The Government has struck a deal with the Opposition that will see a gradual increase in the excise payable on domestically produced biodiesel and fuel ethanol.

The controversial measure was announced in the government’s first budget.

Treasurer Joe Hockey said on Thursday the government would table amendments in the Senate next week to implement these changes.

“This will phase in excise payable for biodiesel producers in equal increments over 16 years,” he said.

“That starts at zero in 2015/16 and reaches a final rate of approximately 50% of the full petrol and diesel excise rate in 2030/31.”

Greens Leader Richard Di Natale said this week he was in discussion with the government but said any deal on the fuel excise would depend on more public transport options and addressing some regressive impacts.

Federal Queensland MP Bob Katter said the re-introduction of a fuel excise would have negative consequences on regional Australia.

“When people go to work in the capital cities they are subsidised on commuter transportation, buses, rail, trams, monorails, to the tune of 30% tax on fuel.

“When we non-metropolitan people go to work we do not have commuter transportation systems and we pay 30% tax on fuel.

“So they get subsidies to the tune of 30% and we get taxed 30%.

Extracted in full from Coffs Coast Advocate.