Victoria’s peak automotive industry body today made the interesting claim that the Federal Government’s proposed increases to the fuel excise could render low-income car owners less able to keep their vehicles adequately serviced, thereby leading to more unsafe cars on the road.
As part of its 2014 Federal Budget, the Abbott Government announced plans to raise $2.2 billion in additional revenue by indexing the fuel excise against inflation — funding it said would go towards improving Australia’s roads.
At present, the excise raises about $14 billion annually for federal coffers.
It was the defence of this proposed hike that this week landed Federal Treasurer Joe Hockey in scalding water, with his claim that low-income owners do not drive as often as richer people, and therefore will shoulder less of the burden.
This stance was largely pilloried this week, with many on the other side of the political spectrum claiming that lower-income drivers were less well serviced by public transport, and therefore had to drive further than richer people living in closer proximity to urban hubs, and that the cost of fuel makes up a higher relative proportion of low-income earners, even if it isn’t higher in raw numbers.
Now the Victorian Automotive Chamber of Commerce (VACC) has weighed in with its take, with executive director David Purchase lambasting Hockey unwise and calling the excise hike another example of “motorists being milked dry by the Federal Government”.
“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,” Purchase said.
Beyond this, Purchase also conjectured that any extra impost on drivers would have a knock-on effect on other areas of the automotive industry, notably the areas of vehicle maintenance.
“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,” he said.
“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.”
As the VACC freely admits, such an outcome would hurt its members in the repair, service and retail sector. The VACC represents 5000 small and mid-sized businesses, including aftermarket repairers, which employ around 50,000 Victorians.