Senate debates

Wednesday, 24 June 2015


Excise Tariff Amendment (Fuel Indexation) Bill 2015, Customs Tariff Amendment (Fuel Indexation) Bill 2015, Fuel Indexation (Road Funding) Special Account Bill 2015, Fuel Indexation (Road Funding) Bill 2015; Second Reading

11:11 am

Photo of David LeyonhjelmDavid Leyonhjelm (NSW, Liberal Democratic Party) Share this | Hansard source

I rise to oppose the four fuel indexation and road funding bills before the Senate. Fuel taxes are unjustified. Taxes on goods and services should be limited to a broad based GST. That way, the government would not interfere with people's choices about what to spend their money on—everything would be taxed equally.

The only reason we have fuel taxes is that taxing fuel used to be one of the few ways governments could reliably extract revenue and, once a government starts taxing something, it finds it hard to stop. Fuel taxes are not directed to funding road construction and maintenance, and fuel tax revenue exceeds spending on road construction and maintenance. Fuel tax revenue last financial year was $19 billion, whereas total Commonwealth and state government spending on road transport was $16 billion.

We should also remember that fuel tax is not the only way that governments extract money from motorists. We face registration, licence fees, insurance taxes, and road tolls. This is not just double dipping; it is triple and quadruple dipping. Road users should certainly pay for the roads they use one way or another, but not every way.

Fuel taxes are also not a proxy for a carbon tax. Our current fuel taxes represent a carbon price of over $150 per tonne of carbon dioxide. No emissions trading scheme or carbon tax proposes the imposition of such a carbon tax, particularly when it is just on one product and not on the great bulk of products that generate greenhouse gas emissions.

More broadly, the Commonwealth government should not fund roads. There is no constitutional basis for Commonwealth involvement. And there is no policy reason for Commonwealth involvement. After all, roads are not like railway lines—we do not need to coordinate rail gauges. Commonwealth transfers to the states should be abolished, including for roads. The states can reduce their spending, for example, by means-testing access to government-run schools and hospitals. And if they do not want to do that, the states have the power to impose taxes that are less damaging than a lot of Commonwealth government taxes.

If Commonwealth transfers to the states are not abolished, they should at least not come with strings attached. The idea that public servants in Canberra have any idea about how to divvy up spending between particular roads, particular schools and particular hospitals is ridiculous.

On budget day I moved a motion calling on the Senate to express its opposition to the government's fuel tax increase. The motion passed with the support of Labor. Six weeks later, Labor has changed its mind. Labor, the coalition, and the Greens all support higher fuel taxes, provided the booty is spent to their liking. It is becoming clearer by the day to motorists, taxpayers and voters that the only true small-government, low-tax party in Australia is the Liberal Democrats.


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