Page 2994 - Week 10 - Thursday, 15 September 1994
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The Minister himself has been very defensive, although, as far as I am aware, he has not seen the report, as I have only just tabled it. For some strange reason, the two Labor members of the committee have been very defensive about it too. I want to make it quite clear from the outset that the report is not critical of the Government or of the Minister. Madam Speaker, it begins with the proposition that the Minister, in good faith, moved to achieve a commendable objective, and that was to get down the price of petrol in Canberra. He gave evidence to the committee that he took that decision as a political decision, which he is entitled to do, and that he took it in the knowledge of the ramifications of the decision. He took it, knowing what the consequences would be. It is only in that respect that I have to put a question mark on it, because I cannot believe that the Minister or the Government would have made the decision that they made if they had known that the total burden of their decision was going to fall on a small number of local small business people. That is, in fact, what happened.
Mr Connolly's intentions were good intentions. He made it clear that his aim was to force the major oil companies to deal fairly in petrol pricing in the ACT. Unfortunately, he has not achieved that. His decision to introduce Burmah Fuels has had no impact whatsoever on the major oil companies.
Mr Connolly: We will argue this one through to February, Trevor.
MR KAINE: I will be interested in your argument, Mr Connolly; but I make the point again that the committee is not critical of your decision. It is concerned about the outcomes of it. I repeat that we accept that you made your decision in good faith. There is no criticism, implicit or otherwise, of you or the Government in that. We believe that your objective was a good one too; but our investigation of the evidence suggests to us that the outcome was not what you wanted.
You did achieve approximately a 3 per cent reduction in the price of petrol, which was a good outcome; but the impact of that, I believe, is not the impact that you expected, because it has had no effect at all on the major oil companies and it has had a significant effect on the 83 small business operators who run service stations in the Territory. The effect has been estimated at $9m on an annualised basis. In the course of the first year after the introduction of Burmah Fuels $9m will remain in the pockets of vehicle drivers that would otherwise not have been in their pockets. That is a good thing. However, the fact is that that $9m has not come out of the pockets of the major oil companies; it has come out of the pockets of the 83 small business operators who run service stations in the Territory. I do not believe that that was your intention, Mr Connolly. So I think that there were ramifications that were not what you expected.
In respect of the flow-on effect of this, there was strong evidence given to the committee that, because of the depressed price at which they can now sell their product, without the guarantee of continuing price support from the majors - there is no guarantee that that will be provided - a number of small service station operators are going to go out of business. I know that one of the Labor members, in a dissenting report, said, "Well, this was a process of rationalisation that had already begun". We do not dispute that. I, for one, am not saying, as is alleged in one of these dissenting reports, that 30 service stations are going to close, and that they are going to close directly because of Mr Connolly's decision to let Burmah in. It may be only 10. It may be only 15.
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