Ricky Muir slams petrol tax hike

Senator Ricky Muir has slammed the Federal Government's plan to raise the tax on fuel and says motorists shouldn't be underwriting the rest of the economy.

The Federal Government yesterday announced it would raise fuel excise by indexing it to inflation, adding between $10 and $16 (from a Toyota Corolla to a Ford Territory) to the price of the average yearly fuel bill.

But Senator Muir says the tax hike is a broken promise and should be reversed immediately. "Whatever happened to 'no new tax under a government I lead'?" said Senator Muir. "The Senate rejected fuel tax indexation because, I believe, it listened to the people of Australia, and the government is supposed to represent the will of the people."

Senator Muir is also concerned about how little revenue from fuel tax is funnelled back into roads. Of the $14.9 billion raised in fuel tax last financial year, just $5.4 billion was spent on roads. Of the forecast $15.2 billion in fuel tax revenue this financial year, just $4.8 billion will be spent on roads.

"Rather than introduce indexation, there should be a guarantee that a certain percentage should be spent on roads," said Senator Muir. "The motorist already pays dearly, they shouldn't have to subsidise other areas of the economy. Most of the money raised from fuel excise goes into consolidated revenue and that's not fair." The fuel tax increase is due to come into force on November 10.

If the bill is rejected later, the extra money raised could go back to the fuel suppliers. "If there is a way to stop it we will," said Senator Muir, who also warned the Abbott Government that the fuel tax issue would likely sour the already rocky relationship with the Senate.

"This is not a positive step in gaining the confidence in the Senate," he said.