$1 billion Dollar Budget Windfall from Petroleum Resource Rent Tax
The Australian Automobile Association has released independent economic modelling by ACIL Consulting, which reveals that the Federal Government will gain a gross windfall of over $1 billion from the Petroleum Resource Rent Tax (PRRT) this year.
The modelling also reveals that the Commonwealth Treasury was substantially wrong with its budget forecasts for oil prices and the exchange rate.
The report shows that in calculating the PRRT collection for the year, Treasury estimated the exchange rate of the Australian dollar would average 60-cents and the world oil price would average US $20 per barrel. In fact the Australian dollar has averaged less that 53-cents and the world oil price has averaged US $32 per barrel so far this year.
The Executive Director of the Australian Automobile Association, Lauchlan McIntosh, said the windfall revealed by ACIL Consulting, destroyed government claims that it could not afford to freeze petrol excise in February.
"The ACIL modelling, which is quite conservatively based on an exchange rate of 54 cents and an oil price of US $30 per barrel, shows that the Government will collect over $2.3 billion instead of the $1.28 billion forecast in the Budget. Even after company tax, this is a net windfall to the Government of $780 million.
"The Government short-changed motorists when it introduced the GST by failing to meet its promise to 'reduce excise by an amount equivalent to the GST'. It plans to short-change motorists again in February when the indexation of petrol will include the one-off GST inflationary spike," Mr. McIntosh said.
"The combined motoring clubs of Australia have 6.4 million members who have been serious disadvantaged by the way the Federal Government has treated them. The Government needs to understand that the clubs feel very strongly that their members have not been given a fair go and they will not drop this issue.
"On behalf of Australia's road users, the AAA calls on the State Premiers and Territory Chief Ministers, to put pressure on the Commonwealth for an excise freeze when COAG meets in Canberra on Friday.
"The Commonwealth has been hiding behind a claim that it cannot afford to freeze excise. The ACIL Consulting report destroys that argument completely and gives the Premiers and Chief Ministers the necessary economic data to argue forcefully for a freeze on excise in February," Mr. McIntosh said.