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Fuel tax shock

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Canberra 6 June 1985

The Hawke Labor Government's preferred tax option has revealed another big shock to motorists and fuel users throughout Australia.

The application of the 12.5% broad based consumption tax to petroleum and distillate will have a devastating effect on fuel prices in this country.

It is extraordinary that the Federal Government has ignored the fact that crude oil prices are taking a tumble throughout the Western industrial world and is planning to increase the fuel prices even beyond the 10c per litre increase that has occurred in recent months.

This will destroy the competitiveness of our primary, mining and secondary industries on world markets.

It will have a devastating effect upon the agricultural industries of Australia and must be resisted with all the force and vigour that can be mustered.

Some assessments have indicated that fuel prices could rise by 6c per litre assuming that the 12.5% consumption tax would apply to the existing prices on fuel. However, with the indexation of the excise to the CPI and the compounding effect of a broad based consumption tax the final price could well be in excess of 6c per litre.

In any event the abolition of the fuel freight subsidy has already placed an additional cost burden on■fuel users in regions outside the major metropolitan regions of Australia.

Already Federal and State levies and taxes on fuel exceed $8 billion.

It is outrageous to impose yet another tax on fuel.

In any review of the taxation system Governments have a responsibility to reduce their dependence on fuel as a means of raising revenue Inquiries: (0 6 2 ) 73 22 93 /72 7419