May 9, 2014

Ignore rentseekers, the petrol excise should be indexed

The government has made a good call in unfreezing the indexation of the fuel excise, and future treasurers will be grateful. But the decision will herald recurrent political problems for Joe Hockey.

Bernard Keane — Politics editor

Bernard Keane

Politics editor

If indeed the government has decided to restore fuel excise indexation, it’s a gutsy and correct policy decision for which it deserves credit.


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26 thoughts on “Ignore rentseekers, the petrol excise should be indexed

  1. Hunt Ian

    Spot on Bernard, even if the NRMA is not a “rent seeker”. Indexing the excise for inflation ensures that it does not decline in real terms and the environment calls for that, as does the cost of maintaining roads, as you say. I doubt that the Greens will try to block this, though Labor will, if only because it is a gift that will keep giving.

    Nevertheless, Western Sydney is in a bad position and a lack of public transport, to which Abbott is ideologically opposed, is part of it. Perhaps a Western Sydney rail loop, which Vienna has will help out if only the public gives this mob the toss next election. That will be a real gift that keeps giving!

  2. Honest Johnny

    Kind of like a ‘Claytons’ GST. Broad-based and user pays. Howard should never have frozen it. Bernard is right. It will also be a de-facto carbon tax, indeed will have a bigger impact on the price of petrol than the carbon tax ever did.

  3. Emoticom

    Petrol prices vary from week to week by up to 20 cents and we drivers just swallow hard and pay the pump price. It escapes me why we would get outraged by an extra couple of cents per litre going to the government to provide infrastrucure or to pay down the national debt. It is also a subtle form of carbon pricing.

    Even with indexation of the petrol tax, our petrol prices will remain low by world standards. Of course, the fuel rebates given to big industry should also be adjusted down to zero over the next five years as well.

  4. Dez Paul

    It may be a gutsy decision, viewed from a stand alone perspective, but it still comes from a pissweak, lazy, visionless administration, wracked by contradiction and confused purpose. The Coalition has not made any progress since Howard blamed Labor for the Budget woes of 1996. And don’t mention to them it’s a de-facto carbon tax or they’ll not proceed with it.

  5. klewso

    Some Kismet to Honest John-Cosjello’s economic legacy?

  6. Richo T

    Interesting that Bill Shorten has been far nuanced in his response to the fuel excise announcement compared to the deficit ‘levy’. I would say based on that, they will let it go through while still attacking the decision

    Out of interest, what is the likelihood of Labor and the Greens blocking budget measures in the Senate? It seems all the measures the Coalition are proposing involve tinkering with existing taxes/spending programs? Would blocking the measures be in effect blocking supply?

  7. Yclept

    And it will hit those at the bottom of the ladder the hardest. But that seems to be an Abbott/Hockey given.

  8. zut alors

    How fortunate we are that it’s only an excise – not a tax.

  9. Electric Lardyland

    So, essentially it’s a probably permanent carbon tax, that will go into the construction of more roads, which should increase the amount of people driving and the amount of carbon emissions.

  10. bushby jane

    I love the carbon tax comparison-hope the useless Labor opposition pick it up. However, it seems like yet another Abbott attach on the GP rather than the other fuel move they could have made raising heaps more, that of getting rid of the tax deduction on diesel fuel excise for miners and farmers. (Have you ever met a farmer (or fisherman) who doesn’t drive a diesel vehicle?)

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