FAIR TRADING (FUEL PRICING INFORMATION) AMENDMENT BILL 

TUESDAY 30 JUNE 2020 

Committee Stage –  In committee.  

(Continued from 18 June 2020.)   Clause 2.  

The CHAIR: My recollection is that we are still on clause 2. We have had three questions from the member for Florey and we have had three questions from the member for West Torrens.  

The Hon. A. Koutsantonis: Me?  

The CHAIR: Yes.  

The Hon. A. Koutsantonis: In committee?  

The CHAIR: In committee, yes. A week is a long time, member for West Torrens. How time flies. I think I am correct in that; yes, that is what the Clerk has. There is a question.  

Member for Frome. The Hon. G.G. BROCK: Can the Attorney-General comment on the press release released today by the RAA calling for the passage of a fuel monitoring scheme as a priority, noting that the Hon. Frank Pangallo MLC in the other place has introduced a bill reflecting my own private member’s bill, which is likely to come on for a vote tomorrow? 

 The Hon. V.A. CHAPMAN: I think the member is asking me to comment in relation to the RAA’s media release, not my own commentary. As to the reference, the quote is: 

 ‘RAA looks forward to Parliament passing the model recommended by the Productivity Commission to ensure motorists in SA can reap the benefits,’… Is that the reference? 

 Ms BEDFORD: Point of order: I do not understand that the Productivity Commission recommended anything. They gave you options. 

 The CHAIR: The Attorney is creating some context, I think, for the answer. 

The Hon. V.A. CHAPMAN: I have the media release from the RAA. I think the member is asking me about the section which reads—it is a quote, apparently, of Mr Borlace, who has a position of seniority with the RAA— 

Ms Bedford: He’s the spokesperson. 

The Hon. V.A. CHAPMAN: Whatever his role is, I do not want to diminish that. There is a quote here, and it says: ‘RAA looks forward to Parliament passing the model recommended by the Productivity Commission to ensure motorists in SA to ensure motorists in SA can reap the benefits,’… Is that the section that the member is asking me about? Could you just repeat the question? 

The Hon. G.G. BROCK: Can the Attorney-General comment on the press release issued today by the RAA calling for passage of a fuel monitoring scheme as a priority, noting that the Hon. Frank Pangallo in the other place introduced a bill reflecting his own member’s bill, which is likely to come to a vote tomorrow in the other house?  

The Hon. V.A. CHAPMAN: No, I cannot. I think the member will have to ask the RAA. I have read that as an indication of support by the RAA for the government to pass the model recommended by the Productivity Commission as per the bill.  

Ms Bedford interjecting: 

The Hon. V.A. CHAPMAN: I hear the member for Florey.  

Ms Bedford interjecting: 

 The CHAIR: What is the point of order, member for Florey? 

 Ms BEDFORD: He did not recommend anything, sir. They provided options to the government. If the Attorney keeps asserting they are a recommendation, it is misleading the house. 

The Hon. V.A. CHAPMAN: I have just simply read something the RAA are saying, sir. 

The CHAIR: Yes.  

The Hon. V.A. CHAPMAN: I do not want to upset the member for Florey.  

The CHAIR: The Attorney was asked by the member for Frome about the RAA press release.  

The Hon. V.A. CHAPMAN: Yes. I think to be clear, I cannot answer that. I can tell you how I have interpreted what the RAA has said, but if the member wants to have any further clarity, I think he will need to speak to the RAA, to Mr Borlace. I think what is causing some concern is the assertion that the Productivity Commission have recommended a particular model. I am not claiming that is what the Productivity Commission did. The Productivity Commission have identified what is available, and the bill that is before the parliament is consistent with that.  

What commentary is made by the RAA I cannot account for, but the Productivity Commission did make findings that option 1 met with the policy objective of such schemes to be accurate. I cannot make any further comment other than that. To perhaps get into an argument about whether or not itis a recommendation or whether it is consistent may upset the member for Florey. I think it is a matter that the member for Frome would need to take up with the RAA if he is in some way offended by that. 

