Nationals senator John Williams said he will support the federal government’s fuel excise set to come into effect on Monday, November 10.
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The indexation adjustment will see a rise in petrol prices for households across the state, with the provision for the excise to rise twice each year according to inflation, Senator Williams explained.
"It will mean the excise will go up twice a year according to inflation," he said.
"That started in 1983 in the Hawke government when the excise was 6.3 cents per litre, it grew to 34 cents per litre by the end of the Hawke/Keating government in 1996, then it went from 34 cents to 38 cents by 2000 under the Howard government"
He said though people living in rural areas will be paying more to keep their vehicles on the road, the prospect of raising revenue to address declining roads in country areas was worth the cost.
“Every cent will go on roads; $2.2 billion over four years,” he said.
According to government estimates, average users consuming 50 litres of fuel each week can expect a 40 cent rise in weekly petrol costs.
Senator Williams said for people in rural areas, that is likely to be higher.
“If you lived out of town and you had long-distance travel, of course you would use more,” he said.
“The average is about 50 litres per week. The average quote is about 40 cents per household per week.”
Senator Williams said he will support the passage of legislation in the Senate for the benefit for regional road renewal.
“We’re not going to spend all that money on Highway 1, $2.2 billion over four years. It will have to go out to councils and to state governments for state roads.” The government will introduce the excise next month, using administrative powers to bypass the Senate.
If the tariff is defeated in 12 months, revenue will have to be returned.
“I am pretty confident now that it will pass. What a waste of money if we take it off the people who are burning fuel and we can’t spend it on roads and we have to give it back to oil companies.”
Critics of the plan say that the excise represents the government’s broken federal election promise to not introduce new taxes.
“We’re getting criticism on that, but the point is we said we would build the roads of the 21st Century and we said we would get the budget in order and this is why it is necessary to honour those promises of building the roads and getting the books in balance,” Senator Williams said.
He said there are also numerous exemptions for farmers operating machinery off public roads, miners and truck drivers, but average fuel-burning households will be paying more.
"With that current 38.1 cent excise ... that will go up to 38.6 on November 10. That means that the farmers, instead of getting 38.1 cents back they will get 38.6 cents back," he said
"It will mean the miners will be the same, they get all the fuel credits back and don’t pay the federal excise and of course they get the GST back again on the fuel which is a states tax as well, the feds collect it but give it to the states."
"So the farmers, the miners, the truckies, the local councils, all us people who are exempted from paying the federal excise will get the whole lot back as the excise goes up."
The plan has met resistance among critics, including Shadow Assistant Treasurer Andrew Leigh who dubbed the price hike "another measure that hits the poor".
Fairfax Media quoted Mr Leigh this week as saying that some form of excise would be appropriate, but not at this stage.
"If it is not an appropriate time, when is, to fix our roads?" Senator Williams said.
"We need the money, we haven’t got it in our budget, we’ve got the get the books in balance and stop borrowing, we’re up to $340 billion in debt now."
"We need the money to fix our roads and the biggest beneficiary will be country areas because most of the tax will be collected in the cities."
The Coalition froze the previous excise in 2000 under the Howard Government after it was introduced in the early 1990s. Senator Williams said the nation needs to address outdated infrastructure and balance the books.