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The government’s initiative to slash the fuel tax in half, effectively reducing prices by 26.3 cents per litre, has received reluctant support from both the opposition and the crossbench. This move is expected to provide relief for drivers, saving approximately $19 on a full 65-litre tank.
Labor Senator Deborah O’Neill highlighted the significance of this reduction, emphasizing its potential impact on individuals and businesses burdened by soaring fuel costs. “It’s not just farmers or families feeling the pinch,” she remarked during a Senate session. “It’s crucial for small businesses, and those in heavy machinery sectors who are vital to constructing our nation’s infrastructure, such as housing developments and essential roads for productivity gains.”
Meanwhile, both the opposition and One Nation have asserted their contributions to the policy, with the Liberals even attempting to secure official recognition from the government for initially suggesting the tax cut. This political maneuvering underscores the competitive landscape as parties vie for acknowledgment over measures aimed at sustaining the nation’s economy and supporting its development efforts.
“It’s providers of the heavy machinery that builds this nation that’s putting all the essential infrastructure in for the housing development that we want, that’s building the roads that we need for the productivity gains that this country deserves mind to all of those things, and we need to keep the businesses afloat that are building our nation.”
Both the opposition and One Nation claimed credit for the policy, with the Liberals going as far as to try to make the government officially acknowledge that they proposed the cut first.
“This amendment makes clear that this policy originated with the Coalition, that the government delayed in acting, it failed to provide offsets, and that uncertainty remains around GST arrangements and fuel security,” Senator Clair Chandler told the Senate.
The change, along with the Greens’ attempt to include language criticising the government for supporting “President Trump and Prime Minister Netanyahu’s illegal war”, were voted down.
Independent David Pockock echoed concerns raised by a string of economists that the discount at the bowser would likely push the Reserve Bank towards raising interest rates again, costing mortgage-holders more in the long run.
But he, both parties and several other crossbenchers still supported the bill.
Energy Minister Chris Bowen said the excise cut would apply from today but would take time for the impact to be seen at the browser, particularly in regional areas with less turnover.
“The fuel in the tank at the service station might have been there for days. They have already paid the tax,” he said yesterday.
“So please, if you turn up tomorrow and the price has not gone down, they are just waiting for the new petrol with the lower tax to come in.”
He said the government had considered inflation concerns but decided prices were high and “unlikely to plummet any time soon”.
“We don’t see people racing down saying, ‘The situation’s solved and Albo’s fixed it and now we’ll buy more petrol’, because that’s not what we think, and I don’t think that’s what Australians would think,” he said.
There are concerns from some that even the sizable discount won’t be enough.
“It’ll be burnt up in a couple of weeks. It’ll have no effect at all,” Wholesale Sleeper Co director Murray Flakelar said.
Liberal Senator Andrew Bragg today backed Queensland Premier David Crisafulli’s call for the state to refine its own oil.
“The fact that we have 40 years of oil under the ground that we haven’t been able to get out because of the environmental laws is a bloody disgrace, frankly,” he said.
Bowen was cautiously open to the idea.
“I think these things should always be determined on economics and engineering, not on ideology,” he said.
“If there’s oil there that can be easily and cheaply extracted, sure, and it replaces oil imports. Great.
“But there have been many attempts to do this.”
Another suggestion is to Fast track a long-discussed road user charge for electric vehicle users to replace some of the money lost in fuel excise.
“Well everyone should be paying their fair share and EVs use the road and those roads need to be repaired,” former Nationals leader David Littleproud said.
National Automotive Leasing and Salary Packaging Association chief executive Rohan Martin said it was important such a move didn’t disrupt EV sales and Bowen said the fuel tax would apply for three months whereas EV take-up would be here for years.
The Greens said the country should invest more heavily in renewable energy to reduce reliance on foreign fossil fuels.
Things are bad now but there are warnings it could get worse next month as refineries in Asia that refine fuel for Australia are reliant on oil from the Middle East.
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