The carbon policy even the Greens can’t support

Motorists are set to take a federal budget hit, with a return to fuel excise indexation now highly likely.

Tough decisions. Prime Minister Tony Abbott and Treasurer Joe Hockey sound like they will be defending some controversial Budget measures. Picture: Gary Ramage. Source: News Corp Australia

NOT only will increasing the fuel excise raise millions for the federal government, it is also one of the most effective ways to reduce emissions. So is this Tony Abbott's hidden carbon tax?

According to CSIRO figures, petrol prices would only have to increase by six cents to have the same impact as the current carbon price of $24 a tonne.

This is the same carbon price that Mr Abbott promised to abolish ahead of the last federal election.

Do you support an increase in the fuel excise? Comment below

Chief Economist Paul Graham told news.com.au that each one cent increase in the fuel excise was equivalent to a carbon price of $4 a tonne.

In fact, increasing the price of petrol was found to be the most effective way of reducing carbon emissions in the Future Fuels Forum's 2008 report.

"We did find that increasing the excise had the biggest impact in shifting behaviour, reducing fuel consumption and reducing emissions," Mr Graham said.

Other measures investigated included providing subsidies for low emission vehicles, getting rid of older vehicles or mandatory improvements to vehicle fuel efficiency.

Reducing emissions: Increasing petrol prices will help reduce carbon emissions. Source: News Limited

Yesterday there was speculation that the fuel excise could be raised by three cents, meaning it would take only two years for the increase to equal the current carbon price.

However, Treasury sources have reportedly ruled out this one-off increase, saying instead that indexation would be reintroduced.

This would result in yearly increases of about one cent per litre. At this rate it would take six years to reach the equivalent of a $24 per tonne carbon price.

Motorists, who could pay up to $72 more a year, have been spooked by the plans and motoring associations have come out heavily against it, saying that it is a broken election promise because Mr Abbott said he would not increase taxes.

Despite its potential to improve emissions, the Greens have said the government should be targeting the diesel fuel rebate that gives the mining industry billions of dollars in exemptions, instead of everyday motorists.

"Why is the government continuing to say: 'We'll allow Gina Rinehart and the like to get cheaper petrol but potentially make it more expensive for everyone else'," deputy leader Adam Bandt told ABC radio yesterday.

Treasurer Joe Hockey has reportedly ruled out cuts to the diesel fuel rebate, which will cost $2.4 billion next financial year.

Petrol prices are high enough say motorists. Source: News Corp Australia

RACQ spokesman Paul Turner said Queenslanders would be the hardest hit by increases to the fuel excise because they travelled further than people in other states.

"To hit one of the biggest consumables that families pay for each week when living costs are so high is extremely disappointing," spokesman Paul Turner told AAP.

"We're a decentralised state so we'll be hit harder because we travel further."

NRMA spokesman Peter Khoury said oil companies were already driving up their prices and they didn't need help from the government.

"Petrol is a rare commodity because we have absolutely no control over the price," Mr Khoury said.

"We are completely held at ransom and oil companies periodically put prices up."

The strength of the Australian dollar can also impact prices with a stronger dollar more likely to keep costs down.

However, the Australian Competition and Consumer Commission said that petrol price cycles, where prices steadily go down but are then followed by a steep increase, were due to decisions made by retailers and not directly related to changes in costs.

These price cycles are mostly seen in major cities like Adelaide, Brisbane, Melbourne, Perth and Sydney.

Unpopular: Motorists concerned about possible price rises. Source: News Corp Australia

The fuel excise has not contributed to price increases since 2001, when it was frozen at 38.1c/litre. Prior to that there was a twice-yearly adjustment to the excise.

The Howard government stopped increasing the excise amid controversy over the introduction of the 10 per cent goods and services tax.

However, petrol prices continued to rise — in Sydney they soared from about 89.3c/litre in 2001 to $1.59c/litre yesterday.

Unfortunately, any increase in transport costs impact low income earners the most because this usually accounts for a higher proportion of their income.

But regardless of whether they have a car, every Australian will be impacted as price increases will flow through to freight costs, driving up costs of groceries.

According to the Australian Bureau of Statistics, the cost of transporting food to shops made up to between one and six per cent of the cost of grocery items in 2005.

"Moderate increases in the price of oil might add between one and two cents to a loaf of bread," the Future Fuels Forum report noted.

On the positive side, the report also found that reducing Australia's reliance on oil could improve its terms of trade by reducing imports.

Increasing petrol prices could reduce need for oil imports into Australia. Source: News Limited

"In 2006-07, imports of crude oil and refinery products accounted for approximately 10 per cent of the value of all Australian imports," the report said.

"A second opportunity is that ... more efficient vehicles and greater use of mass transport, also reduce greenhouse gas emissions."

The Australian Automobile Association has found that if the petrol excise was tied to the consumer price index, this would raise about $339 million for the government in 2014/15.

Proceeds would climb exponentially in 2017/18 and would raise $1.6 billion. In total about $3.7 billion would be raised in the first four year.

Opposition Leader Bill Shorten is being cautious about the changes and wants to see details of the excise changes, to be released as part of the Budget on Tuesday, before commenting.

But today Opposition frontbencher Anthony Albanese said any increase in the excise would hurt working families.

"It's a regressive tax because if you live further away from where you work and you don't have public transport options ... you'll pay more and you'll pay it every week," Mr Albanese told the Nine Network.

"(It's) bigger than the carbon price on everyone's personal motor vehicle."

Government frontbencher Christopher Pyne said Labor were "arsonists" for not supporting the government's plan to scrap the carbon tax.

"They're like arsonists that set fire to their neighbour's house, then when the firefighter turns up to try to put it out they mug the firefighter as well," Mr Pyne said.

Anda sedang membaca artikel tentang

The carbon policy even the Greens can’t support

Dengan url

http://segarasa.blogspot.com/2014/05/the-carbon-policy-even-greens-canat.html

Anda boleh menyebar luaskannya atau mengcopy paste-nya

The carbon policy even the Greens can’t support

namun jangan lupa untuk meletakkan link

The carbon policy even the Greens can’t support

sebagai sumbernya