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Petrol won’t be taxed: PM

Monday, 4th July, 2011

 CANBERRA - Motorists have escaped the pain of a carbon tax but it may come at a greater cost down the road with a higher excise on petrol.

 In a major win for Labor and the country independent MPs over the Australian Greens, Prime Minister Julia Gillard yesterday confirmed that her yet-to-be-finalised carbon pricing mechanism will not apply to petrol.

 “Families, tradies, small business people do not have to worry about a petrol price increase,” she said.

 A $25-a-tonne tax on carbon would have added about six cents a litre to the cost of fuel.

 The exemption removes a key plank from the coalition’s campaign against the carbon tax, but the deal Labor garnered with the Greens in return for the minor party’s support might give the opposition ammunition to open a new front against the government.

 While the Greens have backed down on their long-standing insistence to have petrol covered by a carbon tax, they have won a concession from the government that could lead to higher fuel prices by 2015.

 The Productivity Commission will examine fuel excise with a view to shifting the tax base onto the carbon and energy content of fuel.

 Deputy Greens leader Christine Milne says her party wants to change the fuel excise system from a simple revenue-raiser into “a real driver for change”.

 That means higher taxes on more-polluting fuels, and lower taxes on cleaner fuels.

 “We want Australians to drive less, and when they do drive, to drive more efficiently,” Senator Milne told reporters in Canberra.

 She conceded the two independent MPs on the government’s multi-party climate change committee, Tony Windsor and Rob Oakeshott, had got their way in the end.

 Ms Gillard too acknowledged the role played by Mr Windsor, saying the MP had put forward “a powerful case” for country Australians who had no choice “but to jump in their cars to get places”.

 The exemption for petrol will not be a temporary measure, with the prime minister pledging it would be “out now, and out for the future”.

 Opposition Leader Tony Abbott dismissed the latest teasing-out of how a carbon pricing scheme might look as a “controlled drip of factoids from the government”.

 “Until we’ve seen the full package, we can’t really believe anything that the prime minister says,” he told reporters, adding it had to be approved by the multi-party climate change committee.

 The Australian Chamber of Commerce and Industry said exemptions for petrol and other products would simply shift the price burden of a carbon tax to other areas of the economy.

 “You simply transfer the cost of that tax in a way that becomes more burdensome for those who are not exempted,” chamber chief Peter Anderson said.

 Ms Gillard also confirmed that the 300,000 self-funded retirees holding a commonwealth health care card would get the same assistance as pensioners, under a compensation package aimed at limiting the impact of a carbon tax on households.

 Pensioners are expected to to be given an increase that equates to about $500 a year for singles and $760 for couples.

 The assistance will be delivered quarterly, but a start date for the first payment and tax cuts for other Australians is not yet clear. - AAP

 

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