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AAA renews calls for freeze on indexation of petrol.

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AAA Renews Calls for Freeze on Indexation of Petrol July 26, 2000

Following the release of the latest CPI figures showing an inflation rate of 1.7% for the first six months of 2000, the Australian Automobile Association (AAA) has renewed calls on the Government to freeze excise on petrol.

AAA Executive Director, Lauchlan McIntosh, said that the inflation rate is expected to force petrol prices up 0.65 cents per litre from the 2nd of August (leaded up by 0.73 cents).

"Motorists were unfairly treated by the Government when the GST came in. The Government undertook to reduce excise on petrol by an amount equal to the GST but instead the reduction fell 1.5 cents per litre short of that promise," he said.

"As a result, motorists have been paying 1.5 cents more in tax on every litre of petrol since the 1st July and will now face a further increase of 0.65 cents per litre in tax because of indexation. The increase will yield the Government an additional $190 million from motorists in a full year.

"The GST will also increase because it applies to excise - a tax on a tax - so unless the Government freezes excise, motorists will be paying a total of 46.6 cents per litre in tax (both GST and excise*) from the 2nd August," Mr. McIntosh said.

"And the CPI will be even higher in February when it will be calculated on the first 6 months of the GST. Based on the Government’s own Budget forecasts motorists can expect another increase of about 2 cents a litre in excise in February plus 0.2 cents in GST. This will net the Government a further $600 million in revenue from excise in a full year.

"It’s time the Government understood that motorists have had enough of being treated as a convenient source of additional revenue. Particularly when road funding has fallen by $370 million in the Budget this year.

"AAA calls on the Government to freeze excise for the first year of the GST to compensate for the unfair tax burden it has imposed on motorists in clear breach of promises made to them that petrol prices would not rise as a result of the GST," Mr. McIntosh said.

(* based on a price of 93 cents per litre ULP)


26 July, 2000

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