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Tuesday, 27 March 2001
Page: 25737

FRAN BAILEY (5:16 PM) —I rise to speak in support of the Excise Tariff Amendment Bill (No. 1) 2001 and the Customs Tariff Amendment Bill (No. 2) 2001. Before going into the detail, I cannot let the opportunity pass without making some comment on the previous half hour or so in which we have been listening to the shadow Treasurer. Firstly, the shadow Treasurer blamed everything but the current weather patterns on the GST—and now, after making challenges to me during his contribution, he is of course leaving the chamber. The second point is: when exactly is the shadow Treasurer going to come clean about what taxes he would be looking to increase to pay for all these proposed roll-backs? The third point is that, in the half hour that I have been listening to the shadow Treasurer—and I did him the courtesy of listening, unlike what he is now doing to me—and after months of listening to him in this place and outside and after having him send many of his minions through my electorate talking about fuel excise, we come into this place to debate this legislation and the shadow Treasurer barely mentions the words `fuel excise' and the reform that is contained within this legislation. I think that that shows him up to be exactly what he is—and I will leave it at that because I want to get on to the important point of what is contained in this legislation.

The most significant impact of this bill is that it gives effect to the government's fuel tax reform. This includes a four-pronged attack on petrol prices, which is highlighted by not only an immediate 1.5c per litre reduction in petrol excise but also the abolition of all future half-yearly indexation of the fuel excise. Other features of the plan include introducing powers for the Australian Competition and Consumer Commission to properly monitor fuel prices and, most importantly, an inquiry into the fuel excise system—something that I have long campaigned for. Motoring organisations and consumers uniformly welcomed the announcement of the reduction in fuel excise and the abolition of half-yearly indexation across Australia. The NRMA stated that the abolition of six-monthly indexation was more significant than the 1.5c per litre excise cut. The Executive Director of the Australian Automobile Association, Mr Lauchlan McIntosh, said the AAA was pleased that the government had listened to motorists' concerns. He said:

We are particularly pleased about the indexation decision ... It means motorists will no longer face six-monthly tax increases on petrol. As the Prime Minister noted, Governments will have to display greater discipline and will have to fully and openly justify any future decision to increase fuel tax.

Mr McIntosh went on to say:

While the immediate 1.5c cut in excise may not have been as much as we sought, when combined with an end to automatic tax increases and stronger powers for the ACCC to police petrol pricing, we believe it is a very good outcome for motorists and other road users.

The Australian Automobile Association and motoring clubs are also very pleased about the planned review of the fuel tax system. They observed that it presents an opportunity to reform the entire system which has been unfair to motorists for many years. The AAA noted that it looks forward to working constructively with the government on this review. Isn't it a shame that those opposite, and in particular the shadow Treasurer, could not find it within themselves to give credit where it is due?

The Prime Minister acknowledged that a mistake had been made in not understanding how much high petrol prices have been hurting people and is determined to tackle the core problems that have contributed to high petrol prices and not just respond with a quick bandaid solution, which was all that was offered by the Leader of the Opposition and, in particular, the man who will not stay in this chamber, the shadow Treasurer. Of course, those on the other side of this House would well know that it was the Hawke government in 1983 that introduced the indexation of fuel excise in line with the CPI. Over its 13 years in power, the Labor Party increased petrol excise by 35 per cent per annum. The Labor Party took the excise from 6c in 1983 to 34c a litre by the time it left office.

Excise is a very simple tax both in an administrative and an economic sense, and there is little argument that it is a relatively simple way to collect revenue. But I believe that its simplicity masks an inherent inequity, and that inequity exists because anyone living outside the densely populated metropolitan areas pays a disproportionate amount of excise simply because of where they live. They cannot walk down to the corner of their street and hop on a tram, a bus or a train; they must rely on their own motor vehicle as their primary mode of transport. The recent political stunts that the Labor Party have engaged in on the issue of fuel excise have really been the height of hypocrisy. In reality, the ALP's proposed amendments had absolutely nothing to do with the issue of the cost of petrol. It was merely another attempt to roll back the GST with no information—in fact not one shred of information—as to how or where they would raise the revenue to pay for this roll-back, just as the shadow Treasurer in this very House today failed to say, if he ever got the chance to get into government, what the taxes would be that he would increase. He failed yet again.

Another point is that this is yet another example of the Labor Party not being prepared to tackle the real issue. In fact, once again they have shown that their only response to a very serious issue is both lazy and superficial. That is in stark contrast to the steps being taken by the government so that petrol excise will no longer be tied to the CPI. We have broken the nexus that was put in place by Bob Hawke 18 years ago with the abolition of the half-yearly automatic indexation. We have broken that nexus of government automatically relying on raising additional revenue without ever having to justify why it raised the extra revenue. The government will also be making sure that the cut to fuel excise will in fact be passed on to motorists through ensuring that the ACCC is given sufficient powers and funding to monitor this reform.

