Dr. Nelson’s petrol policy for Australia

Mungo MacCallum writes on Crikey about Dr. Nelson, the leader of the Liberal party in Australia on his budget reply speech suggestion of a decrease in excise duty of 5c per litre of petrol.

There are some policy proposals which are so bad that they are unforgivable, and this is one of them. At the most superficial level it is meaningless populism: a five cent cut now would save the average family less than $5 a week and would be quickly absorbed by future price movements anyway. But at a deeper level it contradicts the entire thrust of sensible fiscal and energy policy.

Petrol in Australia is still relatively cheap compared to most of the world, especially Europe, and we still use far too much of it. Because it is a non-renewable and increasingly scarce resource, and a major contributor to climate change as well, we should be trying to wean people off it. By announcing that if punters whinge loudly enough the government can and will bring the price down, Nelson is sending all the wrong signals.

And it isn’t even an original idea: John Howard did it when he was in trouble at the beginning of 2001, but wisely resisted pleas for an encore for the next seven years. Nelson’s move, against all advice, is appalling policy and is now turning into bad politics as well. And by making it, he may well have added himself to the budget’s short but vocal list of losers

Even though we can understand the need for Dr. Nelson to propose a election style stunt in his budget reply speech, this is outright scandalous regarding his economic credentials and provides a glimpse of the climate change policy that can be expected if the Liberal party is elected again.

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