“There wasn’t one group missed,” a
triumphant Grahame Morris declared on Sky News last night when asked
about the largesse the Howard Government dished out yesterday on the
back of record tax revenue.
However, the PM’s former chief of
staff must have missed the continued bleatings of Family First senator
Steve Fielding, who has been banging the drum for weeks about the
government’s failure to cut fuel excise. Besides a continued failure to
invest in education, failure to provide relief for struggling motorists
was the biggest gap in the budget.
Peter Costello produced the normal defence on The 7.30 Report
when he stressed that federal petrol excise is fixed at 38c-a-litre no
matter what people pay at the bowser. Indeed, petrol receipts are only
forecast to rise from $7.28 billion this financial year to $7.31
billion in 2006-07.
However, a continuing huge oil windfall is
coming Canberra’s way from the Petroleum Resource Rent Tax, which is
levied at 40% of profits from all offshore oil and gas fields,
excluding the North West Shelf.
The PRRT only generated $791 million in 1995-96 and $1.46 billion in 2004-05, but this is budgeted
to soar to $2.5 billion next year and $4 billion by 2010. Therefore,
over 15 years PRRT will go from barely 10% of petrol excise revenue to
more than 50%.
With a projected surplus of more than $10 billion
in 2006-07, even after $6 billion in personal income tax cuts, there’s
plenty of wiggle room for further relief in next year’s pre-election
budget. Don’t be at all surprised if that includes a 3c-a-litre cut in
fuel excise to 35c-a-litre, costing the government only $1 billion a
year in revenue because that would be less than the PRRT windfall
coming from record high oil prices.