Petrol Tax Cut

[Skid_MacMarx]

Labor to review GST on petrol

Review to look at scrapping GST on petrol

Liberals having more problems with fuel policy

Government accused of "enjoying" petrol tax windfall

FURTHER ways to cut the price of petrol at the bowser are under scrutiny after the Federal Government said it would look at revenues from petrol in its planned tax review.

The tax review was announced in this month's Federal Budget, but ministers Jenny Macklin and Chris Bowen confirmed today the review also would investigate whether GST charged on top of the petrol excise should be scrapped.

The move comes amid continuing debate over high petrol prices and how much the government receives in revenue.

Ms Macklin said issues such as the tax take on petrol had not been looked at in a long time.

"That's one of the issues that we will address in this major tax inquiry that the treasurer announced," she told the Nine Network.

"(Prime Minister Kevin Rudd) has announced the detail of the inquiry that will look at the issues that you've just outlined and a wide range of other critical matters that haven't been looked at for such a long time."

The opposition's problems over leader Brendan Nelson's promised five cents a litre cut in petrol excise continued with newspaper claims that its environment spokesman Greg Hunt had written to Dr Nelson before his formal Budget reply speech rejecting the idea.

Leadership aspirant and opposition treasury spokesman Malcolm Turnbull also privately warned Dr Nelson against the policy via email before the speech.

Senior frontbencher Nick Minchin said the five-cent plan remained Liberal Party policy and Mr Hunt has never opposed the plan.

"I spoke to Greg Hunt last night (and) he assures me that is not true," Senator Minchin said.

"He supports this policy 100 per cent."

Mr Hunt later released a statement saying he produced an options paper on ways to reduce the price of petrol.

"The policy to cut the fuel excise by five cents per litre has my 100 per cent support," he said.

"That is because it will achieve what Mr Rudd promised - but failed to do.

"It will actually bring down petrol prices now and help to ease inflationary pressures."

Family First Senator Steve Fielding said the government was enjoying a $100 million petrol tax windfall because of skyrocketing petrol prices since the government was elected.

"Average Melbourne petrol prices over the six months since Labor came to power have increased from $1.33 to $1.50," he said.

"In recent years prime ministers, both Labor and coalition, have said they are concerned about the impact of high petrol prices but they cannot do anything about it.

"That is rubbish. Mr Rudd has the opportunity to show he really understands the pain people are feeling at the bowser by sharing their pain and cutting the petrol tax."

http://www.news.com.au/story/0,23599,23755002-2,00.html

[shrek]

Getting rid of the gst on petrol would be a good start.

[DrP]

The reality is that if crude prices keep jacking up the way they are (speculation, increasing shortages, restricted production etc) any tax relief from the government will be quickly swallowed up and forgotten about.

Imagine if the Libs were in power and that Nelson's cut 5 cents off policy was in force (yes yes, I know, if the Libs were in power the 5 cents off policy would never have existed). The price jumps of the past week or so would have completely swamped the 5 cents off and the consumers would still be complaining.

[Chui2]

I wonder how the States feel about reducing the GST revenue.

[swordfish805]

This is bad policy - the sort of knee-jerk reaction that made little Johnny such a bad leader. Very disappointed to see Kev doing it as well. As DrP say, it isn't going to achieve much - oil is a finite resource and we've known for decades that the price would go up when we reached the day when demand started to shift above supply.

And anything which makes petrol cheaper is bad for the environment.

It's a pity that out state leaders (NSW in particular) were so incompetent over the last 40 years to leave the average family so dependent on two cars to get around. Had they done what most other cities around the world have done, then the price of oil would still be a concern, but not bankrupting families as this mornings Sydney papers suggest.

[BribieG]

According to the 11 am news, Rudd is only going to appoint a committee that will report back at the end of NEXT year. Funny that they can introduce a tax hike on alcopops overnight but it will take 18 months to consider a tax cut.

[swordfish805]

According to the 11 am news, Rudd is only going to appoint a committee that will report back at the end of NEXT year. Funny that they can introduce a tax hike on alcopops overnight but it will take 18 months to consider a tax cut.

