Budget 2014: Greens to support petrol tax but not ‘temporary’ debt levy

Higher fuel prices look set to become a reality for Australian motorists, with the Greens party throwing its support behind the federal government’s move to increase the fuel excise on the eve of the 2014-15 budget.

However, Greens leader Christine Milne said last night her party will not support the so-called debt levy as it is only a temporary measure.

According to the Guardian, Milne has said the Greens, who will be instrumental in getting many of the government’s new policies through the Senate, will support the government’s plans to reintroduce the twice-yearly practice of indexing fuel excise in line with inflation.

As previously reported by SmartCompany, it has been 13 years since the fuel excise was indexed to inflation and in that time motorists have paid 38.1 cents per litre in fuel excise. Unfreezing the indexation is expected to add up to three cents a litre in the first year.

While Peter Strong, executive director of the Council of Small Business of Australia, previously said a higher level of fuel excise will make things harder for small business, he told SmartCompany this morning he would like to see more information from the government about how it will support the sectors that will be hit hardest, such as the transport industry.

Strong said including the policy in the budget is about “sharing the pain”, but “some sectors will bear the pain more”. “I hope that is recognised by the government and they offer business assistance to these sectors,” he said.

Strong said COSBOA would “not call it either way” in terms of supporting the measure, but said he is “concerned about how it will be managed”.

Strong is also concerned about how Coles and Woolworths will respond to the higher prices, questioning whether the supermarket giants, which already offer fuel discounts through partnerships with service stations, will “absorb the costs and use it to increase their market share”.

He expects the Australian Competition and Consumer Commission will keep a close eye on the market to stop any operators from price gouging, which “raises the issue of whether the ACCC continues to be properly funded”, said Strong.

It is less clear whether Treasurer Hockey will be able to get the debt levy through the Senate, with the government now needing the stamp of approval from Labor and other minor parties, including the Palmer United Party.

Milne said in a statement yesterday the proposed temporary increase to the highest marginal personal income tax rate was “nothing more than a ploy”.

However, Milne said the Greens would consider supporting “permanent increases in taxes on the wealthy if the Abbott government wants to get serious about progressive structural tax reform”.

“Australia needs long-term structural economic reform for the future to address challenges like climate change and growing inequality,” said Milne.

“Both those challenges highlight the need for permanent revenue streams, not phoney temporary measures. Tony Abbott’s harsh budget cuts are permanent but his so-called deficit levy is temporary,” she said.

“It looks like billionaire corporations will be completely let off the hook in this budget and in the end the cash raised from savage cuts will be handed back to the rich later on. The Prime Minister’s rhetoric on sharing the burden is a lie,” said Milne.

Despite attacking the government for breaking an election promise not to introduce any new taxes or change existing ones, the opposition has not indicated if it will support the changes to personal income tax.