In a statement which at best we hope has been misconstrued, Joe Hockey has declared that indexation of the fuel levy will only affect the rich, because the poor don’t drive.
In a bid to counter claims that his first budget was most detrimental financially to the young, the unemployed and those on a pension, Mr Hockey used the fuel excise as an example of how everyone was doing their fair share of the lifting. “What we’re asking is for everyone to contribute, including higher-income people. Now, I’ll give you one example: the change to fuel excise. The people who actually pay the most are higher-income people, with an increase in fuel excise, and yet the Labor party and the Greens are opposing it. They say you’ve got to have wealthier people or middle-income people pay more,” he told the ABC. He has, however, enraged many people with his next comment, “Well, change to the fuel excise does exactly that; the poorest people either don’t have cars or actually don’t drive very far in many cases. But they [Labor and the Greens] are opposing what is meant to be, according to the Treasury, a progressive tax.
While it is true that for for those who indeed own more than one car – and who have no need to worry about how much fuel they use – the monetary value of the fuel excise may indeed be greater, any costs incurred by those on lower incomes would be proportionately greater in terms of their disposable income. There is also the knock-on effect of rising costs to goods and services which are transported by road, with increased fuel costs needing to be covered by someone.
Former Prime Minister, John Howard, was responsible for freezing fuel excise to counter concern over rising fuel prices. However, Joe Hockey does not seem to grasp the reality of the effect of even a small increase in costs on a household struggling to make ends meet.
Is Joe Hockey doing what is right for the economy and should he stick to his guns? Or do you think that he is far removed from the reality of how many average Australians live? Is your car fast becoming a luxury rather than a necessity?
Read more at TheGuardian.com