AAA Welcomes Government Rejection of Fuel Indexation


The Australian Automobile Association has welcomed the Government’s decision to reject the re-introduction of fuel indexation.


AAA Executive Director, Lauchlan McIntosh, said tonight that it was clear the Government had accepted, once and for all, that indexation was an unfair impost on road users.


Mr. McIntosh said that if indexation had remained in place, motorists would now be paying three cents per litre more for fuel and the Government would be taking an extra Billion dollars per year from them.


He said now that the Fuel Tax Inquiry Report had been released, the AAA was looking forward to a serious debate about a new fuel tax system for Australia.


"Fuel taxation arrangements in Australia have a number of serious shortcomings, are regressive, and subject to a raft of various methods of application and subsidies", he said.


"The GST was introduced to generate increasing revenue and broaden the tax base. Keeping the existing fuel excise goes against the principle of taxing all goods and services equally.


"Many studies point to the fact that motorists "pay their way" including the costs of road wear, safety and environmental impacts and revenue from road users should be directly linked to road investment.


"The GST is applied to the excise (a "tax on a tax"), and as the economy grows fuel sales increase, excise revenue increases and tax increases. Indexation would have been a double whammy.


"Reform of the fuel tax system is overdue and essential. A properly structured road user charge is needed to replace the excise, and like other charges be subject to the 10% GST" Mr. McIntosh said.

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