Maybe Rudd is such a panic merchant, then - shuffle it off to a committee is a standard politicians way of avoiding something.

And Bribes - you can always fill your car with Vodka Cruisers, most of them have an enough alchohol to run a steelworks for a week.

[RayDio]

Getting rid of the gst on petrol would be a good start.

Has Everyone forgotten that the states slap an extra tax on petrol 9c a litre

and i beleive the Victorian govenment also have a state fuel Tax.

[Skid_MacMarx]

I agree with swordfish805 to an extent here that being a finite resource, everyone should prepare for prices to continually rise from this point on . Especially if a "carbon tax" is slapped on fuel.

Further, the Government has already proposed a new tax on petrol through the carbon trading scheme. Along with electricity, transport is one of the primary emitters of carbon dioxide. And under a carbon trading scheme the Rudd Government will impose additional costs at the bowser. Modelled projections show that the cost of the carbon trading scheme on petrol prices could effectively double the GST component.

http://www.abc.net.au/news/stories/2008/05/26/2255242.htm

On the other hand, where I can understand higher taxes on alcohol and tobacco because of associated public health issues, I feel the tax is quite hefty (especially here in NSW) considering the state of our roads.

Its not just the pricing of petroleum fuel that needs to be addressed.. measures to ween us off need to be put in place.. the transition to alternatives like biofuels (eg ethanol) must become affordable.. at the moment many new vehicles are unable to utilise ethanol because it will damage the vehicle.

http://www.dtvforum.info/index.php?s=&...t&p=1066920

Hence industry and government must work together to ensure that all new vehicles can run on the new biofuels without damage.

Also, the public transport systems desparately need to be addressed .. eg The Hills Metro link should be a joint federal and state government initiative.

http://www.dtvforum.info/index.php?s=&...st&p=997765

[Thudd1503560234]

There was talk on the weekend of excise & gst being scrapped and replaced with an environmental tax, presumably similar to the U.K. where cars are taxed based on fuel efficiency and CO2 emissions (as opposed to simply renaming 'fuel excise' as 'environmental tax'). Wouldn't that upset the bogans and their slurpy V8s!

[50mxe20]

There was talk on the weekend of excise & gst being scrapped and replaced with an environmental tax, presumably similar to the U.K. where cars are taxed based on fuel efficiency and CO2 emissions (as opposed to simply renaming 'fuel excise' as 'environmental tax'). Wouldn't that upset the bogans and their slurpy V8s!

Probably not. They are all on expense accounts anyway.

[DrP]

Its not just the pricing of petroleum fuel that needs to be addressed.. measures to ween us off need to be put in place.. the transition to alternatives like biofuels (eg ethanol) must become affordable.. at the moment many new vehicles are unable to utilise ethanol because it will damage the vehicle.

Biofuels are at best a temporary stop-gap measure. There is no way in hell that biofuels can satisfy our voracious demand for oil.... unless of course you don't mind having nothing to eat because its all been poured into your car's petrol tank.

The future is not oil based, nor is it biofuel based.

[ajm1503559545]

Biofuels are at best a temporary stop-gap measure. There is no way in hell that biofuels can satisfy our voracious demand for oil.... unless of course you don't mind having nothing to eat because its all been poured into your car's petrol tank.

The future is not oil based, nor is it biofuel based.

Except that more fossil fuels are burned making and moving biofuels than the biofuels can replace.

[Skid_MacMarx]

Considering these "biofuels" have the potential to create greater amounts of greenhouse gas, I can only assume ethanol has been introduced just to decrease the amount of petroleum consumption.

For E10 (10% ethanol and 90% gasoline), the effect is small (~3%) when compared to conventional gasoline, and even smaller (1-2%) when compared to oxygenated and reformulated blends. However, for E85 (85% ethanol), the effect becomes significant. E85 will produce lower mileage than gasoline, and will require more frequent refueling. . .

