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Fightback's fuel price fraud



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21/93

25 January 1993

FIGHPBACK' S FUEL PRICE FRAUD

The Federal Opposition is perpetrating a gigantic hoax on the Australian motoring public according to Federal Land Transport Minister, Bob Brown.

"This whole exercise is a great fraud" Mr Brown said. "It requires an incredibly naive level of confidence in the fuel market to believe that the full reduction of fuel excise would automatically be reflected in the price of

fuel at the bowser."

"Cheap gimmicks involving filling petrol tanks with fuel at fake prices is of no benefit to motorists".

"The community is also coming to realise that Dr Hewson's proposals mean the neglect and disintegration of the nation's road network" Mr Brown said.

When the Victorian Government abolished the special 2c per litre levy on petrol at the start of this year, concern was expressed about whether it would be handed on to consumers.

"Of course, it was not" Mr Brown said.

"Australia has the third lowest petrol prices and the third lowest level of fuel taxes of the 24 member countries of the OECD."

"Dr Hewson and the Coalition have made a reckless and totally irresponsible promise to abolish Federal fuel excise."

"It will remove what is widely regarded as the fairest means of ensuring that road users help pay for the roads."

"The Hewson proposals will increase demands and thus wear and tear on the road system which under the Coalition's Fightback proposals already lacks the means to ensure adequate funding."

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"It represents adoption of a completely irresponsible approach to the management and conservation of our limited fossil fuels and will reduce substantially the incentive to develop alternative fuels."

"Not only will the petroleum industry gain higher profits but State Governments will replace the fuel excise with higher State fuel franchise fees."

"Although Dr Hewson claims that this would not be allowed, differential fuel prices already exist, and there is no possibility that a Federal Coalition Government could or would seek to police such a situation and Dr Hewson knows

it. States like Victoria would simply increase them anyway".

"About 25% of Federal fuel excise is directly channelled into road programs which in turn represent about half of total Federal Government roads expenditure" Mr Brown said.

The rest of the fuel excise assists other Federal programs and provides State and Local Governments with their untied grants out of which they fund their road programs."

"The transport industry, private motorists and ordinary tax payers will be left to pick up the tab in one way or another. They will be hit by a "double whammy"! The price of fuel will not fall to the extent which has been claimed but they will still have to finance road works."

"Analysis of the Fightback package by the Federal Treasury has revealed an overall revenue shortfall of at least $3.9b. This is roughly equal to the revenue which would be foregone by abolishing fuel excise and replacing it with a GST imposed only on private motorists."

Mr Brown said that the road transport industry, private motorists and ordinary tax payers should be very wary of the Coalition's fuel gimmick.

"It is a fraud" he said.

Media contact: David Anderson 2777440