Hostile Senate means fuel tax rises set for August 1 won’t go ahead

THE argy-bargy in Canberra is set to have an unexpected benefit for motorists. Here’s how the political scrap will make you better off.

Refueling. Petrol pump. Bowser. Thinkstock. Generic image.

MOTORISTS won’t have to pay higher petrol taxes from August 1 as planned after the government today parked legislation to increase the excise because it wouldn’t pass the Senate.

And the government has again deferred a final vote to scrap the carbon tax in the upper house by instead moving a bill to dismantle Labor’s mining tax.

The carbon price repeal was to have been a priority today, but the government is still negotiating with crossbenchers.

A number of measures meant to start on July 1, such as changes to family tax benefits, have already been put off because the government can’t guarantee it will win a Senate vote.

Petrol prices will not rise on August 1, as planned.

The bid to add some $2.2 billion to fuel excise over four years and fund massive roadworks would not get the votes of Labor, the Greens, or at least four of the 10 crossbench senators — three from the Palmer United Party and the Australian Motoring Enthusiast Party’s Ricky Muir.

The government instead immediately moved legislation that would dismantle the Labor government’s mining tax, an indication it is not yet confident of the numbers to repeal the carbon pricing system.

The twice-a-year increase in fuel excise — frozen since 2001 — was to have started this August but Parliament will rise for a five-week break on Thursday without dealing with the legislation.

It was one of the most contentious measures in the May Budget. The twice-a-year excise jump would add just 55¢ a week to a family’s petrol expenses in its first year, according to the government.

Prime Minister Tony Abbott in question time today. Picture: Gary Ramage

However, the Greens have complained the money raised will go to roadworks and increased use of cars, while low-income families will not get better public transport connections to avoid the tax rise.

The Senate standoff also threatens Tony Abbott’s ambitions to be remembered as the “Infrastructure Prime Minister”.

The government’s decision was revealed in a motion to “rearrange government business” moved as soon as the Senate opened for business this afternoon.

Motorists can expected some relief at the bowser.

Originally published as Hostile Senate means fuel tax rises set for August 1 won’t go ahead