In response to the Senate’s refusal to pass the fuel excise rise and other measures from May’s Federal Budget, the government has now put the ball in the court of the minor parties with a ‘back door’ solution.
Using the same legislation as the previous Labor government when it introduced the equally unpopular ‘alcopop tax’ on pre-mixed alcoholic beverages, the Federal Government has bypassed the Senate and announced that the excise-rise will begin regardless on November 10.
The initial excise-rise, and future increases under a reintroduction of the biannual scheme in place before 2001, will then have 12 months to pass through the Senate to become legislation.
If it fails to pass through the Senate, any revenue raised from the higher excise would be returned to the oil companies that paid it - not the motorists to whom it was passed-on via higher fuel prices.
This may force the hands of the minor parties to pass the budget measure; who would themselves risk a public backlash if the predicted $2 billion in revenue is returned to oil companies.
The excise-rise was originally set to take place in August and is estimated to raise an additional $19 billion in revenue over the next decade - all of which is intended to be linked to future infrastructure projects “by law” (according to Federal Treasurer Joe Hockey).
Finance Minister Mathias Cormann told the ABC he predicts the impact on an average household to be around 40 cents per week, based on a 50-litre fuel purchase.
“This is a very important structural reform - [it] will help us put our budget on a more sustainable foundation for the future [and] it will help us build a stronger, more prosperous economy,” Mr Cormann said.
“We believe that having collected the revenue over a period of up to 12 months that even the Labor Party and the Greens will finally see sense.”
The move has been met with opposition from Labor leader Bill Shorten, who labelled the increased fuel excise “a new Tony Abbott petrol tax”.
An increase to fuel excise has also had virtually zero support from Australia’s motoring bodies - including Queensland’s RACQ, South Australia’s RAA and the NRMA in New South Wales - while Australian Automobile Association’s Andrew McKellar called it “weak, sneaky and tricky”.
“The Government has absolutely no guarantee that it would be able to get this through the Senate, and in fact I note they haven't even put the original budget measure to the Senate at this point,” Mr McKellar said.
“If it's not passed by the Senate, then I think there has to be a guarantee by the Government that it will refund any of the unnecessary tax (to motorists) that it collects over the next 12 months.”
Mr McKellar advised motorists to ‘keep their receipts’, while awaiting the outcome of any future attempt to pass the legislation through the Upper House.
MORE: Fuel Excise Increase A ‘Back-Door Carbon Tax’: AAA
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