Diesel excise may be on chopping block in upcoming Budget

By: Jason Whittaker

Treasurer Wayne Swan’s department will not confirm whether the diesel excise will be spared by the Government’s razor gang in

Treasurer Wayne Swan’s department will not confirm whether the diesel excise will be spared by the Government’s razor gang in the upcoming federal Budget.

The Government is coming under increasing pressure from green groups to scrap the excise, with the Australian Conservation Foundation (ACF) calling it unnecessary and the Greens labelling it "perverse".

But a spokesman for the Treasurer says the industry will need to wait until the Budget is handed down on May 13 to find out whether the Government will continue the 18.51 cents per litre credit.

"We are in the process of framing a budget and we won’t be pre-empting that process," he says.

"I get dozens of phone calls every day about people asking to rule things in or rule things out or say if things are on the table or not on the table."

But as Swan, assisted by Finance Minister Lindsay Tanner, scrutinises government expenditure in order to cut costs to reduce inflationary pressures, the excise may be seen as a big money saver.

According to figures from the Australian Taxation Office, the excise cost the public purse $4.9 billion in the 2006-07 financial year.

One of the options before the Government is a carbon tax proposed by Greens transport spokeswoman Senator Christine Milne.

Milne wants the industry to pay a certain amount of money based on how much carbon is in the fuel they use.

According to a spokesman for Milne, the Greens will be stepping up their efforts in calling for a carbon tax to the Government in the weeks leading up to the Budget.

"Perverse policies that essentially encourage greater use of fossil fuels should be removed in favour of a direct price on carbon," the spokesman for Milne says.

The comments coincide with those of ACF, which referred to the excise as one of three initiatives the Government needs to scrap in the upcoming Budget in order to save money as well as reduce Australia’s carbon footprint.

"Let’s cut the perks for polluting and invest in a cleaner future today," ACF Executive director Don Henry says.

"Does anybody think the trucking industry will shut down if it has to pay full price for its fuel?"

The Australian Trucking Association (ATA), however, does not intend on allowing the green agenda to run roughshod over the industry.

"The ATA will continue to defend the fuel tax credits in these last weeks before the Budget," ATA Chief Executive Stuart St Clair says.

"We'll be doing everything we can to protect the trucking industry and working Australians from the attacks of the ACF and the green movement."

St Clair says scrapping the excise will push up running costs which will then be passd down the chain in the form of higher grocery prices.

He has dismissed as absurd the claims of the ACF and the Greens, saying they do not add anything productive to the climate change debate.

"They've become part of Australia's environmental problem, not part of the solution, because their glib nostrums distract attention from the reforms that will actually get results," he says.

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