Petrol Competition

Petrol once again has dominated politics, this time with the Prime Minister admitting that more could be done on the GST applied to the fuel excise, or the entire excise. Any change would certainly impact on the budget of states, through the GST collection. Maybe Brendan Nelson has found a way to cause some disquiet amongst the wall to wall Labor governments? As I’ve said before, I disagree with the “five cents off” provision, mainly as it can be easily wiped out by an overnight change in the oil price.
Then again, politics is never always necessarily about what’s right for the economy, often rank populism gets you air.

Brendan Nelson is starting to find his own way. An opposition leader always lurches from one ‘important/crucial test’ to another. In Nelson’s case, it was navigating the opening of the new parliament, climate change and most recently the Budget Reply. Unfortunately, it never stops, as the Gippsland by-election is the next stop. But Nelson has managed to appeal to Rudd’s me-tooism, and he’s now (reviewing) at least the budget measures. The next couple of weeks will be tough for Rudd, as he has to deal with the comment that his government has done everything physically possible to help with the cost of living. The increase in fuel prices must transfer through to the cost of consumption goods; ‘working families’ must be really pleased that no further help is in the offing from government.

To be fair to Rudd and his government, a lot of the price increases are not due to Australian factors; petrol is a component of the CPI, but he must deal with the promises made at the election to all those he promised life would be better.