Crikey Says

May 8, 2014

Crikey says: why fuel taxes must go higher

Fuel excise hike? Reversing a dumb policy decision. Plus what the economic tea leaves said this week. The cuts at Fairfax: on the picket line, the importance of photojournalism, and Fairfax's finances. Why there's only losers from the new NBN. Helen Razer on Monica Lewinsky's new-found life lessons. And what's happened to the Prime Minister's Literary Awards?

Two case studies in how public policy works. First, the influence of the media on John Howard’s decision to freeze the fuel excise, via Malcolm Farr at this week:

“I’d like to apologise in advance should a deficit tax be levied in next Tuesday’s Budget. It’s partly my fault.

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6 thoughts on “Crikey says: why fuel taxes must go higher

  1. zut alors

    What delicious irony that governments can’t resist implementing populist policy however all governments eventually, & inevitably, end up not being popular.

  2. David Hand

    This also highlights the flaw in all the table thumping going on about the taxpayer subsidising miners through a tax rebate on diesel. The fuel excise was supposedly charged to fund roads and the miners don’t use their fuel on public roads.

  3. David Penington

    Since the GST was introduced, the price of fuel has roughly doubled, doubling the GST on fuel. That is effective CPI indexation of a tax on fuel. Charging GST on fuel plus an indexed excise could reasonably be perceived as double dipping on the price increases and exacerbating inflation. Since Howard was very sensitive to the fuel cost impact of the GST (with an initial over-compensating reduction in excise) it was consistent of him to stop the indexation.
    It was also dishonest of him to commit the government and its ($67m from memory) advertising resources to a GST policy within 2 years of promising that it would never ever be Liberal Party policy, but that’s a different issue from a different period of nasty, mean, tricky and out-of-touch L-NP coalition government.

  4. Tyger Tyger

    The Australian mining industry receives $4.5 billion a year in direct government subsidies. We let the local car industry die to save a fraction of that. What’s wrong, since Sloppy Joe and Toliar insist “we all have to share the lifting”, with having a debate about that?

  5. David Hand

    Hey Tyger,
    How is this subsidy paid and what’s it for?

  6. James Duff

    The issue is that the more transport costs rise, the greater the barrier to work to those who don’t live close to city centres. There is a suggestion that people without jobs be forced to move to areas of higher employment, but those places also have a higher cost of living, and a higher barrier to entry. The most wealthy have the lowest transport costs both in money and time for their daily commute, while the lower income earners spend more in transport costs.

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