Stu's Letters Book

From 17 Gwynne Corner, Jane Brook, WA, Australia, 6056 Phone: (08) 9250 1839 Mobile: 0407 481 635 Email: stuarto@upnaway.com 8/10/2005 Re Fuel Prices and Tax Whenever the discussion turns to fuel prices and tax, we are told by the Federal Government that “fuel excise” (tax) has not altered – still 38c litre. This is true, and I have no problem with that. However, what is NEVER mentioned is the enormous tax wind fall they have gained in GST! Not so long ago, when fuel was around 80+c litre, the government was taking in 8c litre (in round figures). Today, with the blow-out in fuel costs to around $1.30+ that tax becomes approx. 13c – an increase of 5c litre. If it gets to the suggested $1.70+ litre that’s an extra 9c litre! (Oh, and don’t forget – in that I guess we are paying 3.8c GST on the 38c Fuel Excise tax – tax on tax!) I may be a little thick, and certainly am no accountant, but when you add to this the added GST gained by increased commodity prices across the board due to the fuel increase, this has to equate to 10’s of millions of dollars in a GST tax that was never designed to compensate for a sudden individual commodity blow-out such has occurred with fuel. Why don’t Pollies mention this? Because, no doubt, governments are rubbing their hands in glee at receiving this huge windfall while at the same time (with halos glowing around their heads) they can point the finger at oil suppliers hoping people are gullible enough to swallow it. Oh, and don’t mention the huge increase in revenue earned from having our own oil and gas production tied to the world pricing. Kim Beasley gets on his soap box and says “he believes the best and fairest way would be to give income tax cuts”. However, income tax cuts will really only benefit those who can most afford to absorb the higher fuel cost (the more you earn the greater the benefit, as the petrol bowser cannot differentiate incomes). As with the last set of tax cuts that the Federal Government claims helped offset this fuel hike, it did NOT and does NOT help those who can least afford it – those below the tax threshold such as pensioners, self-supporting retirees on minimum fixed incomes, out-of-work people. All of whom still have to fill their tanks to get from point A to point B. No income tax cut relieves the strain on these groups. Kim needs to get “in touch” with the people he claims to champion. That goes for the current Federal Government as well. The Government can not be blamed for the oil producers’ greed and control, but nor do they have to join them. They could ease the tax problem by reducing the GST on fuel back to a level where they are still receiving the original projected tax figure. This would leave them with the same amount of tax revenue as was originally expected while giving some small relief to the millions of motorist/families on Australian roads. When, and if, oil prices drop back to “normal” (unlikely, I gather) this could be gradually reintroduced. To simple, perhaps? After all, as it stands, the higher the fuel price goes the more dollars pour into the government coffers! Stuart Oliver

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