News

Government Fails To Tackle Fuel Tax Reform

13.8.1998

Labelling the Federal Government's tax package as incomplete, the national motoring body said that it failed to tackle the key motoring issue of fuel tax reform.

 

"By proposing fuel tax rebates for business but maintaining the exorbitantly high level of petrol tax paid by motorists, the Government has in fact made the system more complex and inequitable," the Australian Automobile Association's Executive Director, Lauchlan McIntosh, said.

 

"Fuel should be taxed no differently from other goods and services," Mr McIntosh said, "and fuel excise should be replaced by a road user charge to pay for roads, road safety and environmental costs related to road use."

 

Although Mr McIntosh welcomed the prospect of cheaper cars, he warned that the benefit would be at least partly offset by higher vehicle insurance, maintenance and repair costs due to the imposition of a GST on these previously untaxed services.

 

The AAA's research showed that the majority of motorists would have preferred a cut in petrol tax as the price of a new car would still be beyond the reach of most of them, even after the proposed tax cut.

 

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