Fuel price rise: Tony Abbott defends move to bypass Senate to increase petrol excise

Updated

Prime Minister Tony Abbott has defended the Government's decision to bypass the Senate and push through a fuel tax increase, saying the Coalition has a mandate to fix the budget.

The Government has been unable to get the Senate numbers to increase the excise, so is instead using a Customs tariff to achieve the same outcome without the need for a parliamentary vote.

It means the price of petrol will rise by about half-a-cent per litre from November 10. The Government says "every cent" will be spent on new roads.

Finance Minister Matthias Cormann said the move - forecast to generate more than $2 billion in net revenue over the 2014-15 forward estimates - would need to be ratified by parliament within a year.

But he warned that the extra revenue would be paid back to fuel companies, not to motorists, if MPs refused to give their assent, and challenged the Opposition and Greens to allow the measure to pass.

"We're very confident it will be validated within 12 months," Senator Cormann said.

"The question for [Opposition Leader] Bill Shorten and the question for [Greens leader] Christine Milne is whether in 12 months' time, they want the additional revenue collected through this measure to be refunded to fuel manufacturers or fuel importers, or whether they want to see this additional revenue invested in job-creating, productivity-enhancing road infrastructure."

The Greens had initially supported the measure if the money raised was spent on public transport, but in June decided not to enter into any negotiations.

On Tuesday the Greens did not make any public comment, instead releasing a statement describing the Government's move as a "sneaky trick".

But the minor party, which holds 10 Senate seats, has not said it will knock back the legislation.

"The Greens will examine the Government’s legislation when it is released in order to determine the best way forward," the statement from Senator Milne's office said.

Increase will cost average family 40 cents a week: PM

Mr Abbott told Parliament he regretted the increase but "there is no easy way to address the debt and deficit disaster that members opposite left us".

"It will cost the average family 40 cents a week," he said.

"Is that something that I'm relaxed about? No, it's not, because I appreciate that the families of Australia are doing it tough."

Opposition Leader Bill Shorten pressed the Prime Minister on what he has described as a "gutless decision to ambush motorists".

"Today he ambushes Australian motorists, he ambushes the Parliament of Australia, and through the back door he's launched a sneak attack on the wallets and the cost of living of every Australian," he said.

"The Abbott Government are going to bypass the Parliament of Australia to impose new petrol taxes on every motorist in Australia."

Senator Cormann said the increase was forecast to generate $2.2 billion of net revenue over the 2014-15 forward estimates and $19 billion over the next decade.

SA Treasurer revisits Cormann's 'girlie man' jibe

South Australian Treasurer Tom Koutsantonis accused the Government and the Finance Minister of "cowardice" over the move.

"All along they had a secret plan to impose a Customs duty on all imported petrol to bypass the Parliament. Cowardice of the highest order," he said.

"While Mathias Cormann's out there calling people economic girlie men he's afraid of the Parliament.

"[He] can't stand the scrutiny and is trying to impose extra burdens and cost of living on South Australians and indeed Australians."

Mr Abbott told Parliament "it's not a new tax, it's the indexation of an old one".

'Weak, sneaky and tricky' says AAA

The Australian Automobile Association also condemned the move.

"I think frankly it's weak, it's sneaky and it's tricky - and I've to say as well I think it's also quite a gutless move," executive director Andrew McKellar said.

"The Government has not even put its original budget measure to the Senate at this stage, so the original budget proposal hasn't even been tested."

"We are asking Australians to pay 40 cents a week extra now in order to help to deliver the biggest infrastructure program in Australia's history - the biggest road-building program in Australia's history," Treasurer Joe Hockey said in Question Time.

Topics: government-and-politics, tax, oil-and-gas, industry, business-economics-and-finance, australia

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