Government Must End Indexation Discrimination


The Australian Automobile Association has called on the Commonwealth Government to stop discriminating against motorists through petrol indexation.

According to AAA Executive Director, Lauchlan McIntosh, indexation in its current form is a completely unjustified imposition on motorists, which will become grossly unfair and discriminatory when the GST commences.

"The Government plans to apply the GST to excise increases which means it will be a tax on a tax, forcing petrol prices up at a higher rate than inflation," Mr McIntosh said.

"Petrol rose by approximately 0.7 cents a litre today as a result of indexation, putting at least $110 million extra in the Government's pocket over the next year. If the GST had already been in place the increase would have been 0.77 cents, boosting the Government's take to over $120 million.

"The GST introduction will increase the inflation rate so motorists can expect a substantial jump in petrol excise in twelve months," he said.

"Over a number of years this tax on a tax will continue to compound, costing motorists hundreds of millions of dollars and providing the government with a huge, growing hidden revenue base.

"Perversely the Government has tried to justify its GST-indexation grab by saying pensions are also indexed. Perhaps Ministers should consider that pensioners also drive so they too will be caught by this tax on a tax on motorists.

"There can be no possible justification for this double taxation approach planned for motorists under the GST and the Government needs to urgently rethink this aspect of the GST introduction.

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