A leading academic has called on the Queensland government to scrap its fuel subsidy scheme and redirect the funds to improving the efficiency of the state's roads and public transport systems.
Professor Allan Layton, head of QUT's School of Economic and Finance, says the scheme is not delivering as intended - a situation acknowledged by the government itself.
He points out that under the Queensland Fuel Subsidy Scheme (QFSS) the government gives fuel retailers 8.3 cents a litre of fuel sold.
This subsidy is expected to be passed through to consumers in the form of lower retail prices - which, after accounting for GST, should make fuel around 9.2 cents a litre cheaper in Queensland than in New South Wales, which does not subsidy petrol consumption.
"However, the ACCC recently confirmed that during 2002 Sydney prices were, on average, only 7.1 cents a litre cheaper tan in Brisbane.
"This has prompted the State Treasurer to state: 'The 8c/l subsidy ... cost ... about $500 million a year, so [a shortfall of] two, or a quarter of that, equates to about $125 million a year. That's a lot of money and it's coming out of motorists' pockets. It would appear the money is going to the oil companies - it can't go anywhere else.'
"Clearly then the government acknowledges that, as a piece of government policy, the QFSS is not delivering as intended. Each year it is apparently costing Queensland taxpayers $500 million but delivering benefits of only $375 million to the state's petrol consumers," Layton says.
Rather than continue to rail against the petrol companies and retailers about the alleged skimming of the $500 million, he suggests the better course is to scrap the scheme and invest the money in the state's transport infrastructure.
"This was one of the main recommendations of the public inquiry into mechanisms to fund Queensland's roads and transport infrastructure, which I chaired last year for the Local Government Association of Queensland," he says.
"The very significant economic, social and environmental benefits flowing to the people of Queensland from this annual investment in our roads and public transport will be far greater than the dollars invested."