BobP

The government makes 35c on Petrol at the moment in excise tax and GST is on top of that. The government can drop that to 0 if they want to and Petrol will drop from $1.60 to $1.20, if they want to include Petrol in carbon trading scheme, they can raise the price of petrol from $1.60 to $2.00. The government can make a 40% difference in price of petrol

BobP you fall into the trap of just blindly agreeing with what every politician says, there is a difference between what they say and what happens with their budget, if they reduce the excise, they can but they do not want to.

I agree - a lighthearted and lightweight program where the shriller the voice the more you get heard. This is despite some reasonably good questions from the audience at times.

I prefer Difference of Opinion where a group of experts are brought together to discuss a particular topic. They won't change the world either, but at least they were looking to understand what was causing problems and then looking for possible solutions.

dovif1,

You completely miss the point. The Government can certainly reduce the price of petrol, but this is what will happen if they do.

1. The price of petrol will go up anyway, because the marketplace is a very dynamic and fluid environment, and the companies will just fill the price hole as I mentioned earlier. The consumer won’t, in the final analysis, be much, if any, better off.
2. The Government, by slashing its excise, will effectively give the benefit straight to the oil companies. No one else. The flow-on effect of that is the Government will have less money to act as a bulwark to protect society from the forces of the market. If the Government makes too many decisions like this, it will become weakened, the market influence will become greater, and ordinary people will lose out even more.

I would agree with the premise that it isn’t fair the Government is slugging ordinary motorists at the bowser. But, in this case, the alternative is far worse.

Rob P

At one stage petrol prices were $1.20, under your arguement, there was nothing to stop the petrol companies charging $1.60 at that point in time to increase their profit under your argument.

The problem with that would be
a. ACCC will look for price collusion and fine the Petrol company
b. Since petrol companies are publicly listed companies, people will see their profit, if they report too large profits, the government is likely to re-regulate the industry
c. Independant operators might find it cheaper to import petrol from overseas and under cut Australian Petrol companies
d. Seeing the excess profits, overseas petrol companies might comes into the Australian market and take market shares from local operators

Under your arguement, there is nothing stopping the petrol companies from making petrol $2 now! But the facts are, there will be consequences if they do.

If the government drop the Excise and GST, prices of petrol will indeed drop by the 40c. It is simple regulation (no collusion) and supply and demand. If there is excessive profit in an industry, new entrants will force down the petrol prices eventually

Your argument does not hold any water

*I want to hear what plans there are to reduce our dependence on fuel complete with time lines and money to start work.*

Don't worry, its already happening out there, although less so
in Australia. American venture capital, MV manufacturers and others
are all rushing towards the plug-in. Production models should
be around by 2010.

http://blog.wired.com/cars/2008/06/uncle-sam-rolls.html

discusses part of it, although last weeks Economist carried a
16 page feature on energy and the smart money is on plug-ins.

What has caught everyone on the hop, is the rapid speed of oil
price increases. Don't forget that in the late 90s, oil was
still around 10$ a barrel, so nobody bothered to invest or do
the research. This peak in oil has made everyone sit up and take
notice.

These things just take a bit of time, that does not mean that
lots is not happening, for it is.