Big dip in fuel costs unlikely

By TOBY WALKER twalker@dailyexaminer.com.au

PRIME Minister John Howard told Sydney radio listeners that Australians may never see fuel prices dip below $1 again and his deputy Mark Vaile said the same thing during his visit to Grafton yesterday.

Mr Vaile told 70 guests at a lunch at the Grafton City Bowling Club organised by local business Big River Timbers that he doubted a deal could be brokered with the states that would reduce the amount of GST collected from the government's fuel excise.

There was no 'silver bullet' that could ease the surging worldwide demand driving up prices.

He said rural and regional Australia had been the hardest hit.

The Nationals' leader continued to push the line that the government's hands were tied on the petrol debate and said it strengthened the case for a more widespread introduction of ethanol-blended fuels.

But he was not about to leave the party faithful in the Clarence Valley without shoring up support for the Telstra sale.

Earlier in the day he talked up the Nationals' $2 billion Perpetual Communications Fund designed to safeguard communications services in the bush. He estimated around $100 million could be earned annually from the fund, which would be left untouched until the first of a series of tri-annual mandatory reviews in 2008.

"At the end of 2008 is when the first recommendations come back to spend the earning that will start accumulating at the end of this year (from the Perpetual Communications Fund)," he said.

"So you'll have another $260 million out of the Connecting Australia Fund plus potentially another $300 million out of the trust that will be spent over the following three years.

"So it's all linked together and there's a guaranteed fund- ing stream."



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