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Tuesday, 17 February 1987
Page: 77

Senator VIGOR(4.59) —I rise to make a few remarks concerning the matter which Senator Mason talked about. The petrol excise is an exercise which raises something like 10.7 per cent of the total tax revenue. In the report the Industries Assistance Commission claims that it is 8 per cent of the total Commonwealth tax revenue. Somehow there seems to have been some mistake, as far as I can see, in calculating it against the last estimated Budget figures. Various things can flow from a petrol excise. It would be possible to use it or see it as a way of making certain that we save this scarce resource. It is also claimed in the report that road construction and maintenance was one of the major reasons for setting up this particular tax. However, when we look at the report and the figures in it we find that only 25 per cent of the petrol excise is going to road construction and maintenance.

I would like to mention a couple of other purposes for which I believe the excise measure might be used and some areas which it is in fact affecting. The excise as it is currently levied falls at approximately 70 per cent on petrol and diesel; 35 to 45 per cent on aviation fuel; 11 to 17 per cent for fuel oils, heating oils and lighting kerosene; and zero for liquefied petroleum gas, natural gas and a range of other products which are predominantly used as industrial inputs. This is a useful distribution of costs so that our industries are not severely disadvantaged by this tax. However, there are much more impressive or useful methods of raising money, and the report itself suggests a broad-based consumption tax or a value added tax as a major way of raising money. Both of these are canvassed by the IAC in the report. They are particularly recommended since they do not have the distorting effect on industry which the IAC claims the petrol excise to have.

I would like to add three other revenue raising methods which the Australian Democrats have in their policies and which would allow us to go back to a sensible pricing policy for petrol. The first is a materials added tax which would fall on the raw materials of a business. It would be based on the total turnover of the business minus all of the inputs on which a tax had already been paid and minus the cost of labour. This, I believe, would be extremely useful in getting Australia back to full employment. The petrol excise is completely neutral in terms of giving us extra employment. We should be looking at resource rental taxes and we should also be looking at taxes on moneys leaving the country, to stop all the rorts which various large companies which are operating transfer pricing arrangements and off-shore taxation havens are perpetrating on the Australian people. I believe it is extremely important to tax those organisations rather than the ordinary motorist, the person on the street. This excise is a tax on the ordinary motorist; it is a tax that hits anybody who wants to travel. There are some advantages in having the tax in that it tries to conserve a scarce resource. But we are not putting the money into developing new sources of energy. As Senator Mason said, we are not putting it into developing alcohol as a fuel; we are not putting it into solar energy; we are not putting it into alternative uses of rubbish to generate energy. I believe it is important that we should look at these options.

The DEPUTY PRESIDENT —Order! The honourable senator's time has expired.

Question resolved in the affirmative.