Senator the Hon Mathias Cormann

DAVID KOCH: The Government has been labelled "gutless, dishonest and sneaky" for its decision to increase petrol taxes. From November the 10th fuel will cost us all more. The excise will rise, even though it hasn't been approved by Parliament.

BILL SHORTEN (EXCERPT): He ambushes Australian motorists; he ambushers the Parliament of Australia and through the back door, he has launched a sneak attack on the wallets and the cost of living of every Australian.

DAVID KOCH: A tax rise will cost average families an estimated 40cents a week extra, according to the Government. But that figure is disputed by motoring groups and Opposition MPs. Finance Minister Mathias Cormann joins us now from Canberra. Minister thanks for joining us.

MATHIAS CORMANN: Good to be here.

DAVID KOCH: You have heard the Opposition using words like "sneaky, dishonest and ambush" What do you say to that?

MATHIAS CORMANN: The process that we are using is a process that is available to us under the legislation and we are implementing a Budget measure that we announced more than five months ago. The previous Labor Government used the exact same process in order to implement an increase in the excise and customs duty on 'alcopops'. They are just running a political campaign. We understand that. But our focus is on building a stronger economy and repairing the Budget.

DAVID KOCH: Why not go through the parliamentary process anyhow? Are you sort of thumbing your nose at it?

MATHIAS CORMANN: Not at all. We are going through the exact process that is envisaged in relevant legislation. We are giving effect to the increase in the fuel excise which as you say, will cost a typical household about 40 cents a week by the end of the financial year, a typical household using 50 litres of fuel a week. Of course, within 12 months the Parliament will have the opportunity and indeed will need to validate the decision that we have made. That is the process that is prescribed in the legislation. That is the process that the Government is following.

DAVID KOCH: That is the thing isn't it, while you may skip the lower house with this, the Senate has got to approve it within 12 months, even going down this route.

MATHIAS CORMANN: Both Houses of Parliament will have to validate it within 12 months. So it will have to be validated in relevant legislation by the Parliament within 12 months.

DAVID KOCH: If they knock it back what happens to the tax? Do you then refund it?

MATHIAS CORMANN: If the Parliament were not to validate this measure that we have taken, and we don't believe that that will happen by the way, but if that were to take place, then obviously the taxpayers that have paid the tax would get a refund of that tax.

DAVID KOCH: So who is that, us?

MATHIAS CORMANN: No, the taxpayers are the fuel manufacturers and the fuel importers. The fuel manufacturers are paying the excise and the fuel importers are paying customs duty. So the practical effect of the Parliament not validating this measure, the same as was the case with the 'alcopops' measure incidentally that was validated on the last possible day, if it hadn't been validated on that day, the money would have gone back to liquor distributors and distillers.

DAVID KOCH: Oh that's a pain. Even though we are paying are it for the pump, it will go to the oil companies if you can't get it up?

MATHIAS CORMANN: The taxpayers under the relevant legislation are the fuel manufacturers and the fuel importers.

DAVID KOCH: That is a pain. Look, we are a running a viewer pole on whether the people believe the move is dishonest. 96 per cent say yes. Where have they got it wrong, what would you say to that 96 per cent who reckon you are being dishonest?

MATHIAS CORMANN: We hope that over time people will come to accept that what we are doing is to build a stronger Australia. The value of the fuel excise back in 2001 was 42 per cent. Inflation has eroded the value of that over the last 13, 14 years to the point where it is now down to 25 per cent. Most Australians would expect most payments from Governments to be indexed by CPI. But here we have got a revenue source for Government which has been eroded through inflation over the last 14 or so years,13 or so years. We have made a decision that it is important for us to ensure that the value of the fuel excise keeps pace with inflation moving forward. And all of the additional revenue will be invested in productivity enhancing road infrastructure, which will help us build a stronger economy which in turn over time will generate more revenue for Government.

DAVID KOCH: Alright, thanks very much for your time.