The Productivity Commission will examine fuel excise with a view to shifting the tax base onto the carbon and energy content of fuel under an agreement to keep fuel out of the carbon price, the Australian Greens said today.
"The Greens have always said that this carbon pricing package needs to be a platform for stronger action into the future, and a detailed inquiry into Australia's fuel tax regime is a critical part of that platform," Australian Greens Deputy Leader, Senator Christine Milne, said.
"The mish-mash of policies which sees subsidies and taxes working against each other needs to be changed.
"The Greens have always said we need to drive less and drive more efficiently. The Greens have already delivered a first important step down this path by removing the incentive to drive further that was in the Fringe Benefits Tax concession. But there is much more to do.
"In particular, we should change the fuel excise regime from a simple revenue-raiser into a real driver for change, taxing more polluting fuels more and cleaner fuels less.
"This is a process that was in fact begun under John Howard, and the recent reforms for treatment of LPG are a continuation of the process.
"With real reform in this area, we can make sure there is real transparency for motorists when they consider what sort of car to buy in the future, and, importantly, a clear signal to transport authorities as to where to drive investment in public transport planning.
"Electrification of the transport fleet is coming fast and Australia must be ready for it.
"Any Productivity Commission recommendations on this matter would be delivered after three years.
"With 17% of our total emissions coming from transport, Australia needs to shift to more efficient vehicles, more public transport, cycleways and electric vehicles."