A substantial cut in the fuel tax credit for miners, taking the first steps towards helping Australians get into more efficient cars and a review of the fuel excise system are key components of the MPCCC agreement to put a price on pollution announced today.
"This carbon price package delivers some important progress in getting Australia on the road to cleaner transport," Australian Greens Deputy Leader, Senator Christine Milne, said.
"While much more still needs to be done to support public transport, regional trains, high speed rail and more, and the Greens believe transport should ultimately be included in carbon pricing, the recognition today that fuel subsidies and taxes need to change marks the beginning of a new way of thinking for Australian governments."
Greening the carbon price agreement to help the transformation to cleaner transport:
• Cutting the fuel tax credit for miners (which means mining companies pay less for their fuel than everyday Australians) by 6c/L. The full 38c/L credit will remain for agriculture, fisheries, forestry and trucking;
• Requiring the Productivity Commission to review fuel excise arrangements with a view to moving to a regime based explicitly on the carbon content of fuels; and
• Consulting widely with the community on mandatory vehicle carbon dioxide standards before standards are determined and announced by the end of the year.
"The fuel tax credit, which means that mining companies haven't paid a cent of excise on their diesel for years while ordinary Australians carry the can for them, is simply unfair.
"Cutting that credit back by 6c a litre is an important step in tackling climate change - and one which will save the government $1.8 billion over the forward estimates.
"Following the reform of the Fringe Benefits Tax Concession which encouraged people to drive further, tackling these perverse fossil fuel subsidies has been a key Greens policy objective. It makes good economic sense and is consistent with Australia's G20 obligations to remove fossil fuel subsidies.
"We 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.
"Australia needs to change the objective of fuel excise from revenue-raising to more efficient resource use by taxing heavily polluting fuels more and cleaner fuels less, and the Productivity Commission will be specifically tasked with examining that prospect.
"As peak oil continues to drive petrol prices through the roof, we really need to help Australians get into more efficient - ultimately plug-in electric - cars, but the mandatory vehicle carbon dioxide emission standards that the government has been contemplating for some time would effectively lock us into business-as-usual incremental efficiency gains.
"This agreement not only commits to mandatory standards by the end of the year but also to broader consultation beyond industry before setting the standards.
"While the Greens would have loved to see transport properly included in carbon pricing, and wanted to deliver big investments in high speed rail and commuter public transport through this package, we are pleased with progress on fossil fuel subsidies, fuel excise and efficiency standards."