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AAA welcomes recommendation for fuel excise reduction under carbon tax

19.6.2011

The Australian Automobile Association (AAA) has today supported the recommendation by Professor Ross Garnaut for a reduction in fuel excise to compensate motorists for petrol price increases under a carbon tax.

In his updated Climate Change Review, Professor Garnaut has highlighted that a starting price for carbon of between $20 and $30 per tonne would result in a 5-7 cents per litre increase in the cost of petrol. He has recommended that the increase be offset for motorists through a one-off reduction in petrol excise.

AAA Technical Services Director Craig Newland said the recommendation was a step in the right direction.

"The AAA has repeatedly pointed out that motorists already pay too much in taxation," Mr Newland said.

"Fuel taxation is a significant component of motoring costs, with 38.143 cents per litre (cpl) imposed on petrol and diesel in the form of fuel excise.

"The 2010-11 Federal Budget estimated that revenue from petroleum products excise in that year would be $13.21 billion."

Mr Newland said that on average less than one-third of the revenue raised from fuel excise was reinvested back into the road network, with the remaining money ending up in consolidated revenue.

"Motorists are already paying more than their fair share of tax through fuel excise," Mr Newland said.

"The proposed cent for cent reduction in fuel excise to compensate motorists for petrol price increases under a carbon tax is a fair and sensible treatment of motorists.

"We believe the Government should also take this opportunity to conduct a comprehensive review of motoring taxation in consultation with key stakeholders."

The AAA, on behalf of its constituent clubs and 6.9 million motorists, eagerly awaited the outcomes of the Government's Multi Party Climate Change Committee.

Mr Newland said.

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