Multi-billion-dollar hole punched in budget as Greens confirm plans to vote against fuel excise increase

Updated June 24, 2014 19:41:41

The Greens have decided not to support the Abbott Government's bid to increase the fuel excise, effectively killing off the $2.3 billion budget measure.

Treasurer Joe Hockey announced in the May budget that the Government wanted to bring back twice-yearly indexation against the CPI for the fuel excise, with the first increase to start on August 1.

The Government said "every dollar" would go towards new roads.

Until now, the Greens had said they would support the fuel excise increase, but only if the money were to go towards improving public transport.

But the ABC has learned that the Greens have decided not to enter into any negotiations with the Government, judging that any talks would be "useless".

Greens leader Christine Milne says the Government has made it clear it is not interested in compromise.

"This is their crash and crash through policy," she said.

"They are not going to get a big hit on families who have no alternative with public transport, no alternative with fuel efficient vehicles, just a revenue raiser to build the roads that people don't want.

"The Greens won't facilitate that."

Audio: The Government's plan to reintroduce fuel excise indexation appears doomed (The World Today)

The decision has prompted Cabinet Minister Barnaby Joyce to accuse the Greens of playing politics.

"Everything about the Greens ultimately becomes a political agenda of destruction, of tearing things down," he said.

"We know the job we've got to do, if we don't turn our nation around financially, we go out the back door.

"Now I acknowledge we've lost support in some of the polls but we're trying to do the right thing.

"We're not doing it because it's fun, we're not doing it out of a morbid sense of curiosity - we're trying to turn the finances of our nation around. And the Greens they want to play a political game - what's new?"

Senator Milne concedes the issue is "a difficult one" for the Greens internally, but insists her position does not contradict the party's platform.

"We want to see people using less polluting fuels - but what we will see if we facilitate this is $45 billion going into roads," she said.

The other potential source of votes in the new Senate - the Palmer United Party - has made clear that it will not support the measure.

"It's a tax that discriminates basically against Queensland and Western Australia where there's large distances involved," PUP leader Clive Palmer told the ABC.

"As an indexation, it just means that the cost of fuel goes up ever year regardless of our economy, regardless of our environmental conditions we just pay more and more and that makes it harder for families. I think it's a bad thing."

Labor has decided to vote against the measure because it breaks the Prime Minister's election promise not to introduce new taxes.

"This is a government, of course, that don't have a mandate for this or any of the other new taxes that they're seeking to impose on the Australian public," Labor's transport spokesman Anthony Albanese told ABC News 24. 

"This is a very inequitable measure," he said.

"The people who'll be paying this proposed new tax are mums and dads out there in the suburbs travelling to and from work or taking their kids to sport on the weekend."

Labor to support FTB-B income cut

But Labor has opted to allow one budget measure that will cut family benefit payments for families with a primary income of more than $100,000.

The Government wants to drop the current income limit for FTB-B from $150,000 to save $1.2 billion over the four years of the forward estimates from July 1 2015.

The family benefit Part B payment is primarily for families with one income, including sole parents.

Labor's families spokeswoman Jenny Macklin says her party room decided this morning to support the cut, even though it is not ideal.

"It's not designed in the way that we would have done it," she said.

"We think the harsh cliff at $100,000 is not the best design, but Labor has always been in favour of targeting our family payments system."

Topics: federal-parliament, government-and-politics, greens, tax, federal-government, australia

First posted June 24, 2014 10:46:11