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Emir Of Ashburton Gets The Wrong End Of The Slick

Emir Of Ashburton Gets The Wrong End Of The Oil Slick

Deputy Prime Minister Jim Anderton said today rejected the National Party's suggestions that the government should subsidise petrol companies through tax cuts on petrol.

Jim Anderton was puzzled why the Emir of Ashburton, Jenny Shipley, was taking the side of the oil companies in defending a 12% increase in petrol prices since March while crude prices are at about the same level.

"The government is not making more money from petrol price rises. For every dollar the government gets in increased GST revenue due to higher petrol prices we lose at least a dollar in GST revenue through a reduction in spending on other items," Deputy Prime Minister Jim Anderton said.

"What is worse, petrol prices are a major contributor to costs across the entire country. Increases in petrol prices have a large effect on inflation for example, which means the economy could be hit with interest rate rises further curtailing economic growth.

"This in turn reduces income for the government, through a reduced overall tax take. Therefore, increases in petrol prices do not mean any increase in government revenue at all.

"The last time petrol taxes were increased was six months after the Jenny Shipley became Prime Minister. Since that time petrol prices have gone through the roof and the increase has had nothing to do with government tax changes.

"If we were to do as Jenny Shipley has suggested there is no guarantee that a reduction in petrol tax would be passed on to motorists.

"We would also have to find money for schools, hospitals and superannuitants from other sources.

"We would in effect be subsidising petrol companies at the expense of essential social services, something that this government will not do," Jim Anderton said.

Ends

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