The Victorian Automotive Chamber of Commerce (VACC) has criticised Treasurer Joe Hockey for comments on Australians’ transport options and has slammed the rise in the fuel excise, which it says will hit both drivers and car dealers and could lead to more unsafe cars on roads.
VACC executive director, David Purchase, weighed into the debate by responding to Treasurer, Joe Hockey’s claim that ‘the poorest people either don’t have cars or actually don’t drive very far in many cases’, VACC says the Treasurer’s comments were unwise.
“The issue of increasing fuel excise should not be about who can afford to drive, how often or how far. The key issue is affordable mobility for all Australians,” says Purchase.
“We should be able to move whenever and wherever we want, be it by road, rail, or any other mode of private or public transport. The cost of travel is increasing and a further tax increase on fuel will only make it worse. Any motorist, from any suburb, or any socio-economic demographic, should not be penalised for driving by having to pay higher fuel prices,” says Purchase.
Purchase points out that the fuel excise currently generates more than $14 billion annually for the Federal Government.
The Treasurer not only plans to increase revenue by $2 billion over four years by increasing fuel excise; he also intends to bring back fuel excise indexation. This twice yearly adjustment will have no ceiling or expiry date and will not take into account other economic challenges faced by small business operators.
“VACC is opposed to the indexation changes and to increasing fuel excise. We object to the Treasurer’s assertion that income should determine mobility. The perception is that as fuel prices go up, vehicle owners have to make harder choices,” says Purchase.
“For example, will the Treasurer’s so-called ‘poorest people’ feel inclined to service and maintain their vehicles if they pay more for fuel? The knock on effect could be more unsafe cars on our roads.”
“Any tax increase hits small business owners and the fuel excise increase will hurt our members in the repair, service and retail sector of the automotive industry. It will lead to increased business costs and heap more pressure on business owners, as we know from experience, they are inclined to absorb tax increases, rather than pass them on to consumers,” Purchase adds.
Royal Automobile Association of South Australia senior manager Mark Borlace, says the fuel excise is nothing more than a cash grab.
“The Federal Government already collects more from motorists than it spends on roads and transport, so there is no basis for a tax hike. Last year’s budget estimated the Federal Government would collect around $15 billion from motorists through the fuel excise, and that only $3.9 billion would be spent on roads,” he says.
“Under these proposals, every time you fill up at the bowser, you will essentially give the federal government a gold coin donation on top of the cost of the fuel.”
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