Industry groups, green movement divided on fuel excise proposal

By: Jason Whittaker

The Rudd Government’s proposal to alter the fuel excise under an emissions trading scheme has divided industry groups and led

The Rudd Government’s proposal to alter the fuel excise under an emissions trading scheme has divided industry groups and led to claims of polluter protection by the Greens.

In its discussion paper on the Carbon Pollution Reduction Scheme, the Government flagged the idea of removing one cent from the fuel excise for every one cent rise in the price of fuel under emissions trading.

The idea behind the initiative is to allow road users time to adapt to a greener economy. It is intended to run for three years for motorists but only one year for the heavy vehicle industry.

The two-year difference has been criticised by the Australian Logistics Council (ALC) with its chief executive, Hal Morris, accusing the Government of pandering to the interests of motorists.

While supporting the proposal, Morris says the heavy vehicle industry should be granted three years or the Government will risk creating uncertainty in the supply chain.

"It is very concerning that the offset for heavy vehicles will be reviewed by government after one year, while the other users, including agriculture and forestry, will not be reviewed for up to three years," he says.

"Inconsistencies are likely to lead to uncertainty for our supply chains, in particular as it is unclear whether rail and coastal shipping’s use of fuel is to be included in this transitional scheme."

But the peak trucking body, the Australian Trucking Association (ATA), says a year is long enough for operators to adapt because they do not need three years to determine their cost structure.

"The plan will give trucking companies more time to get ready to pass on the eventual increase in the cost of fuel on to their customer, but they must start now and not wait until 2010 or 2011," ATA Chairman Trevor Martyn says.

The Green party, however, is fuming over both measures and has indicated it will move to block emissions trading legislation that includes any reductions in the fuel excise.

Greens spokeswoman on climate change Senator Christine Milne says the discussion paper has failed to take greenhouse gas emissions seriously and it will need "to be rescued" by the Greens when it enters the Senate.

"Minister [for Climate Change Penny] Wong’s green paper protects polluters and provides no signal for investment in a zero-emissions future," Milne says.

"The Government has included petrol in the scheme with one hand and effectively removed it with other."

The Rudd Government will be forced to sway Coalition senators or a combination of the Greens and the independents, Steve Fielding and Nick Xenophon, if it wants to pass legislation.

A policy paper will be released in December following the discussion phase. The Government intends on introducing emissions trading in 2010.

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