Roads to Recovery gets $1.1b boost with fuel excise increase

OPPOSITION Leader Bill Shorten has won $1.1 billion for regional roads in return for his support for government's plan to increase fuel excise.

He said the boost to the Roads to Recovery program would stimulate regional economies, generate jobs and provide a boost for vital local infrastructure.

Mr Shorten said on Tuesday supporting the fuel excise was the best option for Australians, despite opposing the proposal when it was announced last year.

He denied the government had forced his hand after frequently saying he was light on policy but big on rhetoric.

"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," he said.

"What we want to do is see confidence being built ... we want to see extra jobs being created."


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Transport Minister Warren Truss released a statement a short time later saying the government had accepted the Opposition's proposal.

"Implementing this important structural fiscal reform will contribute significantly to our efforts to build a stronger, more prosperous economy," he said.

"This major boost to local road construction and maintenance reflects the importance the Australian Government places on building the infrastructure future of Australia."

Treasurer Joe Hockey said the agreement would see the fuel excise increase in February and August each year in line with the consumer price index.

He said the agreement between the Coalition and Labor would see a $1.1 billion increase to the Roads to Recovery program over the next two years, but it will revert to its base funding of $350 million following that.

Australian Local Government Association president Troy Pickard welcomed the additional funding saying he was pleased the two parties had come to an agreement.

"Local government faces a huge task in managing our local roads infrastructure, which is more than 670,000km in length and valued at more than $165 billion," he said.

"This infrastructure plays an essential role in sustaining local economies by connecting freight networks across regions."

The increase to fuel excise was announced in last year's budget with the government saying it would boost its coffers by $23 billion over the next decade.

When Labor opposed the budget measure when it was announced the government went into talks with the Greens about supporting the proposal.

But the Greens want the extra money from increasing the fuel excise to be spent on public transport, not road upgrades.


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