Rumoured Fuel Excise Increase A ‘Back-Door Carbon Tax’: AAA Photo:

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Trevor Collett | May, 09 2014 | 5 Comments

The Australian Automobile Association (AAA) has labelled a rumoured increase in fuel excise in the upcoming Federal Budget as a “back-door carbon tax”.

The government has not officially announced a change to the current fuel excise, but government spokespeople have not yet ruled it out - leading to widespread speculation that the excise may increase for the first time in 13 years.

Former Prime Minister John Howard reacted to public opinion in 2001 by capping the excise at the current 38.1 cents per litre.

At the time, petrol and diesel prices were nudging the $1/litre barrier in capital cities and the continually-rising excise was seen as a poor political move during a federal election year.

Speaking with the ABC about the rumoured excise hike, AAA’s Andrew McKellar said motorists were not getting value for money through existing taxes, having previously said “if motorists spend a dollar, they should get a dollar”.

“Motorists are paying too much tax already [through the] 38 cents a litre fuel excise as it stands, and we're not seeing that money going fully back into investment in roads and land transport infrastructure, so we'd be very concerned,” Mr McKellar said.

“We'd be urging the government to rethink this, to start talking to the constituents and not proceed with this tax hike.”

Virtually every state motoring group has spoken out against a rise in the current fuel excise – including the RACT, NRMA and RAA - while Queensland’s RACQ has pointed to an imbalance in taxes when subsidies to the mining and trucking industries are considered.

“There is nothing fair about slugging motorists again while the trucking and mining industries continue to receive subsidies,” RACQ’s Michael Roth said.

“Heavy vehicles do almost all the damage to the roads yet they are charged a reduced fuel excise rate. If the government needs more revenue the fair option would be to charge motorists and truckers the same.”

The excise currently raises around $15 billion annually for the federal government, while an extra one cent per litre would raise an additional $391 million.

If the rate was to rise by the rumoured three cents per litre, an additional $1.17 billion in revenue could be forthcoming from fuel bowsers.

On average, Australian households pay around $792 per year in fuel excise, which would rise to $854 if the higher excise was implemented.

Also unclear is if any rise to fuel excise would be a one-off or temporary arrangement, or if annual or bi-annual rises would be reintroduced.

The 2014/15 federal budget will be handed down on Tuesday. Stay tuned to TMR for more.

MORE: Fuel news, federal government news

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