Fuel tax increase could cost drivers $3 extra with each trip to the bowser

ROB HARRIS
JUNE 24, 2015
HERALD SUN

A deal to increase the tax on petrol will cost the ­average motorist about $325 more over the next four years.
DRIVERS will fork out up to $3 extra each time they fill up — to provide $1 billion for suburban and rural roads projects.
The Abbott Government has done a deal with Labor to increase the tax paid on petrol, in a move that will cost the ­average motorist about $325 more over the next four years.
The pact means petrol tax will now rise in line with inflation twice a year, in February and August.
It had been frozen for almost 15 years.
The Government calculates a typical household using 50 ­litres of fuel a week would pay a “modest” 40c extra a week, but motoring groups predict it will be closer to $3 a tank.
The tax rise is expected to raise an extra $23 billion over 10 years.
Local councils, to benefit from $1.1 billion for roads over the next two years, said it would boost local economies and create jobs.
But the Australian Automobile Association slammed the move as unfair given the “enormous amount” of taxes motorists already paid.
“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,” said its chief executive, Michael Bradley.
In a high-risk move, the Government dodged a Senate blockade in November by using a regulation instead of a law to lift the fuel duty from 38.143 cents per litre to 38.6 cents per litre.
However, if it had not won support from either Labor, the Greens or the Senate crossbench, it would have been forced to pay back the money collected — but to the oil companies, not motorists.
Opposition Leader Bill Shorten, who previously ­described the increase as a “big tax on everything” and a “rotten idea”, said his party had faced a “difficult” choice.
“In a beauty parade, ­between giving money to the oil companies and putting money back into Australian roads, generating jobs and confidence, it is clear which way Labor has to go,” Mr Shorten said.
Australian Local Government Association president Troy Pickard said the deal was welcome after councils were hit with $925 million worth of cuts by the Federal Government’s Budget move to freeze the indexation of Financial ­Assistance Grants.
The average price of ­unleaded across Melbourne yesterday was $1.32 a litre.
rob.harris@news.com.au