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Thursday, 2 June 2011
Page: 5753


Mr WILKIE (Denison) (13:15): I have mixed feelings about the government's package of bills regarding alternative and cleaner fuels: the Taxation of Alternative Fuels Legislation Amendment Bill 2011, the Excise Tariff Amendment (Taxation of Alternative Fuels) Bill 2011, the Customs Tariff Amendment (Taxation of Alternative Fuels) Bill 2011 and the Energy Grants (Cleaner Fuels) Scheme Amendment Bill 2011. While I do regard the government's proposal regarding ethanol as wholly desirable, the move to put a 12½c per litre tax on auto LPG is deeply troubling.

Tasmania is the best place in Australia to live—as I am sure, Mr Deputy Speaker Adams, you are well aware—in part due to its isolation and small population. But this isolation and small population means we regularly pay more for basic everyday items such as groceries, electricity and fuel, even though the state's population earns less on average than people elsewhere in Australia. While shipping costs are often given as the reason for price discrepancies on our side of Bass Strait, the price hike at the Tasmanian cash register often reflects much more than the cost of transport, as is the case with LPG, where the industry is much less mature and thinner on the ground than on the mainland.

That is why I simply cannot support the proposed excise on LPG in the government's alternative and cleaner fuels package. Quite simply, this tax will have a patently disproportional effect on Tasmania, to the extent that I am very concerned that the market in Tasmania for LPG could collapse altogether.

The effect on the taxi industry in my electorate, in particular, would be catastrophic. Many of the vehicles use LPG—as they do on the mainland in the taxi industry—and the excise will surely mean that the state government, already guilty of flogging off too many taxi licences every time it needs more cash, will be pressured to approve fare increases. Moreover, taxi drivers in my electorate already work ridiculously long hours and take home a pittance—often just $5 or $6 an hour—so this excise can only make things worse for them. I simply cannot, in all conscience, come into this place and support a tax that will reduce their meagre income even more. Then of course there are the customers who are already struggling with the rising cost of living. Remember that many people who rely on taxis are elderly, disabled or infirm, and they are the last people who can afford 12½c a litre being added to their taxi's fuel bill.

Nor am I convinced that the proposed LPG excise makes sense nationally. Remember that successive federal governments have offered subsidies to encourage people to convert their vehicles to gas because LPG is an environmentally friendly, reliable and cost-effective alternative to petrol. I well understand why people who thought they were doing the right thing by the environment and their household budgets and who took advantage of the subsidies feel duped at the prospect of this tax on LPG. It is a pity that the government does not understand. Nor does the government seem to recognise that vehicles powered by LPG emit up to 13 per cent less carbon than petrol-powered vehicles. The proposed excise will add 12½c a litre to LPG and will push its price so close to petrol that it will scarcely be a viable alternative fuel.

In other words, LPG is a cleaner fuel and, for the life of me, I cannot see why we would slap a tax on it at a time when the country is on the verge of introducing a price on carbon. I trust that the government's muddled thinking on LPG does not forewarn of problems with its commendable move to put a price on carbon.

The government's proposal to put a tax on LPG makes no sense to me at all. For that reason I will not support the three separate bills to do with taxing LPG. In other words, I will not support the Taxation of Alternative Fuels Legislation Amendment Bill 2011, the Customs Tariff Amendment (Taxation of Alternative Fuels) Bill 2011 and the Excise Tariff Amendment (Taxation of Alternative Fuels) Bill 2011.

I will, however, support the Energy Grants (Cleaner Fuels) Scheme Amendment Bill 2011, because ethanol is of great value as an alternative fuel and Australia should move quickly to produce and use as much of it as possible. As long as fuel crops are not produced at the expense of food production—and in Australia they do not need to be—we should better embrace ethanol, because it is so obviously cleaner and more sustainable than petrol or diesel.

I applaud my colleagues the members for Kennedy and New England for their passionate advocacy for ethanol, and I look forward to working with my colleagues, as well as the government and/or the opposition, to ensure much greater production and take-up of ethanol over the coming years.