States oppose cuts to fuel excise

Australian state leaders are opposing the removal of the Goods and Services Tax (GST) from petrol excise unless there is compensation for any loss in revenue. The federal government is considering removing the GST on fuel excise as part of its wide-ranging taxation review. If implemented, the move could save motorists around US$0.04 a liter. But Queensland Premier Anna Bligh said she would not support any changes to the GST on petrol that would take away revenue from the states. Prime Minister Kevin Rudd described the proposal as economically irresponsible and raid on the surplus. Victorian Premier John Brumby said his state stood to lose US$150 million a year if the GST was removed from petrol and he would want the federal government to find ways to fill that gap. NSW Premier Morris Lemma agreed, saying the federal government would have to hold discussions with state governments over the issue. (May 17/27, 2008)