The Hon. S.C. MULLIGHAN: My question again relates to the RAA’s release, which came out today. To refresh members’ memories, the RAA called today for the urgent introduction of realtime fuel pricing to help drivers avoid being hit by price spikes, which can add an extra $20 to the cost of filling the tank of a typical family sedan. If you consider that this might happen on a weekly basis, that would equate to about $1,000 a year or, given the delay in the government bringing forward a scheme to the parliament, about $2,000 since the last election. 

 With that in mind, as a former premier used to say, with the ‘goad to action’ from the RAA for fuel pricing, will the Attorney accept whichever model seems to attract the greatest support from the parliament, notwithstanding it may not be what the Productivity Commission lavished with one additional tick over the other model concluded in its recommendations? 

 The Hon. V.A. CHAPMAN: It is the government’s intention to progress the bill with the model in relation to real-time fuel pricing for all the reasons we have canvassed in this debate. I appreciate that there is a view of the opposition that supports the proposal of the member for Florey, if I can respectfully describe it as a ‘price freeze Western Australian model’, as a better position. That is not the government’s position and I think we have made that very clear. Ultimately, it will be a matter for the parliament to make a decision.  

The Hon. S.C. MULLIGHAN: When we were last engaged in debate on this bill, the Attorney suggested that experience in Queensland may suggest that that model, which ostensibly is the model that she proffers in her bill, might actually lead to price spikes rather than decreases. With that in mind, can the Attorney-General indicate whether she would be willing to contemplate supporting the amended scheme as proposed by the member for Florey?  

The Hon. V.A. CHAPMAN: For the reasons we have outlined in answer to the question, no. The potential price spike on the Queensland model, which was under consideration at the time, has potential. I think the Productivity Commission has made it very clear that it may well be that the implementation of such a model that is presented does not have the effect of lowering prices. What it does achieve, though—and I think this is the commendable aspect of it—is that it gives the consumer the tools by which they can make a choice about the purchase of this very important, essential ingredient in the family budget. That is the purpose of it, and we think it meets that test.  

The Hon. S.C. MULLIGHAN: To summarise the deputy’s latest contribution on this matter, the purpose of her bill then is not so much to lower the price of fuel through increased competition but to provide consumers with a greater choice in paying a higher price for fuel; is that correct?  

The Hon. V.A. CHAPMAN: No, that is not correct, and I think that is a misrepresentation of the position. What is indicated and confirmed, I suggest, by the Productivity Commission, is that there is still a question about whether the pricing model that is being presented will have the effect of lowering the price. Really, the verdict is out on that. The Productivity Commissioner raised that as an aspect that may or may not be achieved. 

 The effect of this model is that it gives the consumer the opportunity to have all the information mandatorily required to be made available in application form for them to then make a decision about when and where they purchase fuel, presumably, if they are price driven, by the lowest price in a region that is proximate—in other words, that they are not going to have to travel further than the benefit that can be obtained for the price on the bowser. I hope that makes it clear. It arms them with all the information in real time for them to be able to choose where and when they buy that fuel, to maximise the opportunity for them to buy at the cheapest price, not the highest price.  

The CHAIR: Member for West Torrens, you have already had three questions on clause 2. 

 The Hon. A. KOUTSANTONIS: My apologies, I thought we were on clause 3. 

 The CHAIR: No, clause 2 still.  

Member for Frome. The Hon. G.G. BROCK: From my information all industry participants reject the need for a fuel pricing scheme of any kind. Many argue that the existing market is suitable and it is okay. For example, on page 6 of the submission Caltex argues that it does not believe that there is a lack of price transparency in the South Australian retail fuel market. In your opinion, does this mean that the fuel retailers do not get it at this stage?  

The Hon. V.A. CHAPMAN: I would not necessarily say that. I think they are presenting an argument to suggest that it is not necessary. We say it is. We think the public and the consumer in particular need to be armed with all the information. As the member knows, there are a number of products already out there which do provide a service but it is not with all the information available. If everyone is required to provide that information in real time then the consumer has all the information to be able to make that choice. If they only have some of the operators who already voluntarily provide that information, that helps but it is not the best it can be, and we think it should be.  

