Mr PETER DEBNAM(Vaucluse) [11.00 a.m.]: I congratulate the member for Cronulla on his contribution, during which he made a number of points the Government needs to be reminded of. On election night I said to Morris Iemma, the member for Lakemba and the part-time Premier, that if he picked up our policies we would applaud him. We had set out a policy framework that would address many of the problems in New South Wales.

I am pleased to have the opportunity to speak to the bill because it follows on from a policy initiative the Coalition began to push in earnest early last year and it has picked up a number of those points, but it has not gone far enough. Last year the Coalition decided that, given the lack of leadership by the State Government in the past 12 years on biofuels and alternative energy sources, we would push biofuels and, specifically, ethanol. The Leader of The Nationals and I met with oil companies, ethanol producers, car groups, service station associations, environmental groups and other interested parties to try to find a way forward to promote ethanol.

In August 2006 we announced agreement on an ethanol action plan to boost ethanol production and distribution to 10 per cent by 2011. We made the point that the use of ethanol would drastically reduce air pollution from motor vehicle emissions in New South Wales, which would result in major health benefits, particularly for those in metropolitan areas where respiratory illnesses are a major killer. Over the last year I have continually made the point that ethanol is a win-win for motorists, farmers and the New South Wales community. New South Wales, especially Sydney, has the worst air pollution in Australia, and as a result the highest cost burden on every family. After several roundtable meetings with stakeholders in the ethanol debate we reached an agreement that resulted in an action plan that set out a number of points.

The first point was expansion of ethanol usage according to the following timetable: 2007 to 2 per cent, 2008 to 4 per cent, 2009 to 6 per cent, 2010 to 8 per cent and 2011 to 10 per cent, that 10 per cent being the New South Wales usage of fuels for motor vehicles.

The second point was upgrading production and distribution infrastructure. The third point was the sale of E10 at up to 500 service stations across New South Wales—currently it is in the order of 60. The fourth point was a strong marketing plan in cooperation with the NRMA and environmental groups, and a leadership role for the Government on other alternative fuels. We held two roundtable meetings about four or five weeks apart, and I am pleased to say that in the middle of last year there was a shift in the debate on ethanol in Australia. Part of that shift came from the fact that we were pushing so hard for the increased use of ethanol in the roundtable meetings. We indicated that a coalition government would implement the action plan on day one of a new Government, and that we would show leadership in embracing ethanol and biofuels.

A few years ago there was a disgraceful anti-ethanol push by the Labor Party and, I suspect, the oil companies through one or two media outlets, which suggested that ethanol was a bad idea for Australia. Nothing could be further from the truth. Using ethanol is a win-win situation.

Unfortunately, the Labor Party took a political stance against ethanol and really damaged its prospects. As the member for Cronulla said, I decided to convert my car and run it on 85 per cent ethanol and 15 per cent unleaded petrol. I have done this for 12 months and I cannot notice any difference between unleaded petrol and the 85 per cent ethanol fuel. Someone asked me where I fill up my car. I fill it up at three service stations, one at Forestville, one at South Granville and one at Liverpool. The black box under the hood tests the fuel going into the engine and detects whatever mixture it is. The car will run on 100 per cent unleaded petrol or up to 85 per cent ethanol. For those who do not understand why it is 85 per cent ethanol and not 100 per cent ethanol, ethanol is basically alcohol. The 15 per cent unleaded petrol "poisons" the alcohol so that it cannot be used for drinking.

The object of the bill is to mandate a minimum 2 per cent ethanol content for total petrol sales in New South Wales by requiring primary wholesalers of petrol to ensure that the volume of ethanol sold by them in the form of petrol-ethanol blend is at least 2 per cent of the volume of all petrol sold by them. The bill will apply only to sales to a person in New South Wales or for delivery in New South Wales. The difficulty I have with the bill, and a major concern we should all have, is that the Government is back-pedalling on the 10 per cent. On 30 May the Government moved a motion expressing concern about petrol prices, something we are all concerned about. At that time I said that I was concerned that I had heard nothing from the Government about pursuing its commitment to ethanol. The point I made on 30 May was that we had not yet seen a bill mandating the use of ethanol. I was concerned that the Premier was back-pedalling on a pre-election commitment to alternative fuels.

I called on the Premier to show some leadership in the use of alternative fuels, and noted that only one month before the election he made a half-hearted commitment to embrace our plan for ethanol. However, I would like to go further. Now that I have seen the bill my concerns are the same. The Government is back-pedalling on its 10 per cent commitment to ethanol, which is a disgrace. It will require a concerted push by the Government and the industry to reach the 10 per cent by 2011. They will run out of time unless they start to do that in the next few months. As I said, for the past 12 months I have run my car on 85 per cent ethanol. Why does the Government not convert its cars to 85 per cent ethanol? In the last year it issued a half-hearted edict suggesting that Government cars might use E10.

Mr Thomas George: If they were serious about it they would.

Mr PETER DEBNAM: Yes. But Government drivers and those using Government cars have never been asked whether they are using E10. As I stated, 60-something service stations across the State sell E10 and they are relatively easy to access. But why not go to the next step? In the next 12 months or even over the next four years, in consultation with ethanol producers, why not put the black box under the engine of as many Government cars as possible? It can be done, but it is a matter of leadership. Like everything else we are seeing, after the election the Premier seems to be confused about what to do. This is an opportunity to take a bold step. Commit to converting Government vehicles to 85 per cent ethanol and make it happen.

A further reason for the Government to take this step is the quality of air in metropolitan areas of New South Wales. Last month a Minister in the Chamber was obviously not aware of an upper House report on air quality that had been issued in November last year. The Government's lack of action over the past 12 years is damning and the effects of pollution on people's health, particularly in Sydney and south-west Sydney, are frightening. Ethanol use results in a 30 per cent reduction in pollutants from motor vehicles compared with petrol use. That is another reason for the Government to be bold and embrace ethanol and biofuels. By increasing the use of ethanol the Government has a wonderful opportunity to not only assist motorists and farmers and our trade balance but also improve people's health. In the long term it would make a real difference to the health budget.

While I am talking about cleaner fuels and cleaner vehicles, I refer to another initiative that the Coalition spoke about in the run-up to the election campaign, that is, the promotion of LPG and hybrid electric vehicles. I spoke about cutting registration costs by $50 for all LPG and hybrid electric vehicles and providing approval for such vehicles to travel in transit lanes. We need to encourage people in congested metropolitan areas to embrace this new technology, which is good for us all, by introducing bold initiatives. Allowing these types of vehicles to use transit lanes would make a difference. I congratulate the Government on the proposed mandate that petrol contain 2 per cent ethanol. It has to show its leadership in the next few months by wholeheartedly embracing 10 per cent ethanol content and making it happen. It cannot go slow on this initiative. If it does, we will not reach the 10 per cent target by 2011, which would be detrimental to us all. It has to show its leadership and put the 10 per cent action plan in place and over the next four years convert all government vehicles to use of fuel with 85 per cent ethanol content.