Thread: People Power Required

Seriously Rod, I reckon you're outta your tree mate. Those taxes are actually used to pay for things like (funnily enough) roads you know.

Quite frankly, the higher the price of fuel goes the better for our society. That way, we'll stop building low density housing estate 40kms in the city so everyone can hop in their cars and drive to work. It might also encourage people to walk or cycle to their local shops instead of getting in their V6 commodore.

I get pretty sick and tired of people complaining about higher taxes one minute and then whinging about the state of the roads.

Lets assume we reduced the fuel tax from 35% to 10% I'd like you to think about the consequenses of that tax revenue being lost. What services would need to be cut? Defense? Science? Education? Health? Transport Funding? You choose.

Where would the extra money be spent by consumers? Most likely in the generation of more household debt.

Bring it on government bashers!

Well here's a contrary view too.

I don't particularly think that taxes on fuel should be reduced. Redirected maybe, to provide better roads etc.

If fuel is a finite resource (which it appears to be) then there is nothing wrong with making it expensive.

Commuting one-up in a seven litre yoot is ok if you can afford to pay for the fuel, but of course in an 800cc duel fuel machine you will use a lot less. User choice.

There a few diesel passenger cars available at the moment which achieve 4l per 100 k's, so they are using a third of the fuel (and paying a third of the tax) of your average Aussie family sedan, and a tenth as much as the dopes driving their kids to kindy in three ton 4wd through city traffic.

So.. how about we change the attitude of the people of Oz to align it more with those in Europe, and treat personal transport as the luxury it really is rather than a right which needs more subsidy from government.

Up the taxes and use the dosh to fund proper roads, and speed camera assassination squads. The more k's you do, the more you pay towards the roads that you use.

THERE'S the basis for a petition!

Cheers,

P -(Two cars, 100,000k's per year)

To be more specific, over sixty billion dollars has been collected in fuel excise alone between 1996 and 2001. Yet according to the current government's publication "Heading in the right direction", sent to all Australian homes, only one billion, four hundred and thirty seven thousand dollars have been spent on road related issues in that period. (These figures do not include the issue of double taxing where GST is imposed not only on fuel products, but also on their excise (tax) component.)

The purpose of adding an excise on fuel, in the first place, was to establish a source of income for the Government to fund the development and maintenance of the national road infrastructure system. An extra surcharge on fuel of 1cpl in 1982 under the Australian Bicentennial Road Development Trust Fund Act was introduced to also establish a roads funding programme. However, only a total of approximately 6cpl of the excise is actually linked to road expenditure - out of (currently) over 38.14cpl collected in excise, not to mention the trust fund and GST that is added on top.

The collection of excise is not proportionally linked to the funding of road programmes and it is clear that that the revenue collected by the government does serve other purposes. In particular, spillover effects, which are not reflected in the price of fuel, should be addressed via the revenue collected through the excise on fuel.

Source: http://fueltaxinquiry.treasury.gov.a...y/VACC_239.asp

Adam, as a student of economics you would be aware of price elasticity mate....

Rod,

You don't realise how lucky we are. In Europe people pay at least double what we do here for fuel, and tax represents around 75% of the price.

Unfortunately, the Americans are not willing to impose high enough fuel taxes to curb their excessive consumption, which drives up the price of oil for the rest of the world. Americans pay only about two-thirds of what we pay for fuel, but despite their much higher incomes, they are whingeing mightily at what they are paying now.

Since the World's reserves of oil are likely to be exhausted in the next 100 years or so, it is inevitable that the cost of petrol will escalate as that time approaches, until alternative technologies, such as fuel cells running on hydrogen, become competitive.

Meanwhile, I am happy to pay taxes, if they help to control excessive consumption of fuel. We can argue about how the revenue generated is spent, but that is another issue.

Rocker

Don't believe for a minute that the government imposes the fuel excise to get people to use less. I'm sure the oil companies would love that. The fact is that no matter how expensive it gets, people will still buy it. It is price inelastic - for every increase in price, the drop off in demand is proportionally less. That's why they hit it.

The main reason I suppose is that there are few, if any, substitues. If there was a decent sustitute for pertrol, then it would become price elastic and therefore the demand would drop off if the price climbed too high. The government would then need to find something else to get the tax revenue from. And the oil companies would be very upset indeed.

Originally Posted by Rocker

and tax represents around 75% of the price.

How much tax do you reckon we pay on fuel. State and Federal combined, I think 75% would be conservative (but in the ball park).

Dan

I couldn't agree more. I can't believe how cheap we're getting our fuel here, even at $1.15 for the 'premium' stuff here in Brisbane it's still cheap as chips !

Crank the price of fuel up as high as it needs to go to balance everything else out. It will hopefully make the wealthy think twice about getting that massive V8 4WD to take the kiddies off to school each day and make the slightly 'less fortunate' think if they really need to hop in their cars to pop down the shops for that newspaper and carton of milk (which will also cost more thanks to higher fuel prices).

Unfortunately here in Brisbane our Public Transport system is fairly limited and if it was better I dare say more people would use it for their day-to-day transport needs ... but I still can't see why there are people out there who still think they need to own one or two large V8's or large 4WD's when realistically they don't need them.

