Alicia Wood, 15 December 2015

LABELS can be misleading, job titles more so. And in the latest stoush over ethanol fuel in NSW politics, the traditional conservatism of the Liberal Party and the title of “minister for better regulation” will take a battering.

After the election, the Fair Trading portfolio was abolished, and Victor Dominello became the state’s first ­“Innovation and Better Regulation” minister. Or as his colleagues like to call it: Minister for “whatever that is”.

A Coalition government would traditionally see “better regulation” as a euphemism for “less regulation”. But in forcing all service stations, including 904 small business owners, to install ethanol pumps at a cost of about $900,000, better regulation will mean more red tape, a cost impost on small business, and a hit to motorists.

It is an idea that has caused serious concern within the traditional economic Liberals in the government. It is also an argument that has already been run — and lost.

In 2012 former Premier Barry O’Farrell was forced to dump a plan to ban regular unleaded petrol, in order to hit the 6 per cent ethanol mandate, after it was ­revealed 750,000 motorists would pay an extra $150 year, and Crown Solicitor’s advice warned the policy could be unconstitutional.

The Australian Competition and Consumer Commission also warned it would drive up prices.

Upper House government Whip Peter Phelps has long opposed the ethanol mandate, under which oil companies have to make sure 6 per cent of fuel sold is ethanol. He has hit out at the retail compliance plan revealed by The Daily Telegraph yesterday as “dreadful” and an affront to what the Liberal Party is meant to stand for.

“The idea of mandating a particular type of fuel is stupid beyond belief. You may as well mandate that every hamburger in NSW has beetroot on it. This is a bad idea which should be completely repealed, rather than try to be patched up,” he says.

The argument for increasing ethanol use is that it will ensure regional job growth, provide fuel security and has environmental benefits

“It is bad for consumers, it is bad for service station ­owners and it is bad for a­­ ­government that is meant to be looking after small business and free enterprise.”

Like other conservative Liberals, Phelps is concerned about the government ­interfering in the free market — anathema to the ideals of the party.

“It is a ridiculous interference in the market. People do not want to use ethanol. That is why we are going to have to force it down the throats of the poor service station owners. It’s bad economics, bad political philosophy. It is just dreadful.”

The argument for increasing ethanol use is that it will ensure regional job growth, provide fuel security and has environmental benefits.

Manildra, the only ethanol producer, directly ­employs 1600 people — the majority of whom are in ­regional NSW, so it is no surprise the National Party supports the ethanol mandate. In its Bomaderry plant Manildra employs 300 and argues this would increase if the 6 per cent mandate was reached.

But for the Coalition, it is a decision which is a delicate balance between protecting regional jobs, and the ­damage that could be done to the Liberal brand from market interference.

A senior Liberal Party source says the government is moving away from ­traditional Liberal values, and there is concern among key supporters of the ultimate cost.

“There is a concern within the party that economic liberalism is being sidelined by a left-majority cabinet. Ethanol is the prime example. The government has legislated a monopoly and now will force this product on unwilling motorists. This policy distorts the fuel market and reduces choice for motorists,” the source said.

Another party source is glibber: “This makes me so f … ing angry. It’s not a policy driven by consumer demand — because people don’t want to use the shit.”

And so Premier Mike Baird will have a minefield to navigate as cabinet considers the recommendation to force ethanol on all service stations this week.

Cost of living and regional jobs are just two of the key ­issues at stake.

Another is his party’s very identity.

Extracted in full from the Daily Telegraph.