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Costello petrol farce continues.

Costello Petrol Farce Continues


Simon Crean - Shadow Treasurer


Media Statement - 11 April 2000


After pretending that he didn't need a mechanism to keep his promise that no petrol price will rise as a result of the GST, the Treasurer has finally announced one.


This is a clear admission that motorists outside the capital cities would have been hit by GST-induced petrol price increases under the government's original plan.


The plan is a further $500 million hit on the Budget, but characteristically, Costello hasn't said where the money's coming from.


And it's a further red tape hit on small businesses, with petrol retailers facing even more paperwork on top of the GST burden.


Whether this scheme will deliver the government's promise that no pump price will rise as a result of the GST remains to be seen. As usual, Peter Costello's announcement is long on rhetoric and short on detail. Indeed his press release states that:


• Details on entitlement to the grant scheme, including the mechanism for determining non-metropolitan and remote areas, along with the grant rates will be prescribed in the regulations to the legislation.


In other words, they haven't worked it out yet.


Questions that still have to be answered include:


• Where are the maps that show who gets the rebate and who doesn't?

• What happens if the grant payment is inadequate to cover the GST price increase?

• Will we see another 'John and Wendy-style' top-up for motorists who are still losers?

• What will be the price per litre that will be used as the benchmark?

• Will the grant be taxable?

• What will be the cost to petrol retailers of the extra paperwork?


With GST-related rebates for petrol retailers based on where they are located, it seems the Treasurer has now declared himself a convert to the "spatial economics" he rubbished in the Parliament only a few weeks ago.


Authorised by Geoff Walsh, 19 National Circuit, Barton ACT 2600.