. . .One rationale given for extensive ethanol production in the U.S. is its benefit to energy security, by shifting the need for some foreign-produced oil to domestically-produced energy sources. Production of ethanol requires significant energy, but current U.S. production derives most of that energy from coal, natural gas and other sources, rather than oil. Because 66% of oil consumed in the U.S. is imported, compared to a net surplus of coal and just 16% of natural gas (2006 figures), the displacement of oil-based fuels to ethanol produces a net shift from foreign to domestic U.S. energy sources.

I also agree that "ethanol" is only a "temporary stop-gap measure."

THE Productivity Commission wants the Rudd Government tourgently review the multi-million-dollar assistance for the ethanol industry amid growing warnings the program is pushing up the price of feed grain.

The commission's latest trade and assistance review estimates the commonwealth will spend $31.9 million on the ethanol production subsidy scheme this financial year and demands a review of the program as a matter of priority.

It warns that ethanol assistance is increasing feed grain prices, echoing a research paper by the Commonwealth Parliamentary Library that found diverting feedstock to mandated ethanol production would increase the trade deficit.

Domestically produced ethanol enjoys an excise advantage under the ethanol production grants scheme, a subsidy that offsets the 38.143c a litre excise on ethanol.

In 2006, the then Opposition spokesman for resources, Martin Ferguson, sought "a review of the taxation regime on ethanol to ensure its tax-free status remains in place long enough to guarantee its success in Australia's fuel market".

The Howard government set an objective in 2001 that ethanol and other biofuels would contribute at least 350 million litres to the total fuel supply by 2010.

http://www.theaustralian.news.com.au/story...05-2702,00.html

It will be interesting if the subsidy is kept in place considering the focus is now on actually reducing greenhouse gases:

Ethanol subsidy funding still under review

Posted Wed May 7, 2008 3:50pm AEST

The Federal Agriculture Minister says no decision has been made on whether to continue funding for an ethanol subsidy program.

Tony Burke has inspected an ethanol production plant at Sarina in north Queensland.

He says he can not pre-empt the outcome of a review of the scheme, but can confirm a $15 million research project into biofuels will proceed.

"But certainly ethanol's been front of mind with the conversations I've been having with a whole lot of people involved in the cane industry and I'll be feeding all that back into the process," he said.

http://www.abc.net.au/news/stories/2008/05/07/2238160.htm

[Mining Man]

Shell's E10 contains 10% Ethanol, and yet costs only 3c per litre less than regular unleaded that is well above $1.00 per litre.

Consider a litre of regular unleaded that costs $1.50. 100ml of that fuel is 15c at the bowser. 100ml of Enthanol (the 10% component in E10), inclusive of the cost of blending it with unleaded and handling and marketing it separately, is therefore 12c at the bowser.

From what I understand, the 100ml of unleaded includes taxes (GST, excise, State levies etc) while the 100ml of Ethanol doesn't (GST only?).

Either Shell is making a sh!tload more money on E10 per litre, or the cost of ethanol, and subsequent blending and handling of the E10 is near-on prohibitive. I'd like to know which taxes apply to unleaded and ethanol (I'm assuming the difference is excise and State levies), but if the difference is any more than 3c per litre for unleaded (which I bet it is), then E10 is actually more expensive.

Ethanol blended fuels are for the benefit of the consumer? Yeah, right...

[BribieG]

The recent hike in world grain prices - that flows on to everything from eggs to beef - is partly blamed on acreages taken out of food production and turned over to ethanol production; mostly from maize in the USA (subsidised farmers) and palm oil in Indonesia / Malaysia produced for biodiesel. Which is also destroying native habitat there due to clearance for farmland.

Whilst the food shortages are not solely due to ethanol production there is still some truth in the statement that before too long, a child will starve to death in Africa so that someone in the West can fill their SUV.

I still use E10 and BP's equivalent because at least in Australia the sugar industry is in dire straits with sugar currently only fetching about 14c an imperial pound and AFAIK that's where our ethanol comes from, rather than 'real' food crops.

