A multibillion-dollar fund for renewable energy and a review of the fuel tax regime are key concessions won by the Greens from the government in exchange for agreeing to exempt petrol from the carbon price.
With the full pollution price package to be announced within days, the Prime Minister, Julia Gillard, promised yesterday that petrol would be exempt forever. ”The design of this scheme is that petrol pricing will be out now and out for the future,” she said.
The decision dispels Tony Abbott’s repeated claim that the average motorist would face price rises of 6¢ a litre
But the exemption will apply only to cars and light vehicles used by motorists, tradespeople and small businesses and not to heavy commercial vehicles such as trucks.
The national secretary of the Transport Workers Union, Tony Sheldon, has blasted the government for being obsessed with the carbon tax, saying it risks losing more of the Labor heartland unless ”it shows signs of life in other policy areas”.
Mr Sheldon said he feared the cost pressures on the transport industry caused by the carbon price would only increase pressures on truck drivers, who were already forced to meet ”impossible deadlines” and were waiting for promised government measures to alleviate this.
Typically, if fuel were to be subject to the carbon price, it would be levied at the refinery stage with refiners paying for emissions and passing on the cost at the pump.
The government will explain this week how it intends to exempt petrol but differentiate among road users. It is believed the system will factor in the weight of vehicles.
When the Greens began negotiations with the government and rural independents they insisted petrol be subject to the carbon price but met strong resistance from Tony Windsor and Rob Oakeshott. Mr Windsor said he would not support a scheme that increased petrol costs for country people. Yesterday the Greens leader, Bob Brown, said he was disappointed at the exemption and vowed to keep advocating for taxes on fossil fuels.
It is understood the Greens have negotiated a fund to invest in renewable energy which will be paid for from the proceeds of pricing carbon and worth up to $2 billion a year.
The Greens spokeswoman on climate change, Christine Milne, also won a commitment that the Productivity Commission would review the entire fuel excise regime.
While petrol would remain exempt, Senator Milne said the Greens’ long-term aim was to overhaul the tax regime so the more polluting fuels attracted a higher excise. She envisaged renewable energy used to power electric cars as the lowest taxed transport fuel.
The Productivity Commission will report in three years and it will be up to the government to adopt any recommendations.
