John Howard (Bennelong, Liberal Party, Prime Minister) Share this | Hansard source

I thank the member for La Trobe for his very important question. It is a very relevant question in the light of an article that appeared on the front page of the Melbourne Herald Sun today, apparently based on a claim made by the member for Wills, which in turn was in part informed by some research carried out by the Parliamentary Library. In essence, what was claimed in the article was that, since the introduction of the GST, some $10 billion in GST revenue has been collected yet only about $4.6 billion has been forgone in excise; whereas the government claimed in 2001 that, when introducing the GST, it would adjust the excise so as to ensure that there was no additional revenue collected.

The claim being made is false. It is false because, in the calculations that have been made, no allowance has been made for the two discretionary reductions in fuel excise that were made in 2000 and 2001. There was a reduction in excise of 6.7c per litre on the introduction of the GST and there was a further reduction of 1.5c in March 2001, which produces a combined reduction of 8.2c a litre. In addition to that, the abolition of fuel excise indexation in March 2001 has resulted in cumulative savings in relation to excise of something in the order of $1.4 billion.

So when you carry all of that together, when you allow for the two discretionary reductions and the removal of the excise, you have a situation where the excise forgone is about $11.5 billion. The estimate in the Herald article of GST is $10 billion. So, on the basis of that, there has been no overcollection, and in fact the government has kept faith with its commitment that the introduction of the GST would not result in an increase in the overall tax collected on petrol.

I end my answer by making, in any event, the observation that if people, including the member for Wills, believe that too much GST is being collected from petrol, they might like to drop down to Treasury Place—not the Commonwealth end of Treasury Place but the Victorian government end of Treasury Place—and have a word with Mr Bracks about coughing up some of that $1.5 billion extra that the states appear to have got.

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