The government has announced that the re-introduction of regular inflation adjustments to the fuel tax will commence from 10 November 2014.
This was a key revenue measure contained in the May 2014 budget.
In the face of political opposition to the measure in the Federal parliament, the government has chosen to use its power of regulation to put the first increase in place, rather than submit to the uncertainty of getting legislation through a hostile senate.
The current fuel tax was originally implemented with regular rate increases based on inflation. However the Howard government froze the automatic indexation of the rate in 2001.
Government estimates are that the effect at the retail level of the initial increase will be 40 cents on a 50 litre tank of fuel.
Key aspects of the current measures are:
- the fuel tax rate will initially increase from 38.143 cents per litre to 38.6 cents per litre
- this first increase will take effect from 10 November 2014
- the increase is to given immediate effect by way of tariff regulation, subject to approval by the Federal parliament within 12 months. (A failure to get approval will potentially require refunds to fuel wholesalers, not consumers).
- twice-yearly indexation of the fuel tax rate will commence from 1 February 2015
- the government will immediately introduce legislation to ensure that fuel tax credit recipients are not adversely affected