Green light for petrol price hikes

Petrol Price Hikes

AUSTRALIANS will soon pay more to top up the tank – and the government’s cash reserves are poised to grow fatter – after the federal opposition said today it would throw its support behind twice-a-year hikes to fuel prices.

The Coalition Government and Labor today announced they had struck a deal to green-light the fuel excise, which already taps motorists on the shoulder for an extra 38 cents a litre on top of 10 percent GST every time they make a fuel stop, to raise more than $1.8 billion a year over the next five years, jumping to $23 billion over the next decade.

Hockey WEB

Of that $1.8 billion-plus a year, the coalition has only committed to setting aside the excise increases – amounting to only about $21 million a year – to fixing the nation’s roads.

It has also committed to spending $550 million a year for the next two years for the Roads to Recovery program that gives financial help to state, territory and local governments to repair road systems.

"While the impact on individual households is modest, this measure will provide a predictable and growing source of revenue, which will help the government boost its investment in job creating and productivity enhancing road infrastructure," a statement from Treasurer Joe Hockey said.

“While the impact on individual households is modest, this measure will provide a predictable and growing source of revenue, which will help the government boost its investment in job creating and productivity enhancing road infrastructure.”

However, the Australian Automobile Association, which represents the interests of motoring clubs around Australia, said the planned excise hikes failed to provide motorists with “a fair and acceptable link between the enormous amount of taxes they pay and the return they get in road funding commitments”.

“Australian motorists currently pay more than $15 billion in fuel excise every year and over the past two decades, less than half of this money has been committed to transport funding.” AAA chief executive Michael Bradley said in a statement.

“Thanks to today’s deal, Australian motorists will now pay an extra $23 billion in tax throughout the next 10 years, and there will still be no adequate or meaningful link between this enormous tax contribution and future funding commitments to transport infrastructure.”

According to the government, the hike in excise is likely to add an extra 40 cents to the weekly fuel bill of a motorist topping up with 50 litres.

The excise will be adjusted to the consumer price index, currently running at about 1.2 percent, in February and August each year.

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