Stephen Conroy (Victoria, Australian Labor Party, Minister for Broadband, Communications and the Digital Economy) Share this | Hansard source

I thank Senator Williams for his question. All fuel for passenger motor vehicles, including petrol, diesel and LPG, and fuel for light on-road commercial vehicles is not subject to a carbon price. Households and most small businesses already pay fuel excise on their transport fuel and do not face a further carbon price. That is because the government knows that fuel costs are a major expense for family budgets. The government has carefully considered the treatment of fuel to balance the needs of households and most small businesses, who already pay the highest rate of excise, and those who pay little or no excise. The combustion of fuel creates carbon pollution, and putting an effective price on that pollution through the excise system for some fuel users plays an important role in creating an incentive to switch to lower emission fuels, use zero emission biofuels and use fuel more efficiently. Biofuels will not be subject to an effective carbon price. There is no adjustment of fuel tax credits for heavy on-road vehicles for the first two years. This has given trucking businesses time to get their systems and contractual arrangements in place. The government's comprehensive Household Assistance Package takes full account of the extent to which these modest increased costs flow through to household budgets. It will have a very modest impact on transport costs, adding around 29c to the cost of moving a tonne of goods 100 kilometres. The transport industry already deals with the frequent movements in international fuel prices, which regularly have a much greater impact than are proposed for the effective carbon price. (Time expired)