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Fuel excise rises put pressure on business

The Australian Chamber of Commerce and Industry (ACCI) called on the Federal Government to exercise caution in relation to steps taken this week to impose higher fuel excise charges on road users.

Increasing fuel excise charges places greater pressure on business and is anti-growth.

Business understands the government’s challenge to balance the budget and supports many measures to cut spending and return to surplus.

However, there is very little reason to raise fuel excise, which already far outstretches spending on roads, other than to increase consolidated revenues.

It’s been estimated that only about a third of the fuel excise revenue is currently spent on roads.
ACCI’s longstanding view is that fuel excise should only be applied for road transport reasons where these taxes are hypothecated to direct investment back into roads.

The importance of minimal taxation on energy is important and is often misunderstood. Fuel is a major input cost for many businesses and fundamentally we need to avoid taxes that unnecessarily distort production decisions and limit growth.

Taxing fuel cannot be looked at in isolation from the larger question of what makes economies prosper.

Any changes to fuel excise should be subject to the approval of Parliament rather than being automatic or by a technical measure. Ideally, the broader issue of fuel taxes would wait for consideration within the government’s Tax White Paper.

The Australian Chamber of Commerce and Industry

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