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Petrol Prices Drive Up Inflation

Press Releases January 23 2008

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Any “war on inflation” must include cutting petrol tax

Skyrocketing petrol prices are driving inflation up, according to the Australian Bureau of Statistics which released Consumer Price Index figures this morning.

“The Australian Bureau of Statistics singles out petrol as the most significant of the factors contributing to inflation, with petrol prices surging by more than 7 per cent in the December quarter,” Family First leader Steve Fielding said today.

“Family First has a plan to cut petrol tax by 10 cents a litre, which would provide immediate relief to families struggling to make ends meet while also cutting inflationary pressures. Petrol prices remain at almost $1.40 a litre in capital cities.

“The Government should have included a cut in petrol tax as part of its $31 billion of promised tax cuts.

“Petrol tax is one factor the Government can control in trying to reduce inflationary pressures.  More than 50 cents in the price of every litre of petrol is petrol tax.

“Petrol prices and interest rates are the biggest issues for families, especially those in the outer suburbs and regional Australia.

“Rising transport costs, caused by high petrol prices, have put upward pressure on inflation and in turn on interest rates,” Senator Fielding said.

“Lower income and first homebuyers tend to live in the outer suburbs where housing is cheaper. But poor public transport in outer metropolitan areas means they depend on their cars, so they suffer more from punishing petrol prices.

“The hike in inflation may lead to yet another interest rate rise, further punishing outer suburban families.”