government fuelwatch warnings leaked

Maybe there is a leaker who's not a loyal Ruddite

By Maria Hawthorne | May 28, 2008
A LEAKED document has blown a hole in the Rudd Government's FuelWatch scheme, showing four federal departments warned the scheme could send petrol prices up, not down.

The Cabinet document, leaked to the Nine Network, contained a caution from Prime Minister Kevin Rudd's own department 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.

"PM&C (Prime Minister and Cabinet) notes that, while the proposed national FuelWatch scheme will likely succeed in removing intra-day price volatility in the retail petrol market, which is a concern to many consumers, the impact of the proposed scheme on the overall pump price is not clear," Mr Rudd's department said.

"Econometric modelling undertaken by the Australian Competition and Consumer Commission (ACCC) is somewhat inconclusive with respect to the overall pump price, but indicates that a small overall price increase cannot be ruled out.

"The proposed scheme will also result in an increase in the compliance burden in the economy, with Treasury estimates indicating that the proposed scheme will result in ongoing increased operating costs of around $4000 per annum to affected small businesses."

It is the second Cabinet leak this week to embarrass the Government over its plan for a petrol monitoring scheme, based on a West Australian model.