NSW says no to carbon tax

LESS than a quarter of respondents to a new NRMA survey support a carbon tax and nearly two-thirds of them say they will not support a political party that proposes the tax if it results in higher fuel prices.

The NSW motoring body’s first annual Cost of Living report found that 60 per cent of the 1200 people surveyed would oppose the federal Labor government’s carbon tax if it resulted in more pain at the bowser.

The report was released on June 12, the day after the government revealed its long-awaited timetable for the introduction of strict new Euro 5 and 6 emissions standards for new vehicles sold in Australia.

It also comes as the federal government deliberates over a new national CO2 target for the new vehicle industry, as well as revised fuel standards and the introduction of excise on LPG and other alternative fuels for the first time, all of which will increase the price of motoring.

The government plans to put a price on carbon from July 2012, before establishing an emissions trading scheme within three to five years.

But the NRMA survey found 73 per cent of respondents have seen the cost of running a car increase substantially, with the average cost increasing by $620.80 a year, while some 84.5 per cent of people who used discount vouchers used them for fuel.

It also found that 18 per cent want to see reduced fuel costs, 19 per cent want to see downward pressure on interest rates and 38 per cent would like the federal government to reduce power costs.

An overwhelming 87 per cent of those surveyed said their cost of living was higher than 12 months ago, with two-thirds suffering from stress as a result.

Further, 55 per cent believe the cost of living will increase substantially over the next 12 months, while 15 per cent said they had found a second job or were working longer hours to cover increased expenses.

Respondents said they spent an extra $50 on groceries compared with last year, with 82 per cent confirming they eat out less than they did a year ago and only 24 per cent saying they support the introduction of a carbon tax.

NRMA President Wendy Machin said the organisation would seek an assurance from the government that the carbon tax would not force up the cost of fuel.

“Our members are struggling under the cost of living pressures and it is the NRMA’s responsibility to fight to ensure that every cent increase on a litre of petrol brought about by the carbon tax is offset by a reduction in the fuel excise,” she said.

“Australian families cannot withstand another hike in petrol prices and this survey shows the inherent risk of introducing an additional tax without protecting families from this rise.”

The NRMA does, however, support the introduction of excise on LPG – a move that the federal opposition’s resources spokesman Ian Macfarlane said in parliament on June 2 would lead to larger fuel bills for some family cars, plus higher bus and taxi fares.

Originally proposed by the Howard government in 2004 but now opposed by the federal coalition, the unprecedented alternative fuel excise was confirmed in treasurer Wayne Swan’s May budget and is designed to raise an extra $518 million over the next four years.

Scheduled to commence on December 1 – just months after Ford and Holden introduce new-generation LPG-powered versions of their respective homegrown large cars – the LPG excise will add 2.5 cents per litre to the cost of automotive LPG fuel every year until a peak of 12.5 cents per litre by 2015.

Treasury estimates suggest LPG bowser prices would continue to be about half that of unleaded petrol, but that more than 600,000 taxis and motorists who run cars on gas will pay 20 per cent more under the tax.

Assistant treasurer Bill Shorten said the excise would ensure all road users paid their share for better roads regardless of their fuel, but Mr Macfarlane said Australia had abundant gaseous fuel supplies and it made no sense to tax them.

“This tax on Australian families is intolerable,” he said.

The coalition is opposing three bills that would apply an excise on LPG, liquid natural gas (LNG) and compressed natural gas (CNG), but is supporting a fourth bill that extends a grants scheme, first introduced by the Howard government, for bio-fuels like ethanol.

Independent MP Andrew Wilkie said he could not support key elements of the alternative fuel excise bills because of their impact on Tasmania.

“Quite simply, this tax will have a patently disproportionate effect on Tasmania, to the extent that I am very concerned that the market in Tasmania for LPG could collapse altogether,” said Mr Wilkie.

“LPG is a cleaner fuel and for the life of me I can’t see why we’d slap a tax on it at a time the country is on the verge of introducing a price on carbon,” he said, adding that the excise would push the price of LPG so close to the price of petrol that it would no longer be a viable alternative.

Also holding a crucial crossbench vote in the lower house is Greens MP Adam Bandt, who in recent weeks said he would support the new legislation but reserved the right to move for amendments in the Senate.

“I will be supporting the alternative fuels bills currently before the house today to allow the legislation to progress,” he said in a statement.

“The Greens support reform of the excise regime that applies excise to fossil fuels while supporting cleaner alternatives like biodiesel. However, we have concerns about the impact of biofuels on the sustainability of food production.”

New England MP Tony Windsor is directly opposed to plans for an excise on ethanol and says the government must consider the benefits of LPG as a transition fuel, adding that it should not remove incentives for consumers to use more environmentally sustainable fuel alternatives.

Late last month the Australian Taxi Industry Association (ATIA) said it was alarmed at the government’s attempt to tax “clean green” LPG fuel at the same time as it imposed a carbon tax on fossil fuels.

ATIA spokesman Blair Davies said taxing LPG fuel – excise on which was slashed in the UK recently – was developed as a means to generate revenue by the former government well before the advent of a carbon tax.

“I think five or six years ago when this was being planned the economic rationalists figured this was a good place for governments to get some more income”, said Mr Davies.

“I don’t think these guys were anticipating there was going to be a carbon tax.”

Treasury estimates suggest the LPG tax will add only 19 cents to the average metropolitan taxi fare, but ATIA said fuel represented about 15 per cent of a taxi’s operating costs and the tax would add about five per cent to the cost of a cab fare.

The NSW Taxi Council claims the excise would add at least 50 cents to the cost of an average 7km taxi journey.

“Our fares are regulated by the government,” Taxi Council chief executive Peter Ramshaw said. “There is no question that they (fares) will go up – it will be passed on.”

The Australian LPG industry called for a halt to any LPG excise until LPG-fuelled vehicles accounted for 10 per cent of new light vehicle sales.

Last year just 288 private individuals bought LPG-fuelled passenger vehicles in Australia, compared with 4669 non-private purchasers – down more than 20 per cent on 2009 figures.

The take-up of LPG passenger cars has slumped further this year as Ford Australia prepares to launch its new Falcon EcoLPi next month, with LPG passenger cars attracting 91.2 per cent fewer private buyers and 75.9 per cent fewer non-private buyers to the end of May.