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Today`s Top Picks

FuelWatch warnings `ignored`Jackaroo becomes $10bn man

ANDREW Forrest is Australia`s first ever $10 billion man, but he prefers a hard hat to Armani in the office.



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Latest Comments:

I don't know why this is a surprise to anyone.All the research into Fuelwatch in Western Australia has shown that it has reduced the volatility of petrol prices but has also resulted in a slightly higher average price than would be the case absent Fuelwatch.People are happier paying slightly higher petrol prices if it means they don't feel taken advantage of anymore - and people feel taken advantage of buying petrol for 159.9 one afternoon knowing that in the morning it was only 144.9.

Posted by: Trevor of Melbourne 9:12pm today

Big deal so Kevin Rudd made a mistake by not taking advice on "Fuel watch" stop and think people petrol went up over nightwhen Lib's said they will drop the GST if they get voted back in and her we have the Lib voters screaming there t$%#ts off at Rudd, but hang on Howard went to WAR against being advised by his advisers oh but thats different hey.

Posted by: Kevin Hay 9:09pm today

Bring on the 1969's. Petrol was only 3 bob (30cents) a gallon. Michael

Posted by: Michael Green of Greenwith. South Australia 9:05pm today
Read all 33 comments

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  • Four Rudd departments warned about FuelWatch
  • Said scheme could send petrol prices up, not down
  • Swan defends plan due to ACCC backing

ANOTHER leaked document has blown a hole in the Rudd Government`s FuelWatch scheme, showing four federal departments warned it could send petrol prices up, not down.

As rocketing fuel prices today forced Qantas to axe services and shed jobs, a cabinet document revealed Prime Minister Kevin Rudd`s own department cautioned that FuelWatch could lead to "a small overall price increase`` in the pump price.

The finance department, the industry department and the department of resources and energy also argued against the scheme, under which service stations will be required to fix their prices each day.

Treasurer Wayne Swan tonight admitted a number of departments had argued against FuelWatch but said advice from the competition watchdog, the Australian Competition and Consumer Commission (ACCC), was superior.

"It is true there was some bureaucratic advice against FuelWatch,`` Mr Swan told reporters in a hastily-convened press conference tonight.

"I don`t believe that was well grounded and I believe it was overwhelmed by the advice from the ACCC.``

Prime Minister Kevin Rudd stood by the advice from the ACCC on the merits of FuelWatch.

"The Government had conflicting advice before it (on petrol prices),`` he said.
"We took the advice of the ACCC because the ACCC was the only body that had done the econometric modelling on the impact of FuelWatch. That, therefore, was the way to go.

"We`re confident in the ACCC`s position, we`ve rested our policy on that basis and we`ll be proceeding with this policy.``


It was the second damaging leak in as many days, after a letter from Resources Minister Martin Ferguson arguing against FuelWatch embarrassed the Government.

The Opposition targeted Mr Ferguson, Finance Minister Lindsay Tanner, Small Business Minister Craig Emerson and Assistant Treasurer Chris Bowen in question time today over who supported the scheme, which has been operating in Western Australia for several years.

Mr Swan said cabinet was guided by the ACCC, which had analysed its own econometric modelling of the WA scheme and determined consumers would be better off.

Departments were free to make whatever comments they liked but cabinet made its own decisions, he said.

"It`s not unusual for there to be coordination comments of this nature,`` Mr Swan said.

"In a healthy robust cabinet debate, they are welcome. But at the end of the day, ministers take the decisions in the national interest.

"We decided we would follow the advice of the ACCC. But it`s not just the ACCC - it`s our own commonsense view of the world.

"I personally strongly believe that this will be beneficial to Australian motorists.``

The PM&C advice said FuelWatch would cost small businesses about $4000 a year in compliance costs.

But Mr Bowen said cabinet had considered the estimated $20 million cost to small businesses but accepted ACCC advice that the costs would be absorbed by the savings.

"The ACCC`s advice to the Government was that even on a conservative basis there was no evidence to reach the conclusion that there was a possibility of a price increase,`` Mr Bowen said.

Mr Swan admitted that the two leaks in successive days suggest "problems`` with the integrity of the cabinet process.

"That does indicate that there are some problems out there with the integrity of the cabinet process so that those matters will be investigated,`` he told ABC TV.

"The law`s been broken, procedures will kick in, it will be investigated.``

Mr Ferguson was forced to defend FuelWatch in parliament today, a day after his letter arguing against the scheme was leaked to The Australian newspaper.

The Opposition has decided to cripple FuelWatch by using its numbers in the Senate to block the part of the scheme that would force retailers to lock in prices for a 24-hour period.

Three of the departments also opposed the lock-in period, which would ban price drops as well as rises over the 24-hour period.

PM&C recommended another option, simply providing increased price information to consumers, possibly on an hourly basis.

But Mr Swan said that was not an acceptable option.

"Because informing consumers requires there to be a stable price in 24 hours, that`s why, and moving away from that principle basically enters FuelWatch,`` he said.

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Today`s Top Picks

Jackaroo becomes $10bn man

ANDREW Forrest is Australia`s first ever $10 billion man, but he prefers a hard hat to Armani in the office.



Font size: +-

Send this article:PrintEmail

Have Your Say

Latest Comments:

I don't know why this is a surprise to anyone.All the research into Fuelwatch in Western Australia has shown that it has reduced the volatility of petrol prices but has also resulted in a slightly higher average price than would be the case absent Fuelwatch.People are happier paying slightly higher petrol prices if it means they don't feel taken advantage of anymore - and people feel taken advantage of buying petrol for 159.9 one afternoon knowing that in the morning it was only 144.9.

Posted by: Trevor of Melbourne 9:12pm today

Big deal so Kevin Rudd made a mistake by not taking advice on "Fuel watch" stop and think people petrol went up over nightwhen Lib's said they will drop the GST if they get voted back in and her we have the Lib voters screaming there t$%#ts off at Rudd, but hang on Howard went to WAR against being advised by his advisers oh but thats different hey.

Posted by: Kevin Hay 9:09pm today

Bring on the 1969's. Petrol was only 3 bob (30cents) a gallon. Michael

Posted by: Michael Green of Greenwith. South Australia 9:05pm today
Read all 33 comments

We welcome your comments on this story. Comments are submitted for possible publication on the condition that they may be edited. Please provide your full name. We also require a working email address - not for publication, but for verification. The location field is optional.Read our publication guidelines.

Submit your feedback here:

(So you don`t have to retype your details each timeyou send feedback.)

Video

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Planning a Holiday? - Visit our Europe section for the latest destination offers!
 
Overflowing with benefitsExperience life the Platinum Way With American Express Platinum
 
Online Auctions Online auctions on a range of big brands. Bid Now! Dontmissout.com.au
 
Toyota`s Great OffersToyota Means Business. Visit the website and come crunch some numbers.
 
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