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Fuel excise rise would be ‘forcefully’ fought by motoring groups Fuel excise rise would be ‘forcefully’ fought by motoring groups
(about 1 hour later)
Motoring groups have vowed to “forcefully” campaign against a decision by the Abbott government to increase petrol excise, warning it would be another breach of faith with voters.Motoring groups have vowed to “forcefully” campaign against a decision by the Abbott government to increase petrol excise, warning it would be another breach of faith with voters.
Guardian Australia revealed on Wednesday that federal cabinet was likely to include the controversial move in the government’s first major economic statement next week, the budget, which will also include a deficit levy, cuts to family payments and an increase in the pension age.Guardian Australia revealed on Wednesday that federal cabinet was likely to include the controversial move in the government’s first major economic statement next week, the budget, which will also include a deficit levy, cuts to family payments and an increase in the pension age.
Several sources told Guardian Australia the tax on fuel – frozen since 2001 – had been considered and was likely to be included. But with fuel prices above $1.60 a litre in parts of the country, it is a politically dangerous decision. It is understood the government is likely to reintroduce indexation rather than legislate an immediate price rise, but with fuel prices above $1.60 a litre in parts of the country, indexation – annual price rises in line with inflation – would also be politically dangerous.
The Australian Automobile Association (AAA) demanded the government rule out the reported increase in fuel tax, saying the “unjustified” move was not flagged to voters before the election.The Australian Automobile Association (AAA) demanded the government rule out the reported increase in fuel tax, saying the “unjustified” move was not flagged to voters before the election.
“Any increase in fuel excise in this budget would be unjustified,” said AAA’s chief executive, Andrew McKellar. “The government must be honest with motorists and confirm that there will be no increase in fuel tax,” he said.“Any increase in fuel excise in this budget would be unjustified,” said AAA’s chief executive, Andrew McKellar. “The government must be honest with motorists and confirm that there will be no increase in fuel tax,” he said.
The NRMA said it was also deeply concerned about the prospect of higher fuel excise. It vowed to “forcefully” represent its 2.5m members, who regularly said the price of fuel was one of their biggest motoring concerns.The NRMA said it was also deeply concerned about the prospect of higher fuel excise. It vowed to “forcefully” represent its 2.5m members, who regularly said the price of fuel was one of their biggest motoring concerns.
"Motorists already pay around $15bn a year through fuel excise and only $4bn of that is spent on roads, so motorists are already contributing heavily to general revenue," NRMA spokesman Peter Khoury told Guardian Australia. "If the government wants to spend more money on roads, they should spend some of what they are already raising in excise.""Motorists already pay around $15bn a year through fuel excise and only $4bn of that is spent on roads, so motorists are already contributing heavily to general revenue," NRMA spokesman Peter Khoury told Guardian Australia. "If the government wants to spend more money on roads, they should spend some of what they are already raising in excise."
A fuel excise increase of 1c per litre would deliver the budget $391m each year, and a 3c increase would yield about $1.17bn, according to modeling by AAA. Alternatively, a reintroduction of indexation of fuel excise linked to the consumer price index would bring in $339m next financial year, rising to $1.6bn by 2017-18.A fuel excise increase of 1c per litre would deliver the budget $391m each year, and a 3c increase would yield about $1.17bn, according to modeling by AAA. Alternatively, a reintroduction of indexation of fuel excise linked to the consumer price index would bring in $339m next financial year, rising to $1.6bn by 2017-18.
The Greens deputy leader, Adam Bandt, said Tony Abbott should end fuel subsidies for wealthy miners before targeting motorists with higher fuel excise.The Greens deputy leader, Adam Bandt, said Tony Abbott should end fuel subsidies for wealthy miners before targeting motorists with higher fuel excise.
“Taxpayers shouldn't fork out billions each year just so the likes of Gina Rinehart can buy cheap diesel,” Bandt said.“Taxpayers shouldn't fork out billions each year just so the likes of Gina Rinehart can buy cheap diesel,” Bandt said.
The Labor frontbencher Bernie Ripoll made a similar point while appearing on Sky News, asking why the government would protect the diesel fuel rebate to miners while slugging ordinary motorists.The Labor frontbencher Bernie Ripoll made a similar point while appearing on Sky News, asking why the government would protect the diesel fuel rebate to miners while slugging ordinary motorists.
As Guardian Australia reported, the government was seriously considering changes to the rebate paid to farmers and miners for the off-road use of diesel, but is understood to have dropped the idea after fierce lobbying from both sectors. But it is likely to change a $150m-a-year subsidy for ethanol producers, which rebated them the full amount of excise paid on ethanol as a transport fuel.As Guardian Australia reported, the government was seriously considering changes to the rebate paid to farmers and miners for the off-road use of diesel, but is understood to have dropped the idea after fierce lobbying from both sectors. But it is likely to change a $150m-a-year subsidy for ethanol producers, which rebated them the full amount of excise paid on ethanol as a transport fuel.
The Liberal senator Zed Seselja, who opposes the deficit levy, told Sky News his party should keep taxes as low as possible.The Liberal senator Zed Seselja, who opposes the deficit levy, told Sky News his party should keep taxes as low as possible.
