The Australian Greens are negotiating a deal with the federal government to increase the excise on petrol in return for a portion of the revenue being dedicated towards public transport.

In an interview with The Australian Financial Review, Greens leader Richard Di Natale also said his party was prepared to pass revamped cuts to the pension negotiated by Social Services Minister Scott Morrison but only if the government reversed its decision to dump a review into retirement incomes.

Senator Di Natale, who was elected Greens leader on May 6 after Christine Milne stepped aside, said he believed he could crunch a deal on petrol excise that would meet the Greens’ policy objectives of taxing fossil fuels while addressing the issues of equity and giving people alternatives.

The Victorian Senator, whose party wields the balance of power in the Senate, first met Mr Abbott during budget week and said “we’ve discussed a range of options”.

He confirmed these centred around hypothecating some of the billions of dollars in revenue the reintroduction of fuel excise would raise towards a public transport fund.

“We don’t have to necessarily identify specific projects,” he said.

He said the problem with the excise increase when it was proposed in last year’s federal budget was that all the money would be spent on roads “at a time when they attacked almost every vulnerable group in society”.

Senator Milne opposed the tax hike on the basis of the proceeds being spent on roads, but remained opposed when Finance Minister Mathias Cormann offered to delink the revenue from road building.


Senator Di Natale said he was a “different person” from Senator Milne.

“I’ll have a different style and approach,” he said..

“Where we can find areas to agree, we’ll agree, where we can find areas to get a good outcome for people, we’ll do that,” he said.

“(But) I’m never going to compromise the core values that we have, just so we can get a deal.”

The reintroduction of the twice-yearly indexation of fuel excise to inflation – which was frozen by John Howard in 2001 – was forecast in last year’s budget to raise $4.1 billion over the first four years but many tens of billions beyond that as the tax-take compounded. The net proceeds over four years are $2.2 billion after diesel rebates for mining and agriculture.

In September,the government enacted the increase by regulation but unless it is enshrined in legislation within 12 months, it lapses and the revenue would have to be refunded to oil companies.

Senator Di Natale was critical of the government decision to dump a review into retirement incomes as part of a political strategy which included ruling out any tax changes to superannuation beyond the next election.

Mr Morrison is seeking Senate support for his revamped pension cuts. Instead of reducing the indexation rate of all age pensions, Mr Morrison has halved the taper rate which will see 320,000 asset-wealthy retirees either lose their part pension or some of it.

Labor is still deciding its position but MPs told this week’s caucus meeting there was pressure from voters, many who identified themselves as Liberal voters, to vote against the changes.

Senator Di Natale agreed with seniors groups that the pension cuts should only be supported on the basis they were looked at in the context of all retirement incomes.

“Part of the problem with this government and where politics is at the moment is that we cherrypick little things and we don’t take the bigger view of what these reforms should look like and how they fit more broadly,” he said.

“You have to look at retirement incomes and you have to be looking at super, retirement age, all of those things are part of that package.”

“If we are going to discuss pension changes we need to discuss it in the context of a broader review.”

Senator Di Natale said the Greens would not be backing plans to pare back access to the taxpayer-funded paid parental leave scheme, nor the cuts to family tax benefits left over from last year’s budget, which the government wants to use to fund a boosted childcare package.

He said if there were other areas of FTB that were “poorly targeted towards high income earners”, the Greens would consider those.

But otherwise, the government should drop this “incredibly dogmatic view that the only way to balance the budget is to cut services to people”.

“Why aren’t they looking at super tax concessions, why aren’t they looking at negative gearing, why aren’t they looking at diesel rebates?” he asked.

“They ignore these things, they are making the wrong choices”.

Extracted in full from the Australian FInancial Review.