Queensland fuel subsidy effectiveness questioned
Sun 29 March 2009
Lynette Brown, Journalism
Some experts believe not all Queenslanders would feel an economic impact if the state government scrapped the fuel subsidy program.
The Queensland government pay a rebate of 9.2 cents per litre to fuel retailers who reduce the price of fuel and pass it on to motorists.
Former judge of the Queensland Court of Appeal and the Federal Court Hon. Bill Pincus QC led an enquiry into the Queensland Fuel Subsidy Scheme in 2007 and found there was serious doubt that the subsidy of 9.2 cents per litre was being passed on to the consumer.
Based on fuel prices listed on the Royal Automobile Club of Queensland (RACQ) and National Roads and Motorists' Association (NRMA) websites on June 1, 2009, the lowest price for unleaded petrol in Sydney was 95.9 cents per litre and in Brisbane on the same day was 108.9 cents per litre.
However, RACQ stakeholder and media relations coordinator Joe Fitzgerald said fuel prices were monitored in 2008 and the average difference between Sydney and Brisbane metro areas was 7.8 cents per litre.
“The subsidy, in general, is being passed on,” Mr Fitzgerald said.
The Pincus Report also found the “fuel subsidy was an expensive interference with the free market”.
Aussie World Garage owner Steve Amos said the supermarket chain duopoly operating petrol stations was driving the price of diesel higher.
“They’re making more money on diesel than they should be,” Mr Amos said.
Not all Queensland businesses would feel the impact if the subsidy was removed, because it did not apply to all vehicles.
Tractors, bobcats, backhoes and earthmoving equipment were not eligible for the subsidy because they were conditionally registered.
I.B.S company director Jenny Trafford said the removal of the fuel subsidy would have no impact at all on her company’s earthmoving and excavation business.
Ms Trafford said if Queenslanders were to benefit from a fuel subsidy, all businesses should be entitled to a fuel rebate, similar to the federal government scheme, rather than the fuel retailer getting the benefits.
Additionally, concrete pumping trucks, mobile cranes, elevating work platforms, truck-based drillers and street sweepers could only claim a portion of fuel consumed and were required to submit a refund to the Office of State Revenue for the consumption of subsidised fuel.
The Office of State Revenue investigations officer Greg Bradley could not confirm that every business was compliant in repaying subsidised fuel.
Mr Bradley said they randomly audited Queensland businesses to determine whether they had consumed subsidised fuel illegally.
Mr Bradley also said it was an ongoing program but that, due to the size and number of industries that were not eligible for the fuel subsidy, they could only look at a certain number of files each financial year.
“The Office of State Revenue attempts to be fair and equitable … to make sure everyone is compliant with the legislation,” Mr Bradley said.
Meales Concrete Pumping group general manager Peter Lethbridge was uncertain whether they were getting a fair deal on fuel prices, or whether all businesses were compliant in repaying the fuel subsidy.
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