Govt has mandate on fuel tax: Abbott

Prime Minister Tony Abbott says he has a mandate to fix the budget and that includes an increase to fuel excise.

A petrol pump.

Tony Abbott says he has a mandate to fix the budget and that includes an increase to fuel excise. (AAP)

Prime Minister Tony Abbott has defended his government's decision to put an interim tariff on fuel, saying it has a mandate to fix the budget.

The government has by-passed Senate opposition to the re-introduction of fuel excise indexation by putting a tariff on oil companies, a move that still has to be endorsed by parliament in the next 12 months.

Opposition Leader Bill Shorten, who called it a "gutless decision" that had no mandate from the people or the parliament, asked the prime minister how much his petrol tax will cost people.

"This government has a very clear mandate to fix the budget," Mr Abbott told parliament on Tuesday.

"And the measure that the leader of the opposition refers to is a budget measure."

He said it is not a new tax, it's the indexation of an old one, and will cost the average family just 40 cents a week.

Treasurer Joe Hockey told parliament the fuel excise is necessary in order to help to deliver the biggest road building program in Australia's history.

Building more toll roads with revenue from higher fuel tax will only increase traffic congestion and pollution, the Greens say.

They are now considering whether to support the change or vote it down when it returns to parliament in late 2015.

"It appears Tony Abbott will stop at nothing to build toll roads from one end of the country to the other," Greens leader Christine Milne said.

"Now he is using a sneaky trick to spend money on toll roads that will increase congestion, increase pollution and make life harder for people without access to public transport."


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