The Labor Party has belatedly decided to support a reintroduction of indexation of petrol excise introduced by regulation by the Abbott Government last year. This means fuel prices will rise in line with inflation in February and August each year.
The measure is expected to raise $3.6 billion by the end of the 2018/19 financial year, and the money raised will be used to fund spending on roads. Labor had previously rejected the bill, saying that the party would not be blackmailed into supporting the price hike, as it was a new tax thus a broken promise from a Prime Minister who had said during the election campaign that there would be no new taxes under an Abbott Government. But when push has come to shove, and the alternative was to return to the oil companies the revenue thus far raised, Mr. Shorten stated that Labor would prefer to see this contribution go towards the long-term health of the federal budget.
Mr. Abbott has previously stated that the increases will cost the average household about 40 cents per week. This was disputed by the Australian Automobile Association (AAA), which suggested this government’s estimate was far too low. But an ABC Factcheck suggests the AAA has exaggerated its claims.
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It’s difficult to keep up with who stands for what in national politics at the moment.
Yesterday the Greens supporting legislation which means a quarter of a million Australians will have their pensions reduced and 90,000 will lose them altogether. Today the Labor Party has announced it will support twice yearly increases in fuel indexation, despite declaring it would hold the Abbott government to account if it tried to introduce new taxes after promising there would be none. So does it matter?
As with most things in life, it’s complicated. We do need to balance our budget. There are many, many ways of doing this and I don’t believe the now-legislated changes to the Age Pension entitlement are very fair – they should have been grandfathered to allow people more security for their retirement planning. As we’ve said all along, there are so many better ways of targeting the pension, picking on people with relatively low savings makes no sense when others are receiving ridiculously generous tax concessions on their multi-million dollar savings.
However the backflip on the fuel excise does make a degree of sense when the option was to simply hand back to the oil companies the revenue raised to date. Maybe, however, it would have been smarter for the Labor Opposition to think more deeply about this issue in the first place, rather than to appear to be belatedly acquiescing to the government’s tax increase.
What do you think? Is this bowser backflip a good move? Or is it evidence of an indecisive shadow ministry?