The opposition leader, Bill Shorten, said Labor would consider four factors when assessing Tuesday’s budget: whether it was fair, encouraged growth, helped families make ends meet, and kept election promises. Shorten vowed to hold Abbott to account for increasing tax, including through a deficit levy on higher income earners.The opposition leader, Bill Shorten, said Labor would consider four factors when assessing Tuesday’s budget: whether it was fair, encouraged growth, helped families make ends meet, and kept election promises. Shorten vowed to hold Abbott to account for increasing tax, including through a deficit levy on higher income earners.
“Tony Abbott, there are not enough lame excuses in all the world, there are not enough weasel words in all the dictionaries in all the world for you to be able to tell people that you are not breaking your promises,” he said.“Tony Abbott, there are not enough lame excuses in all the world, there are not enough weasel words in all the dictionaries in all the world for you to be able to tell people that you are not breaking your promises,” he said.
The treasurer, Joe Hockey, dismissed claims the deficit levy would be a broken promise, pointing to the separate levy on big business to fund paid parental leave.The treasurer, Joe Hockey, dismissed claims the deficit levy would be a broken promise, pointing to the separate levy on big business to fund paid parental leave.
“We went to the last election promising to introduce a levy for PPL so claims that we said we would never introduce new taxes are just wrong,” Hockey told the Australian Financial Review.“We went to the last election promising to introduce a levy for PPL so claims that we said we would never introduce new taxes are just wrong,” Hockey told the Australian Financial Review.
Former prime minister John Howard reduced petrol excise by 1.5c a litre when he was under assault over “cost of living” concerns after the introduction of the goods and services tax in 2001. He then froze it at 38.14c a litre, abolishing the twice yearly automatic indexation of the tax that Labor had introduced in 1983.Former prime minister John Howard reduced petrol excise by 1.5c a litre when he was under assault over “cost of living” concerns after the introduction of the goods and services tax in 2001. He then froze it at 38.14c a litre, abolishing the twice yearly automatic indexation of the tax that Labor had introduced in 1983.
It was a decision with a cost that escalated over the years, and now leaves the budget well over $5bn a year worse off.It was a decision with a cost that escalated over the years, and now leaves the budget well over $5bn a year worse off.
Revenue from a fuel excise hike could be funnelled towards building new roads – which the government argues increases economic growth and national productivity and is also popular with the motorists who would be paying the increase in excise.Revenue from a fuel excise hike could be funnelled towards building new roads – which the government argues increases economic growth and national productivity and is also popular with the motorists who would be paying the increase in excise.
The government has already said it will provide a $2bn loan to speed up construction of Sydney's WestConnex road project. The concessional loan, to be included in the budget, comes on top of $1.5bn the Abbott government has already pledged to the project.The government has already said it will provide a $2bn loan to speed up construction of Sydney's WestConnex road project. The concessional loan, to be included in the budget, comes on top of $1.5bn the Abbott government has already pledged to the project.
The assistant infrastructure minister, Jamie Briggs, said the low-interest loan would create thousands of jobs and bring forward completion of the second part of the motorway by up to 18 months.The assistant infrastructure minister, Jamie Briggs, said the low-interest loan would create thousands of jobs and bring forward completion of the second part of the motorway by up to 18 months.
Briggs told reporters on Thursday he was confident funds would also be allocated in the budget to speed up an upgrade of Adelaide's north-south road corridor.Briggs told reporters on Thursday he was confident funds would also be allocated in the budget to speed up an upgrade of Adelaide's north-south road corridor.
Asked directly about the fuel excise in an ABC interview earlier on Thursday, Briggs said:Asked directly about the fuel excise in an ABC interview earlier on Thursday, Briggs said:
“That’s a matter that the treasurer will talk about obviously in the budget.“That’s a matter that the treasurer will talk about obviously in the budget.
“There will be a range of measures that will be difficult for us to sell politically … We have no joy in doing much of what we have to do.”“There will be a range of measures that will be difficult for us to sell politically … We have no joy in doing much of what we have to do.”
Asked about the fact petrol prices are much higher now than in 2001, when political pressure prompted the decision to freeze indexation, Briggs said he would leave it to the treasurer to outline the strategy.Asked about the fact petrol prices are much higher now than in 2001, when political pressure prompted the decision to freeze indexation, Briggs said he would leave it to the treasurer to outline the strategy.
“Of course the incomes are far higher than what they were in 2001 also … they’ve grown in real terms, substantially too,” Briggs said. “The point here is what we have in the budget is a strategy to ensure that we live within our means, that we are addressing the structural problems, in the short term and the long term – but we’ve got a growth package to build a stronger Australia, to have the infrastructure required so we can achieve the growth targets.”“Of course the incomes are far higher than what they were in 2001 also … they’ve grown in real terms, substantially too,” Briggs said. “The point here is what we have in the budget is a strategy to ensure that we live within our means, that we are addressing the structural problems, in the short term and the long term – but we’ve got a growth package to build a stronger Australia, to have the infrastructure required so we can achieve the growth targets.”