A tale of budgetary misunderstandings

I said to a couple of people at my office this morning, putting the argument I posted this morning, "if the petrol prices go up because of the budget to any significant extent, that will go over like a lead balloon regardless of richer people also having a tax increase."

No, I was assured:  the only budget thing about fuel is to with the diesel fuel rebate, which would only affect miners and farmers.  There is no petrol fuel excise.

Not keeping up with such matters very closely myself, I had to double check and was able to confirm that, indeed, there is a 38c per litre petrol excise, and rumours are around that it will indeed change in the budget.  (In all likelihood, to try to make up for lost money from raising the threshold on the "deficit levy" to something well over $100,000.)

So there you go - it would seem some people have forgotten that there is a petrol excise at all, given that it hasn't changed since Howard decided not to index it back in 2001.

But this matter has raised one other issue I don't understand.

The diesel fuel rebate is argued as justified because of the principle that you shouldn't tax an input cost to a business.   But what about petrol using business and their input?

I see the other argument is that it is for diesel used for off road purposes,  and as the excise was at least nominally is to pay for road construction and maintenance for those who use roads, this is another reason to exempt heavy off road users from it. 

That has a certain logic about it, but as this detailed look at the matter that appeared in the Australian Conservation Foundation notes, it can have perverse results from an energy use point of view, such as miners deciding to use trucks to move mountains of dirt instead of conveyor belts.  Also, it seems that the money raised by road users paying excises far exceeds what the Commonwealth returns in road spending.   If that's right, it is one class of fuel users who pay what has become something like a general tax, versus another (gigantic) class of fuel users who don't.

Changes to the scheme, the article argues, are affordable by Australian mining companies. 

It seems to me that, giving the miners were able to con the Labor government into a mining tax scheme that minimised the cost to them, a re-jig of the diesel tax rebate as it applies to them that brings in a lazy billion or so should be quite do-able.