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Labor Offers Federal Govt A Deal To Back New Fuel Excise Hike

Labor has backed down on its opposition to the Federal Government’s plan to reintroduce indexation of the fuel excise, offering the government a deal today. Previously, the bill was expected to pass through the Federal Senate after the Greens fla


Labor has backed down on its opposition to the Federal Government’s plan to reintroduce indexation of the fuel excise, offering the government a deal today.

Previously, the bill was expected to pass through the Federal Senate after the Greens flagged their support, but was left in limbo following a Greens backflip.

The Federal Government then bypassed the Senate to introduce the excise hike anyway, giving itself a 10-month window to get the legislation through the upper house.

Failure to do so would have resulted in around $3 billion in collected revenue being passed back to the oil companies, as it’s the oil companies who are called upon to pay the additional tax.

In reality, as the oil companies pass the cost of the additional excise on to motorists through higher fuel prices, if the Bill stalls in the Senate, and the additional excise collected is rebated, Australian drivers will find themselves having made a $3 billion ‘donation’ to the oil companies.

The Federal Government’s gamble that Labor or the minor parties would fear a public backlash has paid off, with Labor now offering something of an olive branch to the Coalition in the knowledge that the deadline to pass the legislation is fast approaching.

The only catch for the government is that $1.1 billion of the additional revenue be directed to road projects, particularly in rural areas, over the next four years.

Excise

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