourned until Thursday 18 June 2020 at 11:00.

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