The Greens hideous fuel excise hypocrisy

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ScreenHunter_04 Sep. 23 15.14

By Leith van Onselen

All opposition parties seem intent to follow Tony Abbott’s (aka “Dr No’s”) example in opposition and oppose nearly all attempts at sensible reform.

Since the release of the Federal Budget, the Australian Labor Party (ALP) has opposed the re-indexation of fuel excise, claiming that it is a broken promise by the Abbott Government, whilst slamming its effect on lower-income suburban commuters.

Today, The AFR has reported that the Greens are split over whether to support excise re-indexation, with leader Christine Milne urging her party to only support the measure if the proceeds are spent on public transport and if rebates to miners, loggers and farmers are cancelled, whereas Adam Bandt and Peter Whish-Wilson are opposing the measure altogether because it will harm lower income households.

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Needless to say, both the ALP and the Greens’ positions are curious in light of their previous strong support for emissions trading and/or a carbon tax. Fuel excise is a defacto pollution tax. Opposing an increase in fuel excise, whilst lamenting climate change, is totally incoherent.

More broadly, their opposition to excise re-indexation is also silly from a budgetary perspective. There are sound reasons for the Government to raise fuel excise, including broadening the tax base away from income tax and improving overall taxation efficiency, in addition to the obvious environmental benefits. It would also go some way to closing the $5 billion Budget hole left by the Howard Government when it erroneously froze fuel excise indexation in 2001.

If the Greens end up blocking this measure, ensuring its defeat in the Senate, then they will prove once and for all that they are no better than the major parties, and prefer to play politics ahead of sensible reform.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.