Question time, Thursday February 8, 2024
Senator BABET (Victoria—United Australia Party Whip) (14:46): My question is for the Minister representing the Treasurer, Minister Gallagher. Minister, around a third of the price of our fuel is tax. There is a fuel excise of 49.6c per litre and, on top of this, 17.9c per litre in GST. That GST is also charged on the fuel excise, and that essentially is a tax on a tax, so to speak. Is it fair that hardworking Australians are being slugged with what is really a double tax when they go to the fuel bowser?
Senator GALLAGHER (Australian Capital Territory—Minister for the Public Service, Minister for Finance,
Minister for Women, Manager of Government Business in the Senate and Vice-President of the Executive Council) (14:46): I know there are a lot of opinions about what is fair and what is unfair when it comes to tax arrangements, but the fuel excise arrangements have been a longstanding line of revenue that essentially goes to fund states’ and territories’ road infrastructure. You can look through the tax arrangements across government to see where revenue raised then goes on to deliver services and infrastructure. So that is an important reason behind the fuel excise. Under those arrangements, there are standard indexation arrangements that are applied, which come into effect, but we also need to ensure that the transport infrastructure—the roads and services that are needed—can be funded.
So they’re the arrangements that are in place. We haven’t changed them. The last reduction, I think, ended in September 2022, when the former Liberal government had legislated for those arrangements to end. Whilst a lot of people come forward with ideas about where you could cut taxes or reduce revenue to government, there’s also an increasing need to provide services and make investments across government. The top five areas, of course, are: dealing with the increasing interest charges on the debt that we inherited; aged care; NDIS; defence; and health. Those are very fast-growing areas of government, and governments need to collect revenue to fund those. If we don’t collect it then you have to start cutting back on those services, and I can’t see, in any of those five areas, opportunities to cut investments.
The PRESIDENT: Senator Babet, first supplementary?
Senator BABET: Thank you, Minister. Of the funds generated by the fuel excise, obviously some goes into general revenue. We all know that one. But what percentage of these funds goes towards road infrastructure specifically?
Senator GALLAGHER (14:49): I’ll come back if there’s more information that I can provide, but over $1 billion was credited in the 2021-22 year for the Fuel Indexation (Road Funding) Special Account for payments to states and territories. Then, of course, we fund other infrastructure arrangements with states and territories, including road infrastructure, through other investments through the infrastructure portfolio as well. But that is the standard arrangement. Everyone realises that revenue going into consolidated revenue goes to fund all of those other areas that the federal government is responsible for, whether it be defence, immigration, home affairs, cybersecurity, aged care, health, environment—there’s no shortage of areas where there’s vying competition for funds out of consolidated revenue. (Time expired)
The PRESIDENT: Senator Babet, a second supplementary?
Senator BABET: Obviously you’re pursuing a net zero agenda, and your government sees electric cars as a key component of that transition. But, with more and more EVs on our roads, is it fair that these EV owners do not pay any fuel tax or equivalent tax? What is the government going to do to ensure that EV owners pay their fair share for all those services that you’ve just talked about?
Senator GALLAGHER (14:50): I understand some state treasurers have been keen to discuss matters around that with the federal government, and I’m sure those discussions will continue. But we are pursuing net zero, and we’re pursuing net zero not only for the improvements that it will bring for future generations but also to seize the economic opportunities that come with that transformation that’s happening around the world. As much as many people in this chamber would like to put their head in the sand over it, it’s happening. It’s happening in global markets, it’s happening in the money markets—it’s happening across the board. We think Australia should be a part of that. We should be ready to seize the economic opportunities that come with that transformation, whether it be in jobs, exports or, certainly for future generations, the improvement in energy and reliability.
