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Now that.. would be political suicide. Don't you remember the brouhaha a few months back when they were talking about incrementing the fuel excise? The "poor people don't drive cars" fiasco? And rightly so in this country too, even if we did get decent public transport in the cities (not ***** likely) there are a lot of people on low incomes in regional areas that rely on their cars and would be very nastily impacted by higher fuel prices, with no good options to switch to something more efficient (wish everyone had the time and temperament to eco-mod, but sadly it ain't so).
A better strategy (if you're interested in results in terms of emissions etc.) might be to part-subsidise (or remove tax from) LRR tyres, and subsidise or otherwise encourage regular car service and tune-ups (say by rebating a large part of the cost, but only if the car is serviced regularly). I suspect there are a *lot* of cars out there that could gain 5-10% F.E. just by being kept in better shape, only the owners are living week-to-week and thus end up spending less on maintenance, which is a bigger hit at one time, and more on fuel, which is distributed over time and easier to justify as an expense from that mind set - "I needed the fuel" is a lot more 'obviously true' than "I needed to service the car", even if the saved fuel was worth more than the servicing (though that's debatable with current labour costs).
In the longer term though, there's no substitute for preventing gas-guzzlers from getting on the road in the first place. People buying an SUV, ricer or "hot ute" aren't going to change their choices based on a 50% increase in fuel cost. For those with no common sense (all too common unfortunately) common sense must be supplied :-/
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