(Article by Eric Worrall republished from WattsUpWithThat.com)
‘It will be difficult’: Prime Minister Anthony Albanese concedes cost of living crisis will worsen ahead of increase to fuel prices
Ahead of an expected rate hike and an increase to the price of fuel, Anthony Albanese has conceded the coming months will be difficult for many Australians.
Joseph Huitson Digital Reporter
September 5, 2022 – 10:45AM
Prime Minister Anthony Albanese has admitted the end of the fuel excise cut will further add to the skyrocketing cost of living issues facing Australians.
The former Coalition government announced the temporary six-month halving of the fuel excise tax – which was 44.2 cents per litre – during the March Budget amid soaring petrol prices.
The measure, which ends on September 29, will see the excise again rise by 22 cents.
Ahead of a new parliament sitting week, Mr Albanese said the cut announced in the budget had bipartisan support as he noted it was a “difficult decision” to end it.
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The plan is to spend $20 billion over 8 years, or $2.5 billion per year on the green grid upgrade. The temporary fuel excise cut, which cost the government $6 billion per year (half the $12 billion raised annually), saved Australians $0.22 / litre fuel ($0.81 / gallon).
So by these numbers, if the government cancelled its green grid upgrade, the savings could fund a $2.5 billion per year permanent cut in fuel tax, which would save Australians $0.22 ÷ $6 billion x $2.5 billion = $0.09 / litre, or $0.33 / gallon.
$0.09 / litre or $0.33 / gallon might not seem much to some people, but that cost shows up in a lot of places – the cost of delivering food to supermarkets, the cost of transporting pretty much everything. If people fill their automobile once per week with 50L of fuel, that subsidy for big green is an extra $4.50 they have to pay for their gasoline.
That $4.50 per week is the cost of a home cooked budget family meal (lentils, a little chicken, a serving of frozen vegetables, a stock cube, and garlic), 2/3 the cost of a subsidised medical prescription, or over 3 months, a substantial portion of the cost of the skyrocketing energy bills low income families are struggling to pay.
Perhaps worst of all, the fuel tax is helping to push up mortgage interest rates. Fuel costs are a major source of inflation. The Australian Reserve Bank is raising mortgage interest rates to try to contain rising inflation, which is largely caused by skyrocketing energy costs. Those extra fuel tax dollars Albanese is planning to impose add to the upward pressure on inflation and mortgage interest rates. The strength of inflationary pressures, and the consequent height of the coming peak in mortgage interest rates, could make the difference to whether struggling young families manage to cling onto their new homes through the coming economic downturn.
We Australians are all paying more for pretty much everything, because of our green left government’s renewable energy fantasies. Sooner or later, when the utter failure of our government’s Net Zero plans become obvious to everyone, our politicians are going to have to answer for the higher costs and hardship they recklessly imposed on voters.
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