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

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Trevor Collett | Jun, 23 2015 | 3 Comments

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.

Speaking today, Labor leader Bill Shorten said it was a very difficult decision.

“When Labor has a choice between giving Australian money to oil companies, or ensuring that we can have $1.1 billion worth of road construction, worth of jobs and confident stimulus, we’ll always pick Australians over oil companies,” Mr Shorten said.

“We’re making the difficult decision. Australians want less of Liberal verses Labor on every issue and the politics of negativity. What we’re showing, is that Labor is willing to show leadership.”

However the opposition has now been forced to defend its position, described by many as an admission that the party should have backed the move from the beginning.

Mr Shorten originally said Labor would not back the excise hike following the 2014/15 federal budget, declaring it an “attack on ordinary Australians”.

Motoring groups such as the NRMA have also opposed the higher tax on fuel unless all of the additional revenue is directed to road projects.

Former Greens leader Christine Milne was at the helm when the party back-flipped on its support last year, but new party leader Richard Di Natale has hinted the Greens may yet support the bill.

MORE: Fuel Prices Set To Soar As Reprieve Comes To An End - NRMA
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