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Government's petrol scheme opens new questions.

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Tuesday, April 11, 2000

Government’s petrol scheme opens new questions by .

The Government’s plan to introduce a grant scheme to deliver on its promise of no increase in petrol prices under a GST, opens a whole new pandora’s box, according to RACV.

The scheme will see legislation introduced to Parliament later this week. It will reduce the excise on petrol and give a grant to retailers based on their geographic location to be passed on to the consumer.

“We need to see the full contents of the legislation, but at the moment several questions need to be asked,” said RACV Government Relations Manager, David Cumming.

“For example, what is the definition of a remote and non-metropolitan location,, exactly how much will be removed from the excise and can the scheme be policed effectively?

“The Government has obviously put a lot of thought into how to live up to its commitment that GST won’t increase petrol prices. But without a freeze on the automatic indexation of petrol excise to the CPI, the price of petrol will only be stable on 1 July.

“After that, any rise in CPI will mean a compounding increase in petrol prices.”

Mr Cumming said he expected the new tax system would add five per cent to the cost of petrol by next year but looked forward to seeing the full text of the draft legislation.

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