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Media release

Motorists shortchanged on excise spend


Motorists have been shortchanged by around $3 billion in the past year as the Federal Government fails to deliver its own target for reinvesting fuel excise into land transport infrastructure.

Australia’s peak motoring body says motorists have been shortchanged by around $3 billion in the past year because the Federal Government failed to deliver its own target for reinvestment of fuel excise in Australia’s land transport infrastructure.

In the October 2022 Budget the Government said it would spend $12.45 billion on land transport infrastructure, which would have been equivalent to 91 per cent of the fuel excise collected from motorists in the 2022-23 financial year.

But the Final Budget Outcome analysis released today showed the Commonwealth collected $14 billion in fuel excise but delivered only 68 per cent – or $9.5 billion – on land transport funding, including roads.

Australian Automobile Association Managing Director Michael Bradley said if the Government had delivered funding consistent with the percentage reinvestment of excise in its Budget undertaking, it could have spent an extra $3.26 billion on land transport improvements.

“We’ve got a road safety crisis happening in Australian right now and part of the response we need is more investment in roads and maintenance,’’ Mr Bradley said.

“Just this week the Bureau of Infrastructure, Transport and Regional Economics said the road toll was up 8.4 per cent in the year to the end of August, with some states up by more than 20 per cent and cyclist deaths up 37.1 per cent.

“Motorists pay 48.8 cents in excise for every litre of fuel they buy and motorists expect every cent of that money to be spent on making our land transport system safer and more productive.’’

Fuel excise was introduced in 1901 as a tax on motorists to fund road construction and maintenance. But for decades governments have failed to invest all excise receipts into land transport, instead using the tax as a general revenue raiser.

“We’ve seen governments use fuel excise as a general cash cow for years,’’ Mr Bradley said.

“It was good news when the Government used its first budget to commit to investing the equivalent of 91 per cent of expected excise receipts into land transport infrastructure, given that over the previous decade, excise reinvestment averaged just 56 per cent,’’ Mr Bradley said.

“But it is disappointing and frustrating that it has been unable to deliver.’’

Mr Bradley said the Federal Government relied upon state and territory governments to build roads and was therefore subject to capacity constraints within different jurisdictions, including issues like labour shortages.

“But these constraints have hampered investment for years. It’s time all governments refocused their attention on delivering the funding they promise to make our roads safer, less congested, and more useful in driving economic productivity gains.’’

AAA Media contact:  Matthew Franklin, Director – External Affairs, 0411 659 868  [email protected]

The AAA is the nation’s peak motoring body, representing Australia’s state-based motoring clubs and their 8.9 million members. It is an apolitical and technology-neutral advocate for federal transport policy that improves safety, affordability, and mobility.

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