CANBERRA—Axing the GST on the fuel excise is a populist move that will not solve a long-term fuel crisis, the Australian Greens say.
The Rudd Government has flagged its review of taxation will consider dropping the 10 per cent GST on the 38.1 cents a litre fuel excise - a tax on a tax - which could save motorists 3.8 cents a litre at the petrol pump.
"Prime Minister Rudd was elected on the promise that he would be a policy boffin," Greens Senator Christine Milne told reporters at Parliament House.
"Instead of that, he's fallen at the first hurdle.
"He has jumped in with (Opposition Leader) Brendan Nelson in a populist, fiddling at the edges, on fuel prices."
The coalition is proposing a cut in the fuel excise of five cents a litre.
Both moves would do little to ease petrol price pressures, Senator Milne said.
"How is that going to give long-term relief when the oil price is going to go to $US150, $US200 a barrel?
"What we need to do is not take money from the states now when they need that money to invest in public transport and give a few cents to motorists which is going to disappear immediately."
Mr Rudd was no better than his predecessors by not delivering long-term solutions, Senator Milne said.
"If you're going to look at changing the way that you structure the excise, what we should be doing is taxing the embedded carbon in fuel.
"That way the heavier the fuel, in terms of the oil response, then the heavier the excise."
It would provide an incentive for alternative fuels and people using fuel-efficient vehicles, she said.
Senior coalition frontbencher Senator Eric Abetz accused the government of playing me-too politics.
"Instead of reducing excise, they're talking GST, to a large extent it has the same impact, if they go ahead with it," he told reporters.
Even cutting the cost of petrol by 3.8 cents a litre would still make a difference to the average motorist, he said.
"The price of fuel is that high that any difference would be of significance.
"The government cannot do much about fuel prices, other than the tax that is charged.
"That is why Brendan Nelson sought to reduce it. You cannot deal with the costs that come in from Singapore etc, but we can deal with the issue of taxes."
Family First Senator Steve Fielding said axing the GST on the fuel excise would ease the pressure on inflation and the risk of a further increase interest rates.
"Even if it's a small amount, at least you are sharing the burden with Australians," he told reporters.
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