Labor Senators’ Minority Report

Labor in general supports the Bill. We regard the problem of fuel substitution as an issue of the utmost importance and are concerned at the Government’s handling of the matter. Specifically we wish the following to be noted.

With regard to testing fuel to see if it meets a wider general standard, the evidence received by the Committee indicates that there is some uncertainty in respect of where the legislative authority may lie, as indicated in the following exchange:

Senator Murray: I want to clarify that it is the states that do have the legislative backing to test the fuel. Is that correct?

Mr Colmer: I think that is a contested issue. As you heard earlier today, the Victorian Department of Fair Trading believe that they do not have sufficient legislative power. I think that there is some disagreement about that. I think the problem with consumer affairs is that that is one of those split responsibilities.[32] 

Regardless of legislative obstacles, as noted in previous paragraphs, the technical obstacles to testing against a possible national fuel standard are very considerable. This issue is also outside the scope of this Bill, which is confined to the Commonwealth's testing for the presence of the marker in fuel.

Despite these difficulties, the idea of a national standard for fuel received wide support by witnesses (AAA, RACV and Liberty Oil) and it would therefore be worth developing such a standard.

With the exception of AIP, all those who provided submissions and/or testified before the Committee regarded the current Bill as assisting in stamping out fuel substitution. It was evident that fuel substitution was a widespread problem and attempting to solve it raised complex issues of fuel standards and the division of Commonwealth/State responsibilities. No-one expected the current Bill to solve all those problems but most regarded it as certainly a step in the right direction.

The CBAV has along with New South Wales and Queensland advocated a 10 point plan to deal with fuel issues. In particular point 3 of that plan dealt with fuel substitution.  It called on the Commonwealth to:

  1. report to the [Ministerial Council on Consumer Affairs] MCCA on whether the proposed Commonwealth fuel standards will be adequate to take action under Trade Practices Legislation, in order to protect consumers from contaminated fuels;
  2. ensure an adequate level of testing by the ATO (formerly Customs) is conducted to minimise excise abuse.[33]

It was unclear why the Ministerial Council did not accept such a proposal.

Liberty Oil[34] and the RACV[35] believed that the above recommendation would be useful in the campaign against fuel substitution.

The CBAV also testified that cross border issues meant that no one State could be solely responsible for fuel quality within its own borders.  In other words there needed to be a Federally based solution to this problem:

Added to that problem is the issue that the retailer may well be supplied with petrol form interstate and, therefore, it is not open to us to go and test the fuel at the source from which he is receiving.[36]

 

SENATOR CAMPBELL SENATOR CONROY SENATOR MURPHY

 

 

Australian Democrats’ Minority Report

Petroleum Excise Amendment (Measures to Address Evasion) Bill 2000

Senator Andrew Murray
Australian Democrats

Consideration of Legislation Petroleum Excise Amendment (Measures to Address Evasion) Bill 2000

The AIP in their representation made it very clear that there is a need for a legislated fuel standard.  The Australian Democrats believe that it is possible to legislate a fuel standard and we recommend further consultation by interested parties on this issue.

The Australian Tax office has failed to supply the committee with sufficient evidence relating to the number of vehicles that are currently available from those that were given to the ATO in the handover of responsibility from Customs, to police the petroleum industry. 

It is understood that the ATO are presently not fulfilling the role of having a physical presence in the Industry and are taking a more hands off approach, which is therefore doing insufficient to inhibit these rackets.  Considering the level of revenue that the ATO gains from fuel excise, the act of ensuring compliance needs to be taken more seriously.  In our view this obviously means ensuring that the ATO can conduct an adequate level of testing.

To improve compliance, fuel standards that are legislated are needed.  Currently it is difficult or virtually impossible for the State Fair Trading bodies to make a case on fuel substitution because the current fuel standard is too broad and has no legislative legs.  The Australian Democrats have the belief that substitution rackets will not stop unless those involved are left with less space to move.

Simply placing markers in the fuel and lifting excise on all products does insufficient to stop the current substitution rackets.

 

Senator Andrew Murray

 

 

Appendices:

Appendix 1: List of Submissions

  1. Australian Paint Manufacturers’ Federation Inc.
  2. Liberty Oil
  3. Australian Automobile Association
  4. Australian Institute of Petroleum

In addition to the above submissions, the Office of Consumer and Business Affairs (Victoria) presented a paper to the Committee at the public hearing.

 

Appendix 2: List of Witnesses Appearing Before the Committee

Friday, 4 August 2000, Melbourne

Australian Automobile Association
Mr David Lang, Technical Director

Australian Taxation Office
Mr Patrick Colmer, Assistant Commissioner Excise
Mr John Charleston, National Director Petroleum Excise
Mr Trevor Walker, Assistant National Director Investigation, Excise

Liberty Oil
Mr Mark Kevin, Chief Executive
Mr Adam Jacobs, Wholesale Manager

Office of Consumer and Business Affairs (part of the Department of Justice, Victoria)
Ms Bernadette Steele, Director, Consumer and Business Affairs
Ms Lois Goodes, Manager Policy Branch

Royal Automobile Club of Victoria
Mr David Cumming, Manager Government and Corporate Relations

Trade Measurement Victoria
Mr Paul Russell, Quality Assurance Manager

Appendix 3: Gasoline Sample

Sample No: 1
Sample Name: Gasoline sample A2 17/5/00

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