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Joe Hockey And The Great Fuel Excise Con

Whatever you might think of Treasurer Joe Hockey’s elitist comments about “poor people” and their cars, there are a couple of things that every motorist should know when it comes to fuel excise.  They should go outside and paint


Whatever you might think of Treasurer Joe Hockey’s elitist comments about “poor people” and their cars, there are a couple of things that every motorist should know when it comes to fuel excise

They should go outside and paint two large concentric red circles on the sides of their cars because, right now, they are being hit by Government as an ‘easy target’. 

Worse, if the Federal Government’s proposed lifting of the cap on fuel excise goes through, they are about to be hit a lot harder. 

And, yes, this is a regressive tax, notwithstanding the weasel words of the Treasurer on the issue. 

Rich or poor, if you rely on your car you will be paying more tax through the bowser.

For any lower income families who happen to rely heavily on their cars, like, say, in regional Australia or in the outer suburban fringes, that increased tax impost will be a disproportionately larger part of the household income.   

That’s a regressive tax - upside down, sideways, any way you want to look at it. It takes a larger part of a lower income, and a lesser part of a higher income. 

And regressive taxes hit the poorest hardest. Even the noble arch-conservatives of the News Limited press have attacked the Treasurer’s position. 

But notwithstanding that debate and the curious hole the Treasurer has dug for himself, there is a con on motorists in this whole fuel excise issue. 

The Con: that the fuel excise goes back into road funding.

Well, no. 

What obscures the issue is the way the totals of “money in, money out” are presented.

On the face of it, the totals in fuel excise collected, and the annual expenditure on Australian roads and road infrastructure, are, give or take, about line-ball.

The excise is currently capped at 38.143 cents per litre (cpl). In case you are unaware, you also pay GST on this excise as well as the GST on the remainder of the fuel purchase. 

TMR Managing Editor

 

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