Fed: PM flatly refuses fuel tax cut as prices top $1.00 a litre

AAP General News (Australia)
08-18-2000
Fed: PM flatly refuses fuel tax cut as prices top $1.00 a litre

By Stephen Spencer and Jordan Baker

CANBERRA, Aug 18 AAP - Prime Minister John Howard today flatly ruled out any cuts to
petrol taxes, despite soaring prices delivering the government a GST windfall.

Pump prices have now topped $1.00 a litre in many parts of the country for the first
time, and are set to go higher over the next week.

The rise has been caused mainly by near record world oil prices, but state premiers,
motoring organisations and the opposition also haver blamed the GST.

Queensland Premier Peter Beattie today called for the Australian Competition and Consumer
Commission (ACCC) to be wound up because of its failure to act on soaring fuel prices.

But Mr Howard rejected Mr Beattie's criticism as a cheap shot and said the price rises
were entirely beyond the government's control.

"Overwhelmingly the movements in price are driven by the world price of petrol," he
told Melbourne radio 3AW.

"I know it's easy for state premiers and motoring organisations and everybody to call
for something to be done."

Mr Howard said the only way to lower fuel prices was to either abandon the practice
of linking Australian petrol prices to world oil prices or to cut excise.

But he said cutting world parity pricing would wipe out the local oil industry while
cutting excise would be far too costly.

"Governments need revenue from somewhere," he said.

"And I don't have the luxury of saying `oh yes we'll cut excise' without having to
tell the Australian people where the money's coming from."

The government tax take from the GST on fuel rises with every increase in petrol prices.

As a result, for the first time ever, more than half the price of fuel is made up of
commonwealth taxes.

Opposition Leader Kim Beazley said the prime minister had broken his promise that the
GST would not push up the price of petrol.

"He made the promise and he has broken that undertaking and the Australian people hold
politicians who break promises accountable," Mr Beazley said.

But he also was scathing about the lack of action by the ACCC.

"If the ACCC want to do something about it, all they have to do is write Mr Howard
a letter saying `Mr Howard you broke your promise'," he said.

"And do you want to take a bet on whether or not they will do that?"

Mr Howard categorically denied the GST had anything to do with the price rise.

"Well I don't accept that," he said.

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KEYWORD: PETROL NIGHTLEAD

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