This week the Federal Labor Government announced that it would cut infrastructure spending including on the Bruce Highway. The Government announced that it would reduce the proportion that the Federal Government pays for roads from 80 per cent to 50 per cent (with the remainder coming from the States).
If this cut is applied to the already underfunded Rockhampton Ring Road it will create a further $300 million funding gap for this important project. That would be in addition to the $700 million cost blowout that remains unfunded.
At the same time that Labor is slashing infrastructure funding they have been raking in more money from taxes on petrol and diesel. The tax on your fuel is now 48.8c per litre.
Since the Labor government was elected this rate has increased by over 4c, a 10 per cent rise. This financial year the government is due to take in $6.4bn extra in petrol and diesel taxes than just two years ago.
Normally these taxes have broad political support because the revenue raised notionally goes towards building new roads and maintaining old roads. Someone has to pay for roads, and it is fair that the motorists that use them help pay for them.
This implied social contract is even more important in regional Queensland. Our long distances, and lack of public transport options, mean that many of us spend more on fuel than city based people. The Government’s taking of more in fuel taxes, without returning the revenue in the form of better roads, hits regional Queensland harder.
The Labor government is abusing that support now. They are raking in billions more from the increase in fuel excise while at the same time cutting funding for roads.
If Labor is going to cut its spending on roads, then it is only fair that Aussies get a cut in fuel taxes to match. Why should Labor get to increase taxes on petrol while spending less on roads?
Since last year Labor has already cut more than $9 billion in infrastructure funding.
If the government is going to cut infrastructure spending, then it is only fair that it helps cut the cost of living for families by reducing the fuel excise rate too.
The government should match any further cuts in infrastructure funding with a reduction in taxes on petrol and diesel.
The savings for an average family from a cut in petrol taxes could make a real difference. Even if the government simply returns the infrastructure cuts it has made to date, that would fund a halving of the fuel excise rate for the next year (with some change left over).
A halving in the fuel excise rate for a year would save the average Australian family, that has at least one car, $600.
And the relief could be even higher, or extended for longer, if the government announced further cuts to infrastructure funding.
Some will argue that fuel excise is not directly linked with road funding. However, it was until 1992 and even since then there has been a strong link between funding of roads and the amount the tax has raised.
Taxes on fuel will never be popular but people will broadly accept them if they can see that the revenue is going to fund better roads.
Instead, Labor is trying to have its cake and eat it too. While people are already struggling with the cost of living it’s an indulgence that no Government should proceed with. The Government is expecting everyone else to pay for its inability to get its spending under control.