[ajm1503559545]

Either Shell is making a sh!tload more money on E10 per litre....

And Howard pushed Ethanol because it was better for the consumer too right?!

Honestly, they must think everyone is completely stupid.

[Skid_MacMarx]

Transport Planner Backs Higher prices

ELEANOR HALL: Well no one likes paying more at the pump.

But one leading transport planner is pushing for the price of petrol to be allowed to go even higher.

Dr Paul Mees says high fuel prices are actually a blessing in disguise that could move us away from a car culture and towards one that's more environmentally sustainable.

He says the Government should be focusing not on bringing down the price of fuel but on developing alternative modes of transport.

(. . .)

JANE COWAN: How confident are you then that this actually will provide the impetus to concentrate more on public transport?

PAUL MEES: I'm hopeful but I'm not confident because there's a lot of inertia built into the system.

There are very large and powerful vested interests associated with for example, toll road construction - who will fight to keep our transport policies based around this unsustainable trend of more and more car and truck travel.

It won't be able to be about that into the future.

JANE COWAN: And the car industry knows it.

ANDREW MCKELLAR: Well we have seen an effect in the market.

JANE COWAN: Andrew McKellar is the Chief Executive of the Federal Chamber of Automotive Industries.

He says higher petrol prices are already providing new impetus for car manufacturers to invest in alternative technologies.

ANDREW MCKELLAR: Only a week or so ago we heard a senior executive from General Motors contemplating the prospect of a hybrid commodore being built in Australia.

There are advanced battery technologies, alternative fuels and ultimately things like hydrogen fuel cells.

So there are many things that car makers are looking at.

JANE COWAN: And I suppose demand from customers who simply can't afford to run fuel guzzling car is a greater motivator for car manufacturers than the ideals of climate change?

ANDREW MCKELLAR: Well at the end of the day the hip pocket is one of the most powerful forces and manufacturers are responding to that.

http://www.abc.net.au/worldtoday/content/2008/s2258062.htm

[mcduck]

$1.55.9

[swordfish805]

$1.55.9

and going higher. Many predicting $2 by year end. Will still be cheap compared to what many other countries (with notable exception of the yanks) pay.

I think it probably needs to get to $3 a litre before we see real shift away from petrol vehicles - but by then people will be screaming more about their electricity bill than the price of petrol.

[OakenShield1]

$1.55.9

162.9 here last week!

don't even get me started on Diesel!!

[Kazz]

$1.55.9

162.9 here last week!

don't even get me started on Diesel!!

Yep, I was just going to say 155.9 was about our low price point for the week.

[myrantz]

Yep, I was just going to say 155.9 was about our low price point for the week.

High fuel prices is due to the depreciating USD... Hopefully prices will stabilise to $1.30 to $1.40 soon..

Fuelwatch does keep prices lower, but not much, and esp useless once implemented at a national level.. Grrrr

The government needs to bring in more competition and improve fuel delivery efficiency if it ever hopes to keep fuel at affordable levels...

[ajm1503559545]

Anyone asking where the extra $$$ per barrel is going? I understand the supply/demand/price equation but what about cost of production? Is it getting more expensive to drag the stuff up from the ground, is there less of it being dragged up or is it there some gouging of world markets going on?

[swordfish805]

Anyone asking where the extra $$ per barrel is going? I understand the supply/demand/price equation but what about cost of production? Is it getting more expensive to drag the stuff up from the ground, is there less of it being dragged up or is it there some gouging of world markets going on?

Plenty of articles in the respected financial press - you could search ft.com for example.

With higher prices it becomes economic to start production in expensive locations (eg very deep under the sea, far north Alaska, wells with only small reserves etc). But there is also a lot of speculation going on and a lot of crude oil sitting in tankers that are lying at anchor waiting for the price to go even higher.

The long run tren is inexorably upward - and we ain't seen nuthin' yet. Remember everybody in China and India wants to live like we do here - with two cars in the driveway. That's half the world's population that might be buying a car for the first time in the next 30 years. Fancy paying $50 a litre anyone?