I mentioned earlier the inequity of the fuel excise system. It is regressive because people on low incomes are paying a higher proportion of their income in excise. This is compounded for people who live in rural and regional areas, such as those in my electorate, where they have little choice but to use their motor vehicle because of a lack of transport. They pay a disproportionate amount of the excise simply because they use more fuel as a result of the lack of access to public transport and the distances they must travel to access the employment, education and health services that people in cities take for granted since these services are virtually at their doorstep.

It was because of this inequity that I sponsored the Victorian Automobile Chamber of Commerce petrol taxes petition in November last year. A total of 58,843 signatures were collected over a short 10-day period, demonstrating how strongly the public felt about petrol taxes and the need to provide relief by cutting the fuel excise indexation. The disadvantage experienced by motorists outside the metropolitan areas is confirmed by the most recent analysis of the Australian Bureau of Statistics which shows that my electorate has one of the highest numbers of households with two cars. That means, of course, a higher use of petrol. Surveys that I have undertaken in my electorate indicate that families in rural and outer metropolitan areas spend an average of $50 per week on petrol—and this is only for local use such as getting to work, going shopping and taking and collecting the kids from school. This amount does not include any long distance travel. The measures outlined in this bill will give that much needed relief not just to the people in my electorate but also to those in similar circumstances all around our nation.

Most importantly, the government's inquiry into the fuel excise system must explore ways to make the system fairer and to remove from people who live outside the metropolitan areas the burden of contributing a disproportionate amount to the excise collected. The action reflected in this bill reinforces this government's commitment to ensuring that people outside the metropolitan areas are not disadvantaged by high petrol prices. The cut in the excise rates and the abolition of automatic indexation complement the government's 24c diesel fuel rebate and the fuel sales grant of 1c and 2c per litre for the benefit of those in non-metropolitan and remote areas respectively where fuel prices are higher. The ALP has signalled quite clearly what it thinks of people living in these areas by opposing the 24c diesel fuel rate, and it has also stated that it will remove the fuel sales grant subsidy which has amounted to over $800 million in fuel price relief for country people. Once again, the Labor Party has demonstrated a complete lack of understanding of the needs of people in country areas. Its recent stunt of attempting to roll back the GST on fuel was exactly that—a stunt. It was an exercise designed to divert attention away from the real issue, with not one ounce of genuine concern for the needs of people like those in my electorate.

State governments must now follow the lead of the federal government and take real steps to help alleviate the fuel price burden. State governments can no longer hide behind the fact that they too receive excise as well as the GST collected from fuel sales. The state governments are receiving excise payments equivalent to 8.35c per litre of petrol. Only Queensland passes the full 8.35c back to motorists. Other states—in particular, the state of Victoria—should immediately match Queensland and provide further assistance to motorists. I have already called on the Victorian government to forgo the excise that they receive from petrol and to provide assistance to Victorian motorists. So far the response has been one of deafening silence. If Premier Bracks and the other premiers fail to do this, then one of the terms of reference for the inquiry into excise must be, I believe, that the Commonwealth ceases to collect excise on behalf of the states. The state governments cannot have it both ways: they cannot continue to receive excise collected on their behalf by the Commonwealth, as well as the GST collected on fuel sales, while of course pretending that only the Commonwealth can provide any relief.

It is clear that recent steep increases in petrol prices have been a direct result of increases in the world price of crude oil and the fall in value of the Australian dollar. Over the past 12 months and more, I have consistently called for action to be taken to provide relief. The government is now delivering on all that I have fought for plus more. Those on the other side have mounted a concerted campaign against me, and we heard examples of it yet again today here in this very chamber from the shadow Treasurer. But now that the relief is being provided—and this legislation is proof of that—they are silent, just as the shadow Treasurer did not want to debate these improvements on fuel excise. In other words, they are unable to bring themselves to acknowledge that the right action has been taken, as opposed to their stunts, which at best were nothing more than bandaid solutions that would be lucky to last five minutes. Sadly, they are incapable of giving credit when and where it is due.

I know that people in my electorate would be interested to know that, of the 28c rise in excise under the previous government, 5c was legislated for in the 1993 budget. The Leader of the Opposition, who was Minister for Finance at the time, referred to this 5c increase as a `small adjustment'. That so-called `small adjustment' of 5c extra per litre hurt an awful lot of people in my electorate, and they remember it. This government has listened to the Australian public's concerns and has initiated action to ease the burden. I am very pleased that substantive action is being taken and that this government has shown that it is responsive to the issues that impact on people. Petrol is necessary in everyday life for the people in my electorate and across the country in general. These people have for too long paid a disproportionate share of the excise take. It is now time for that to change, and this legislation marks the beginning of that change. I support the legislation and commend it to the House.