There is no question that the retailers, some of them at least, are going to say, ‘Well, what we’ve got is good enough.’ That may be their view, but we would not be here debating this bill if the government were not of the view that that really needs to be followed through. We recognise that we do not want to put an unreasonable burden on retailers in relation to these matters, but we consider that with the capacity to electronically manage this information, this data, it would not be specifically onerous to such an extent that it should not be advanced that they provide this information and that, when they change their prices, within 30 minutes they make the information available. 

 Some might provide it within seconds because in issuing the edict of a change, up or down, it seems to me that it is not beyond the wit or the capacity of this technology to forward that electronically to the reservoir for the purposes of the information that will populate the applications people use. We do not think that would be an onerous regime that is unreasonable; quite frankly, a number of them provide it already. On balance, we think it is necessary for the consumer.  

The Hon. G.G. BROCK: There has been a range of views put by industry, and some of these are more forthright than others. In particular, I note the submission of the Australasian Convenience and Petroleum Marketers Association, which stated, on page 2:  

It is neither the role of the ACCC Commissioner, nor any Australian politician, to single out the legal pricing behaviours of any single market participant. Does the Attorney-General I agree with these comments—that no politician should single out the pricing behaviours of market participants?  

The Hon. V.A. CHAPMAN: I am not sure I quite understand the question. Could you repeat the quote?  

The Hon. G.G. BROCK: The quote is: 

 It is neither the role of the ACCC Commissioner, nor any Australian politician, to single out the legal pricing behaviours of any single market participant. 

 I am asking if the Attorney agrees with the comment that no politician should single out the pricing behaviours of market participants.  

The Hon. V.A. CHAPMAN: Again, I am not sure what the context is. This quote is from where?  

The Hon. G.G. BROCK: From the Australasian Convenience and Petroleum Marketers Association. It is on page 2, that it is neither the role of the ACCC nor any politician to interfere with the retail prices. 

 The Hon. V.A. CHAPMAN: I am happy to have a look at the quote in the context that it is there. Introducing a bill such as this demonstrates that we do need to progress a means by which people can have the information available so that they can make a choice because we do have a situation where fuel is an essential and sometimes significant consumer cost. I would not be here proposing a bill on behalf of the government if we did not think it was needed.  

Fuel is too much of a critical expense to simply leave it to competitive interests. That is something we have accepted. As a government, we have tried to look at how that can best be managed and how that can be done most effectively. Although the member for Florey has her view about the Western Australian model, I point out that that model has operated for something like 20 years now and no other jurisdiction has picked it up.  

I suggest it is probably because of the fuel cycle Western Australia have, which is peculiar, but also because they attempted to deal with a very different issue. In Western Australia, they may also be interested in price as such, but it seems to me that they developed a model within the envelope of people being furious that they would find a different price on the way home from work from when they went to work.  

They introduced this 24-hour freeze model, and the disadvantage of that has been that the retailers cannot even drop their price in that time. It may provide certainty, a bit like the ACT model, but it does not give the flexibility for a consumer to be able to say, ‘I want to follow this market and I want to be able to have 30-minute information about this, up or down, so that I can make a choice.’ 

 We think that is the better option, to inform the consumer and make the retailers provide that information, as distinct from a price freeze model. That is the government’s view, and we think that that is meritorious to implement. I think, as I said to the member for Florey when she was raising her freeze model, that it is not to be disrespectful to that, it is to simply say that this is the one we think is the most beneficial. We are doing this for a two-year period and if it turns out that it has demonstrably failed, for whatever reason, then obviously we will have to have a look at it.  

If the technology that supports this type of either information or registration of information under a freeze model is found to be inefficient then we will have to look at something else, it seems to me. But the general principle of whether parliaments or governments should in some way regulate, or interfere with, the free-for-all out there in the fuel world, yes, that is exactly why we are here.  

Clause passed.