AAA Welcomes ALP Commitment Not To Re-Introduce Indexation


The Australian Automobile Association has welcomed an undertaking from the ALP that it would not re-introduce fuel indexation if elected.


The decision matches a similar commitment from the Coalition today and means motorists will pay around $4 billion less in fuel tax over the next four years.


The AAA has, however, expressed some concerns about aspects of the ALP’s Fuel policy. While greater transparency is welcome, the AAA has concerns about the possible re-introduction of maximum wholesale price capping.


AAA Executive Director, Lauchlan McIntosh, said that it was clear from his organisations long-term monitoring of petrol prices that less regulation rather than greater regulation lead to lower petrol prices.


Mr. McIntosh said the key to lower fuel prices was greater competition and motorists would therefore be concerned by any moves that reduced competition.


Mr. McIntosh said he was also concerned about suggestions of price manipulation on public holidays. "While price hikes at weekends and on public holidays annoy us all, they are generally part of the normal price cycle and interference with the cycle is likely to reduce discounting.


"We could end up with a situation where prices flatten somewhat but on average are higher," Mr. McIntosh said.


"Terminal gate pricing would be a positive step provided it is done the right way and strengthening the ACCC’s powers to police petrol pricing is welcome.


"AAA does, however, have a concern about the strong commitment the ALP has given to maintaining the current fuel tax system. That commitment would seem to rule out adopting any recommendations for change that may come from the current fuel tax inquiry.


"AAA and the State and Territory Motoring Clubs have argued strongly that the current fuel tax system is unfair and needs substantial reform as detailed in our submission to the Fuel Tax Inquiry," Mr. McIntosh said.


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