Instead of relying on policy measures to offset the impact of record high fuel prices, the transport and logistics industry should increase its capacity for innovation, innovation minister Kim Carr said.
Speaking at the Hunter Transport and Logistics Industry Forum, Mr Carr said figures show that only about a third of firms in the transport and storage industry introduced a product, service, operational or organisational innovation in 2004 and 2005.
“That’s a credit to the businesses involved, but it also means two-thirds of the industry didn’t innovate during those two years,” he said.
“Transport and storage accounted for just 1.2 per cent of business spending on R&D in 2005-06, which is not high for a sector that generated 4.5 per cent of GDP that year.”
He said the importance of innovation becomes ever more as the industry struggles to counter the impact of soaring fuel prices.
“It is idle to argue about when [oil] production will peak. What matters is that sooner or later, the stuff will start running out. And as supply dwindles, prices will escalate.
“Instead of grandstanding over pennies, we need to be reducing our reliance on fossil fuels… Innovation and research promise us better biofuels, cheaper solar panels, more efficient hydrogen fuel cells, and plug-in electric vehicles that can recharge in ten minutes,” he said.
Rejecting the concerns that oil prices may further climb in the upcoming carbon economy, Mr Carr said the Federal Government’s carbon pollution reduction scheme would have an insignificant impact on fuel prices.
“The very worst case modelled by the Future Fuels Forum suggested prices could hit $8 a litre within a decade. Against increases like that, the impact of emissions trading pales into insignificance. It has been estimated that every $10 added to the carbon price will add 2.5 centres a litre to petrol and diesel prices.
“Whichever way you look at it, the scheme will have less impact on fuel prices than trends in the international oil market.”
Upholding the views of the unions and industry peak bodies, he agreed transport and fuel should be part of the scheme to ward off subsequent economic pressures.
“With transport accounting for 14 per cent of our emissions, leaving it out would just make everything else more expensive.
“Including transport delivers the lowest overall costs for households and industry. It also gives the transport sector market-based incentives to adopt fuel-efficient, low-emission vehicle technologies – which I think most people in the industry would prefer to regulation,” Mr Carr said.
“Whatever the challenge, innovation, science and research can provide the answers.
“Innovation doesn’t have to be difficult. Small changes can make a big difference. I don’t deny we have a long journey ahead of us, but the transport and logistics industry knows all about long journeys,” he said.