Budget 2014: Fuel excise rise to help fund more than $80 billion in new roads

TREASURER Joe Hockey has confirmed the Government will spend more than $80 billion on roads, to be funded by a change in the fuel excise.

THE Abbott Government will spend a huge $80 billion on new roads, with the states and private sector, in what Joe Hockey has described as the biggest increase in funding in our history.

As he prepares to hand down his first Budget on Tuesday, the Treasurer has confirmed the government will up spending on road infrastructure to be funded by a change in the fuel excise.

“Over the next six years we are going to spend in excess of $40 billion on roads and that will be matched by the states and the private sector with an additional $42 billion,” Mr Hockey told Channel Nine this morning.

“So it is a massive amount of money,” he said.

“Think about it, every time you spend $1 billion it’s like building a brand new major teaching hospital.”

Without going into the detail of an increase on the fuel tax, frozen at 38.1 per cent by former prime minister John Howard, the Treasurer insisted the huge roads construction effort would create work.

On the road again ... Funding for Sydney’s WestConnex stage two is in the budget on Tuesday night.

“That is tens of thousands of new jobs, but most importantly it is going to address the significant drop-off in investment in construction in Australia, associated with mining investment coming off.”

Mr Hockey said Australians would see work starting soon on new projects, under deals struck with the states.

“For example in New South Wales we are not just building WestConnex stage one but also WestConnex stage two, that’s in the budget on Tuesday night.

“That’s a massive project involving thousands of jobs, and work starts July next year.”

Building the East West project in Victoria would also begin next year, he said.

REVEALED: Tony and Joe’s tough Budget love

EXCLUSIVE: The Aussie families that pay no tax

GOOD VS EVIL: Why Budgets are like comic books

“It is hugely important that we move quickly to build this infrastructure to address some of the challenges the economy is going to face over the next three years.”

Tough budget ... Treasurer Joe Hockey works on the Budget in the Treasury Building, Canberra.

Opposition Leader Bill Shorten said he wanted to see the detail, arguing it is “hardly a great deal” to slug Australians with a higher fuel tax to drive on new roads.

“What Labor stands for, we think you should be able to run the Government of Australia without stinging millions of Australians with a new petrol tax,” he said in Melbourne.

“The Abbott Government is planning to cut their roads funding elsewhere and use new petrol taxes to replace the money they are robbing from roads,” he said.

“Surely, ever since 2001 when John Howard got rid of this petrol tax, the Liberal Government should be smart enough to find a way to fund our roads without asking people to pay more in a petrol tax at the fuel bowser.”

Mr Shorten suspected the Government would be “re-wrapping Labor’s announcements” and urged it to consider funding more public transport, especially rail infrastructure, to ease urban congestion.

Shadow Treasurer Chris Bowen said Labor would wait and see what the Coalition “actually delivers” when it came to new roads.

“The previous Labor government increased infrastructure spending very dramatically to make us one of the top performers in the world,” Mr Bowen told ABC TV, accusing the present government of cancelling projects and taking credit for others.

“If they’re serious about infrastructure we’ll be on board for that but we want to see some reality, we want to see some delivery and we want to see concrete plans.”

Despite the Prime Minister pledging before the election to introduce no new taxes and now planning a deficit levy and fuel excise hike, Mr Hockey denied the Government was “breaking promises”.

“Don’t assume they are new taxes,” he said.

“We never said that we were going to never change a tax, or alter a tax.

“In fact we were left with 92 announced but unlegislated tax changes by Labor which we have been methodically going through, and we have been getting rid of the ones that are simply unimplementable.”

He insisted taxes would be lower under the Coalition, than they would have been under Labor if it was re-elected.

Arguing all Australians had to share the burden for the next generation, the Treasurer described his first Budget as a “contribute and build Budget” and defended the Prime Minister.

“He’s an honourable man, and he knows that the most solemn promise that we made to the electorate was to fix the budget and fix the economy so that people can have jobs and we are going to do that.”

After pictures were aired showing Mr Hockey and Finance Minister Mathias Cormann smoking cigars, Nine’s Laurie Oakes asked whether the tobacco excise would go up in Tuesday’s Budget.

“I’m not commenting on that, but I do note that I think in the first budget in 1901 they had taxes on opium, so I can assure you that’s certainly not in the Budget,” he replied.

“There is certainly nothing to tax there.”

Originally published as Budget 2014: Fuel excise rise to help fund more than $80 billion in new roads