Australian Lefty on Politics, Governance, Science and Info Management

A policy sketch to take petrol prices from the headlines

Posted by Dave Bath on 2008-06-16

Age Newspoll results showing dropping approval for KRudd because of his handling of petrol prices and the desire for action to lower petrol prices says more about the Oz voter (stupidity or hypocrisy) than it does about the federal government.

There is a response available that is both responsible and politically palatable to the plebs (who talk about the desire for climate action, but don’t want it to affect them), but I wonder if KRudd’s team are smart enough to figure it out.

So I’ll do them a favor, and present a sketch of what such a response might look like:

First, I’d argue that action of petrol prices can only be justified where the fuel is used for economic production, rather than discretionary or recreational use.  Even the ignorant hypocrites in voter-land should be able to accept that valid proposition with minimal spin.

Second, I’d lay down a transparent timeframe for increasing excises and lowering any subsidies, so that forward planning by businesses and individuals is possible.  My initial suggestion would be annual increases in excise – perhaps 2%, and a removal of any temporary "subsidies" within 5 years – but these are just "straw man" figures.

So, petrol/diesel use for production that might deserve some relief would include transport companies, farmers, etc.  That’s obvious.

But what about relief for the average Joe and Jill?

Why not say "transport to/from work, providing you take a passenger to work, more than 6 km as the crow flies, and providing you get them to sign in and out – and a GPS in your car allows less paperwork".

So, cuts down costs of earning an income, promotes car-pooling (and lowers congestion), while avoiding the taxpayer subsidizing recreational and superfluous use – like driving two blocks to the supermarket.

The rebate also should only apply as a percentage of the per-kilometre usage of a relatively energy-efficient car, rather than a per-litre rebate that only rewards revheads and wealthy folk with big-petrol guzzlers.

There might be one or two exceptions… such as allowing rebates for meals-on-wheels folk, paraplegics, and those in remote areas.

OK, allowing for a few tweaks, the above policy outline allows relief for those who deserve it, promotes fuel-efficient vehicles and usage, while allowing businesses (and individuals) to prepare plans for adjustment periods.  This approach would get the issue out of the headlines, and make our politicians focus on more important things.

The only question is whether the KRudd team has the policy and political savvy to do something like this.

See Also:

  • Personally, I’d like to see fuel prices increase as much as possible, as soon as possible – as would anyone who believes in market forces (even though I’m not one of them).
  • "The List: Five Reasons to Love $4 Gas" (Foreign Policy Magazine, June 2008) has a good article, with a reasonable reference list, that has the following teaser:

    Sure, it’s ruining the global economy and making everyone miserable, but there’s an underappreciated upside to the high price of oil.

    One of the reasons is to control obesity, with the following note:

    A study published in "The Engineering Economist" found that Americans today use nearly a billion additional gallons of gasoline each year, compared with 1960, solely because they weigh more.


One Response to “A policy sketch to take petrol prices from the headlines”

  1. Nigel said

    Gold…and the calorific input saved reduces petrochemical costs inputs in the farm sector..less ambulance road trips…less weight in cars and buses, less weight in food delivery vans, FAT_TAX, Kim Beazely would never have run with this but trim Kevin may take it on…Bath for PM!!

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: