Senator JOYCE (Queensland) (4.06 p.m.)—We have heard today the debate with respect to regulations that get rid of the Petroleum Retail Marketing Sites Act 1980 and the Petroleum Retail Marketing Franchise Act 1980. A couple of clear issues have been illustrated throughout the debate. What has happened with these regulations is that the intent of a piece of legislation that has not yet been debated is about to be put into place. This Senate has not had the chance to debate the issue that there has been a regulatory change that has brought about the intent of a piece of legislation that we have not yet had a chance to see.

Going back to the issue, everyone acknowledges that the current oil code is flawed. There is no argument that the current oil code is flawed. The problem with the current oil code has been brought about by Coles and Woolworths circumventing the intent of the 1980 act. However, there is nothing in this regulation or the proposed legislation that deals with the fact that Coles and Woolworths have circumvented the intent of the act. We have basically found the people who have broken the intent of the act and let them off the hook. We have done nothing to actually address the problem. Instead, in some obscure piece of logic, rather than addressing the problem we are going to affect an innocent third party in this: the independent branded and franchisees, the mum-and-dad operators. They are going to have to suffer the slings and arrows of the fact that Coles and Woolworths have circumvented the intent of the act.

The intent of 1980, when the coalition government initially brought in this piece of legislation, is still as good now as it was then. The world has not changed that much in 26 years. The government’s intent then was to keep wider participation in the retail market to prevent vertical integration. And now we are about to bring in a piece of legislation that is going to bring a narrower participation in the retail market and create vertical integration. I do not see the logic of how we have managed to do that complete 180-degree turn on what has always been a strong small business intent.

A lot of people have had to deal with the bluff of the major oil companies. We have had the major oil companies saying, ‘If this doesn’t go through, we’re going to pull out of Australia; the world will collapse.’ I think that is a load of rubbish. They have been doing very well for themselves and they will continue to do very well for themselves—and we want them to do very well for themselves. But it is a sign of the sorts of tactics they use, the standover tactics: ‘You’—that is, the parliament of Australia—‘will do this or else.’ I take with a grain of salt the predictions by one oil company in particular, who said to my office that they had an intention, if this did not go through, to leave Australia. How ridiculous is that?

I also acknowledge that in the National Party we have a clear intention to try to get ethanol out into the market. Everyone clearly states that, if this goes through in its current form, it is going to be an inhibitor to getting ethanol out into the market. Getting a biorenewable fuel alternative out into the market that basically makes Australia a benefactor of the biorenewable fuel industry rather than a casualty of it will be affected by the fact that the independents are not in the market. They will be under undue pressure because of this, because all of a sudden you are going to have the supplier of the independents’ product also being a competitor in the retail market. We have some obscure belief that somehow their major competitor is going to look after them. Of course they are not. As soon as they prove themselves a viable threat, they are going to put them out of business. Since the Boral case and the running down of the predatory pricing laws, they have every ability to do that. That is another issue that connected to this.

I agree with Senator Bartlett and Senator Stephens that we should be dealing with section 46 of the Trade Practices Act. That is a big issue and it needs to be brought forward. It is a protection for small business. There is a government approved form of section 46. It has been there since 2004. It is just languishing; it is just sitting there. That piece of legislation should be enacted. It should be brought forward. I do not think even the oil companies would have a problem with that. If it were brought forward, we would have a mitigating circumstance that would allow a more relevant roll-out of this piece of legislation.

But this regulation is all one way. The way it goes, it is all in the favour of the incumbent oligopoly of the four major oil companies and Coles and Woolworths. Cole and Woolworths are, by default, Caltex and Shell. Sometimes they pose; Caltex and Shell will say, ‘We can’t do anything about Coles and Woolworths.’ Of course not! They are moving so much product through them that they do not want to do anything about them. They have managed to get about 52 per cent of the retail market in fuel, which links up with their control of the retail market in a whole range of other fields. Of course they are quite happy to move that product.

Then they put their hand on their heart and say, ‘We will deal with ethanol when it has a competitive advantage.’ The fact that ethanol is at about 80c at the terminal gate price and fuel is at about $1.40 does not seem to strike a chord. Of course there is an absolute competitive advantage of about 60c a litre to get ethanol out into the market, but they do not want to do it, because it does not fit their corporate plan. It does not fit their plan to roll out an alternative product to the product they are selling and they control from the oilwell to the bowser.

One of the main mechanisms that we have to do it in this nation is the independents. A clear example of that is here in Canberra. Four sites sell ethanol. Three of them are independent. And what are we going to do? We are going to pass a piece of legislation that those three independents say will work directly against their future in the market. We are passing a piece of legislation that does not promote ethanol; it inhibits it. You cannot say you want to promote a product if you are trying to get it off the market by taking away your mechanism of retailing it. That is another issue. The major oil companies’ move to not be proactive in pushing for the government’s policy of getting a biorenewable fuel industry off the ground will be enhanced because of the continued enactment of this regulatory instrument.

We have heard a lot today that there will be a strengthening of the lease agreements for these new franchisees and branded operators. But of course that avoids the crucial issue: that is only if the oil company chooses to renew them. It is like me saying to you: ‘I’m going to offer you a great deal on the lease of your house, if I choose to lease it to you. But, when there is a commercial advantage of me not leasing it to you, I’m not going to do it.’ The oil companies are not going to be renewing leases if they can make a greater margin out of operating it themselves. But, in these three by three by three year leases which have been talked about today, at the completion of that term, they have two choices: to take over the site and operate it themselves or to lease it on to someone else under these new leasing arrangements.

That is the choice, and they can choose not to renew it. They can choose just to say: ‘We’ve thought about it. We don’t have to pay you anything for it. You’re out of there and we’re in there tomorrow.’ There is no protection against that. There is no mitigating measure against that. The protection in the past was exactly this regulatory