dimmo28: There are no votes to buy: I bet if petrol prices are still so high in the run up to the next electiion you can bet an excise cut will be just what the doctor orderd.

ranomatic: Most people would never notice: a cent per liter tax cut.  Would you?  I see why Mr. Howard says motorists would want a larger cut.  With the current variability in pricing, I am not sure even a ten cent reduction would meet expectations.  A ten cent cut would cost $3.8 billion in excise tax.

Going all the way, you could eliminate the excise tax, a cut of 38.143 cents, if the numbers I have are correct.  With average pricing today in Melbourne at 136.7 , that would push the price back below the dollar mark.  If prices continue to increase, even that could look small, but the cost to the Government would be a staggering $14 billion!

BTW - What is

the ~$19 billion bonus that the government is getting out of the petrol excise since Christmas

Is it excise + GST projected to the end of the year?  A secondary question - Why is it a bonus?  The excise tax is tracking very well with the budget.  The GST on fuel will come in high, possibly 3-4%, but I am not convinced this will mean any additional money for the states.  After all, money spent on fuel (and its associated GST) is money not spent on other GST assessed items.

avocadia: Tricky and Mean:

The 19 billion figure is a pretty dodgy figure, I imagine. It is predicated on the idea that if it would cost the Federal Government $380 million dollars to forgo enough tax revenue to drop the cost of petrol by 1c, then the ~50c increase since this time last year generates $19 billion. That is, $380 million multiplied by 50. So far as I can tell, Howard was only discussing the excise, not GST.

I probably didn\'t lay the facetiousness of my criticism on heavily enough. Having said that, it should be considered a bonus to the Federal Government\'s books. I\'m happy for them to keep the money, I suppose, as the petrol prices don\'t really phase me that much. But I think Howard is being tricky and mean when he claims that cutting the fuel excise while petrol prices are 30-40% higher than even three months ago will mean $380 million less than they planned for in the last federal budget.

IANAEconomist, so really, I\'m just shooting my mouth off - as if that doesn\'t describe 99.99% of the political blogosphere - and in all probability my figure up there is dodgy.

ranomatic: Politicians: They\'re a tricky and mean lot and they can always find an economist somewhere to agree with everything they say.