Page 2074 - Week 07 - Thursday, 17 June 1993
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My office was in touch with the PSA yesterday and asked them whether this situation had changed, and the view of the PSA was that they stand by the conclusions drawn in that report of August 1991. The chairman of the PSA, Professor Allan Fels, said, and I quote from his press release:
The Prices Surveillance Authority has concluded after a detailed examination of Canberra petrol prices that intervention by the ACT Administration to control prices is, on balance, undesirable.
He went on:
It would be highly undesirable to return to the days before the PSA when there were as many as five different governments in Australia involved in setting maximum wholesale prices.
The press release went on to say:
He said the evidence also showed that the gap between average Canberra and Sydney prices had narrowed since the 1987 inquiry. Australian Bureau of Statistics figures for the year to the end of the March 1991 quarter showed average Canberra retail prices were 72.6 cpl compared to 70.63 cpl in Sydney. Adjusting for freight costs into Canberra and differences in local taxes [business franchise fees] the gap was an average of 1.67 cpl. The comparable gap for the year ended March 1988 was 4.62 cpl.
(Extension of time granted) Madam Speaker, the PSA at that time produced a table indicating that the differential between the Sydney price and the adjusted price for Canberra, taking into account things such as freight and franchise fees, was only 1.67c. It went on to explain at another time some of the reasons for that difference. Those reasons included the freight cost of 1.8c a litre, the higher site financing costs of up to 3c to 5c a litre more than in Sydney; higher site development standards imposed by the ACT Administration which added some 17 per cent to the total cost of building a petrol station in the ACT, construction costs in Canberra which were generally 6 per cent higher than in Sydney, and award wage differences resulting in an additional 0.3c to 0.4c a litre for Canberra service stations.
Most significantly, Madam Speaker, the PSA said, in respect of petrol prices in Canberra, that real profit margins had not been excessive over the long term. But, of course, profit margins are exactly what this legislation to regulate petrol prices attacks, not the factors that the PSA identified. It is not high site development costs; it is not planning costs; it is not the cost of wages in the ACT. None of those things are identified in this legislation. The Minister is attacking the one issue which was not mentioned by the PSA, and that is profit margins. Professor Fels did not say, "You have profiteering going on in the ACT".
Mr Connolly: Professor Fels was wrong on a lot of issues.
MR HUMPHRIES: Professor Fels is wrong. Here we go. Mr Connolly knows better than the Prices Surveillance Authority, whose business it is to make inquiries into whether prices charged in this country for goods are fair. Madam Speaker, that is just ridiculous. The PSA view is clear.
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