In a deal between Federal Government and Labor party, it was decided on Tuesday that the tax on petrol would be revised twice a year. The next hike for this year is expected in August. The Opposition agreed to support the Government’s decision to renew and increase petrol’s excise duties.

The Government said the current excise cost is approximately 40 cents a week for a regular household use. As of now, the tax is set to rise in February and August annually, to cope up with inflation.

“While the impact on individual households is modest, this measure will provide a predictable and growing source of revenue, which will help the Government boost its investment in job creating and productivity enhancing road infrastructure,” the Government said in a statement.

“This is a significant structural reform.”

Revenue To Be Use In Infrastructure

The government is hoping the deal would generate at least $3.6 billion over a period of five years, ending in 2018-19, and $23 billion over the next decade. Meanwhile, the Coalition decided that the revenue raised from the excise hike would be used in improving road infrastructure.

The government also gave in to the Labor’s demand for more than $1 billion to be used in the Roads for Recovery program. Though ALP or the Labor Party rejected such an idea last year, now they have a different opinion, as the Opposition Leader Bill Shorten said, “In a beauty parade, between giving money to oil companies and putting money back into Australian roads, generating jobs and confidence, it is clear which way Labor has to go.”

“If Labor didn’t compromise … all the money that Australian motorists had paid would go back to oil companies, Mr. Shorten added.

Extracted in full from International Business Times.