Coalition backs down, fuel tax hike to stay

<font color=red><b>PRICE HIKES:</b></font> Opposition backs down on threat to block fuel tax increase; 0.7c/l hike to stay

By Brad Gardner | October 8, 2009

The federal Opposition has backed down from its threat to disallow an increase to the road user charge.

Despite claims from the Coalition the proposed 0.7 cent increase amounted to a "money grab", the Rudd Government will face no trouble implementing the rise.

Minister for Transport and Infrastructure Anthony Albanese announced on June 24 the charge would be lifted to 21.7 cents to account for greater road construction and maintenance costs, but the Senate had until October 26 to decide whether to accept the rise.

The office of opposition spokesman on transport Warren Truss says the Coalition’s decision to support the increase is based on the process the Government used to justify the adjustment.

The Government last year accepted amendments from the Coalition that proscribed indexation of the road user charge while also imposing a mandatory consultation process.

"Because these compromises were accepted, we will let this one [increase] go through," a spokesman for Truss says.

"We accept the principle that the heavy vehicle sector must pay its way."

The Opposition also decided against opposing the rise because industry bodies such as the Australian Trucking Association supported it.

"The industry has not gone out and protested against it," the spokesman says.

Albanese’s decision cut the fuel tax credit to 16.44 cents.

Instead of reducing the credit, National Senator John Williams says the Government should invest more of the revenue from the 38 cents a litre fuel excise into the road network.

Williams says too much of the excise is disappearing into consolidated revenue, leaving the trucking sector to foot the bill.

The 0.7 cent increase followed a 1.3 cent rise in January this year.

Outspoken Senator Barnaby Joyce also opposed the rise, accusing the Government of picking on truck drivers.

But Albanese says the trucking industry is receiving benefits in return for the increases, pointing to the Rudd Government’s $28 billion investment in the road network as an example.

The Government also implemented the $70 million Heavy Vehicle Safety and Productivity program designed to maintain current and build new rest stops, parking bays and decoupling areas.

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