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Tuesday, 23 November 1971
Page: 3476

Mr CHARLES JONES (Newcastle) - The 5 Bills before the House at the moment basically deal with the means whereby the Government can increase the tax on diesel fuel, petrol, aviation fuel and also on tobacco and cigarettes. I want to deal with the section relating to diesel fuel, aviation fuel and petrol. The 2c a gallon increase in this year's Budget following a 3c a gallon increase last year is an impost that the motorist and the air transport system should not be called upon to pay. This Government allegedly is concerned with inflation and a serious inflationary spiral is evident in the country today. The Government is endeavouring to throw the onus completely on the wage earner and the trade unions and is calling on the employers to exercise restraint by not granting wage increases. It is also threatening to bring down legislation to penalise trade unions for taking industrial action to gain an increase in wages to try to keep pace with the inflationary spiral. Yet at the same time we have found in this Budget and in the Government's previous Budget all the ingredients for the present serious inflationary spiral.

Transport costs are recognised as comprising something like 25 per cent of the total cost structure of this country. This being such a substantial percentage of that cost structure, I just cannot understand the reasoning adopted by the Government in imposing this heavy tax in the last 2 years on the 3 types of fuel to which I have referred, namely diesel fuel, petrol and aviation fuel. It is a tax which should not be imposed on the transport system. In turn it floats right through the economy pushing up prices all the way through. It affects not only the cost of transport of goods and freight but also fares and every facet of transport.

I want to deal firstly with civil aviation. The Government announced an increase of 2c a gallon in aviation fuel in the Budget on 17th August. On 23rd August the airlines announced an increase of approximately 64 per cent in all air fares. As an example, this means that a first class air fare from Sydney to Melbourne increased from $31 to $33, an immediate increase of $2, and that an economy class fare increased from S25.60 to $27.30, an increase of $1.70. This must have an effect on every facet of the economy when increases such as this take place. How does one condemn or criticise the airlines for this increase when the Government is the one that is basically responsible for it? But the worst effect of ali is felt in the road transport industry where the increases that have been levied in the past 2 years obviously must be having a serious effect on costs.

In the application of diesel fuel tax and petrol tax there is an anomalous position. I want to draw attention to a few facts. For example, a 7-ton truck using petrol would average 7 to 8 miles a gallon. Of course there are many contingencies as to the amount of the load of the vehicle and other factors, but this is an average figure. The same sized truck using diesel fuel would average 15 to 16 miles a gallon. So in this one example the user of diesel fuel is getting a very decided and distinct advantage over the petrol user. They are both using the same road and they are both doing the same job; but one has the distinct advantage of getting almost double the mileage. In other words, the operator of the truck that is using petrol will be paying 17.3c a gallon tax and getting an average of 7 to 8 miles a gallon, and the diesel fuel user will be paying the same amount of tax but he will be getting 15 to 16 miles a gallon. I think this is an aspect which the Government should be looking at. lt should be considering whether diesel fuel tax and petrol tax should be levied at the one rate or whether the information I have just brought to the attention of the House should be taken into consideration. People in the motor industry assure me that a petrol driven motor uses approximately twice as much fuel as does a motor operating on diesel fuel. I ask the Government to look at whether the tax on diesel fuel should remain as it is. I seek leave to incorporate in Hansard 2 tables which have been prepared by the Parliamentary Library Research Service.

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