POPULAR WORDS

The federal government's Fuel Taxation Inquiry needs to look to Europe to find long-term solutions to Australia's fuel-pricing systems, the Bus Industry Confederation (BIC) claims. President Stephen Lucas says the current fuel tax system does not properly reflect the true costs of transport in Australia. "The Fuel Taxation Inquiry presents Australia with a unique opportunity to create a fair system that can deliver the incentives we need to reduce congestion, pollution and road fatalities," he says. "A fair summary of the current fuel tax system is that the federal government looks at the total revenue generated last year and then decides to add a little bit more. "Until we create a system based on sound economic principles, the petrol bowser will continue as the money tree of Australian taxation." Any future system, Lucas believes, must reflect the true costs of fuel rather than the need to generate additional tax revenue. "We need to create incentives for the road industry to clean up its act by adopting fuels capable of reducing air pollution and greenhouse gas emissions across urban and rural Australia," he says. "There is nowhere in the world that has done this more successfully than Europe. The fuels used to power Europe's cars and buses are far cleaner than anything used in Australia. "The BIC is eager for Australia to adopt similar fuel standards, but the current system deny us these opportunities. This is a situation we must correct." Lucas points out that the European Commission (EC) has undertaken extensive research into the environmental and social costs of fuel cycles as part of its ExternE project. This project has examined the likely benefits of alternative transport fuels and translated these impacts into real economic terms. "The BIC believes that the EC work is the most advanced in this area and should provide the intellectual basis for the Australian Fuel Tax Inquiry," he says. "For example, it points to the need for dirty diesel vehicles to pay higher excise rates while clean low-sulphur diesel should pay much lower excise rates." However, Lucas argues that the revenue-neutrality constraint imposed by the Commonwealth restricts the potential of the Inquiry to deliver true reform. "But within this constraint we expect to see the environmental performance of different fuels used to set their respective excise levels. "This will improve the pricing incentives for users and producers to clean up their act, a position BIC has consistently argued for," he says.