Page 785 - Week 03 - Wednesday, 13 April 1994
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Mrs Carnell: In other words, they do not pay it.
MR CONNOLLY: Do not be silly and jump in too quickly, because you may be very embarrassed. They were not renting an operative service station site; it had to have new tanks. The investment in those new tanks is money thrown away because at the end of the period of three to five years that site will revert for redevelopment. It is the Kingston redevelopment site; it will not be a long-term petrol station site. So there has been a real cost to Burmah. Either they paid the cost of putting in the tanks, which we allowed them to offset from the rent, or we paid it ourselves as the landlord in order to have a facility that, as landlord, we could rent to them. But it matters not. That was seen as appropriate by the Australian Valuation Office, as you will see in the valuer's report.
Being again very cautious, we were assuming for the purposes of this licence that there would be an annual sale of petrol of 3.6 million litres and we did all our calculations on 3.6 million litres. You will see that the Australian Valuation Office report is based on 3.6 million litres. We thought, being very careful and cautious and acting in the best interests of the Government, that there was the possibility that more petrol would be sold. They pay on 3.6 million litres per annum if they do not sell a litre; but we thought they may do rather better, so there is a clause that says that if they sell more they pay at a rate based on that higher litreage.
I note that the Motor Trades Association tell us that they are selling a million litres of petrol a month at the Burmah site. If it is in the Motor Trades Advocate it must be right. So, working on the assumption that they are selling a million litres of petrol a month, that works out under the terms of the licence agreement at a revenue to the ACT Government of in the order of $216,000 per annum. So over a period of, say, five years, that is $1m in front for a site that was lying idle and would otherwise have earned the ACT Government no revenue at all.
In the meantime, of course, it has the effect of reducing petrol prices by of the order of 6c a litre, which is worth to the ACT community about $10m in money that stays in the pockets of ACT consumers and ACT small business people. That is a very good outcome for the ACT and the Government.
Mr Humphries: What small business people?
MR CONNOLLY: Mr Humphries, I am sure that ACT small businesses are very happy to be filling their tanks with petrol at 69.9c a litre. I am sure that if they wanted to show solidarity with the Motor Trades Association they could go along to their petrol retailer and say, "I would really rather pay 75c or 77c a litre", which is what they used to pay in Canberra and what they are still paying in regional New South Wales. Small businesses will be noticing a significant advantage in having a real reduction in the price they pay for petrol. When we put up the excise by half a cent - and you were a member of a Cabinet that put up fuel excise by 3c - you came in here and screamed and gave us this diatribe about how a half a cent increase in fuel excise would destroy small business; they could not possibly stay profitable and pay that additional half a cent a litre. Mr Humphries, I have given them a saving of 6c a litre, which must be a pretty good deal for local small business.
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