Don't even bother getting me started on luxury 4WD's like the BMW X5 or the Porsche Ceyenne (or whatever that butt-ugly thing's called). What's all that about ? Grrrrr. If even one person could seriously justify the existence of those particular vehicles I'd be very surprised.

Bad news is our new Mayor is 'pro-tunnel'. Sure our roads need attention but if a large part of the total tunnel budget was spent on upgrading & improving the Public Transport system then we wouldn't need to go to these extremes ... surely. Mix that with the extra tax from higher fuel prices and that's got to be a winning combination, right ? Everyone wins.

Steve.

Just as a side note ... did you know you can very easily convert an old diesel engine to run on vegetable oil ? Did you also know that you can apparently take a brand new diesel VW Golf off the showroom floor and run it off veggie oil without causing any problems to the engine in the future ?!?!

My uncle has already converted his 1980 golf to veggie oil and has been using it for about a year now with little or no difference to performance (ie. it's chugs along but it hasn't got any worse and my father in law is about to convert his soon too. Apparently it's a very simple procedure that can be done without too much pain or effort. He wants to park it next to his brand new Prius ... hmmm Prius ... ugly, but really efficient.

This means we can runs cars from a 'more sustainable' source instead of fossil fuels. Yay. Makes the exhaust smell like a fish & chip shop tho ... seriously !!

Why would you bother, Veggie oil is about 3 times dearer than diesel.

It will hopefully make the wealthy think twice about getting that massive V8 4WD to take the kiddies off to school each day and make the slightly 'less fortunate' think if they really need to hop in their cars to pop down the shops for that newspaper and carton of milk (which will also cost more thanks to higher fuel prices).

That's the point. It doesn't!!

If you really wanted to reduce consumption of petrol, you would introduce rationing of some sort. The government has no interest in reducing fuel consumption.

Originally Posted by DanP

Why would you bother, Veggie oil is about 3 times dearer than diesel.

Cause you can actually use second hand fish-shop oil. Only downside is that the exhaust smells like calamari farts. True!!

Originally Posted by Steve

don't even bother getting me started on luxury 4WD's like the BMW X5

You probably picked the wrong mark there Steve, the diesel at least uses 2/3 of the fuel of most "family" sedans.

Originally Posted by SilentC

Don't believe for a minute that the government imposes the fuel excise to get people to use less.

No, but my point is that they should!

P

Originally Posted by SteveAndBelle

even one person could seriously justify the existence of those particular vehicles I'd be very surprised.

They need those cars so they can drive faster than everyone else. And thus feel that they are powerful and have large genitalia.

Bad news is our new Mayor is 'pro-tunnel'. Sure our roads need attention but if a large part of the total tunnel budget was spent on upgrading & improving the Public Transport system then we wouldn't need to go to these extremes ... surely. Mix that with the extra tax from higher fuel prices and that's got to be a winning combination, right ? Everyone wins.

Steve.

The whole idea of making Brisbane easier to drive around in is surely the worst idea ever voted for. I saw recently somewhere that quite a lot of Victorians were heading back to Melbourne because the public transport in Brisbane was so **** poor.
mick

Originally Posted by silentC

Adam, as a student of economics you would be aware of price elasticity mate....

Buddy, not only am I aware of elasticity, I wrote the bloody book!
See: http://dynamic.dotrs.gov.au/bte/tedb...fm?startrow=11 (I used to work at DOTARS)

The Price elasticity of petrol looks like the attached image. As you can see it is realtively inelastic in the short term. Travel behaviour is based on major decisions such as where you live and work, the car you drive etc. These can nto be changed over night. The long term elasticity however suggest that a major price hike would cause people to rethink there habits.

Granted though it's still not an overly elastic commodity.

Now to the issue of the 'government' whacking taxes on fuel to encourage less driving. Well the fedeal govt couldnt give a toss about congestion in major cities. Thats not their problem. All the Howard govt cares about (and rightly so) is the efficient movemetn of freight around the country and to our export ports.

The state governmetns have a big interest in reducing our car use. Unfortunately, given the low elasticity of fuel, and the HIGH 'upwards' elasticity of public transport, they know that they can't just whack extra taxes on fuel. So, in fairness to those arguments thats probably not why they're taxing fuel.
(By high 'upwards' elasticity I mean that public transport patronage is very elastic when fares go up. Just look at the parents of school kids complain when the fare rises by 10c. If it goes down by 50c though no one cares and patronage doesnt rise much at all.

There are so many similar examples of "if they wanted to ..."

If they wanted to stop speeding, they'd speed limit the cars.
If they wanted to stop people smoking, they'd ban cigarettes.
If they wanted to stop people driving, they'd limit your access to fuel.

Putting up the price is one way of limiting access, but as we know if you put it up high enough to actually make any difference, it is just going to drive the price of just about everything else up.

If they really wanted to reduce our use of fuel, they would physically limit our access to it. I maintain that the only reason we have such high tax on fuel is because they know they can hit us with it and people will complain but still pay.

Public transport just isn't a factor in rural areas. That's the other thing people forget about - we don't all live in cities.