Page 2071 - Week 07 - Thursday, 17 June 1993
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Mr Moore: And it is so important to keeping a balance.
MR HUMPHRIES: I get the joke, Mr Moore. The planning policies of successive governments have restricted the siting and location of service stations in the Territory and have diminished competition. The number of operators in the ACT market has also dwindled, thereby relaxing the level of competition. Minimal incentive to competition is a serious problem for competition in the market and efficiency in the market. Thus, as the report quite succinctly puts it:
ACT consumers are not getting the deals they could be.
Madam Speaker, the Government has decided to adopt the recommendations outlined in the report, including recommendations drawing independents into the markets through a number of artificial devices. The most significant of those devices is contained in recommendation 11 of the report. That recommendation calls for independents to be, as it were, introduced artificially into the Canberra market by inviting expressions of interest from independent operators in relation to sites at Gold Creek and Gilmore and other sites, up to a total of seven sites. It states that the sites should meet planning requirements recommended by this report and should be offered at market value by direct grant or restricted auction. The granting of those sites would take approximately six months, and eligible grantees would have to be owner-operators and not own more than three sites already in the ACT. That is obviously designed to encourage new people into the market.
Madam Speaker, creating competition is not easy. Creating it quickly is fairly described as impossible. The measures proposed, on their face, might seem to offer some chance of changing the character of the ACT market and generating some desperately needed competition; but the cost of doing so, in my view and my party's view, might be prohibitive. Let us look at the pitfalls that might accompany this course of action. First of all, the Government is creating a preferential entry into the market for new operators. Secondly, it is incurring a considerable loss of revenue, because the sites which are being sold under this arrangement will fetch less than sites sold in an open market by auction or by direct sale. The third problem is that with this course of action we are disadvantaging existing operators in the market. They can reasonably come back to the Government and say, "We paid this for this site or we paid that for this site in the ACT. Why is it that these other operators get a site of the same dimensions for much less?". The fourth pitfall is that with this policy we have no guarantee that petrol prices will indeed come down.
Madam Speaker, this is a risky strategy. The Government is trying to fix the market. It has no guarantee of success and it is therefore gambling with quite considerable sums of money of the ACT taxpayer. Certainly there is a cost to the ACT community in pursuing this policy, but there is no guarantee of a good return. Can the Government ensure, for example, that sole independents will not in fact be a front for the oil majors? Can they institute arrangements in the granting of leases to these operators, to these so-called independents, which in fact ensure that they remain independent? Can they prevent these operators from becoming part of the cartel which, I think it is fairly reasonable to say, operates in the ACT at the present time? If so, will the Government outline to the Assembly what measures it proposes to take which will do those things?
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