Budget Review Highlights Need for Fuel Price Relief
In light of the mid-year budget review which shows a budget surplus of $4.3 billion, the Australian Automobile Association has renewed calls on the Government to provide relief for families from higher petrol price.
The Executive Director of the AAA, Lauchlan McIntosh, said the projected surplus had to be seen as very conservative, in light of the fact that GST revenue from small and medium businesses was not included, and the Petroleum Resources Rent Tax was understated by several hundred million dollars.
Mr. McIntosh said the review showed a drop in fuel consumption in the September quarter which, in part, was the result of higher fuel prices. "What is disturbing is that the Government is attempting to use lower full consumption figures to justify its refusal to provide relief to motorists through a fuel excise freeze," Mr. McIntosh said.
"In case the Treasurer missed it, the September quarter included the Olympic Games when hundreds of thousands of Australians left their cars in the garage for three weeks and relied on public transport. The remainder of the fall is because people are being forced to reduce their driving. This is a clear indication of just how seriously high petrol prices are impacting on family budgets and how urgent it is for the Government to provide relief.
"It also raises questions about how the tourist industry will fare over Christmas when many people may be forced to review their holiday plans because of higher petrol prices.
"The review also shows the Government expects to collect a windfall of $480 million from the Petroleum Resources Rent Tax when, in fact, independent modelling shows the windfall will be closer to double that figure.
"The modelling, by ACIL Consulting, shows that the Treasury estimate is based on a dramatic fall in world oil prices and a substantial recovery of the Australian dollar over the next seven months.
"Oil has averaged over US$30 per barrel so far this financial year and the dollar around $0.52 cents. For the Petroleum Resource Rent Tax to meet the mid-year review forecast, oil would have to drop to around $20 per barrel and the dollar jump to around $0.60 cents immediately, and both stay there for the rest of the year.
"The review clearly shows that the Government can afford to keep its promise to motorists that petrol prices would not rise as a result of the GST introduction," Mr. McIntosh said.