Just why do we want to fight for cheaper fuel?

  • The 'knock on' or multiplier effect of increased fuel prices.
    When the price of fuel increases, so does the cost of farming.
    When the price of fuel increases, so does the cost of freight.
    And all these increases are passed on to us; the consumer.

  • The fuel taxes are a tax on low income families and small business.
    Some would say it is a fair tax. Everyone pays the same, regardless of income.
    But this is a fallacy.

    Even if low and middle income families were to travel the same distance,
    the amount of tax they pay is a far greater proportion of their income compared to high income earners.

    • Example 1: A person earning $50,000 drives 30,000 km per year in a car averaging 10 litres/100 km
      That equals 3000 litres or $3546.00 based on today's price of $1.182 per litre.
      The tax on this is 1) the excise of $1144.29 and 2) the GST is $322.36 making a total tax of $1466.65
      As a percentage of income, this is 2.93 %

    • Example 2: A person earning $500,000 drives 30,000 km per year in a car averaging 10 litres/100 km
      That equals 3000 litres or $3546.00 based on today's price of $1.182 per litre.
      The tax on this is 1) the excise of $1144.29 and 2) the GST is $322.36 making a total tax of $1466.65
      As a percentage of income, this is 0.29 %

    • Example 3: A Single pensioner receiving $20,088 (including the Pension Supplement) drives 30,000 km per year in a car averaging 10 litres/100 km
      That equals 3000 litres or $3546.00 based on today's price of $1.182 per litre.
      The tax on this is 1) the excise of $1144.29 and 2) the GST is $322.36 making a total tax of $1466.65
      As a percentage of income, this is 8.05 %

    • It's a Regressive tax: People on lower incomes in effect pay MORE tax than people on higher incomes.
      How can this possibly be a "fair" tax?
      The more you earn, the less tax you pay?

  • Almost everything you can think of has a component of transport in it. 
    In fact, almost all the goods we buy have to be transported from somewhere. 

    Some would argue that services, like banking, telephone or electricity do not.
    But banks use couriers and armoured vehicles
    Telephone companies have vans and trucks on the road for installations and maintenance.
    Electricity is generated using coal, which has to be mined and then transported.
    Any increase in costs will be passed on to us, the consumer.

    Consequently, when fuel increases, so does the cost of eggs, milk, fruit and vegetables, banking, electricity, in short, just about everything.
    If we lower the cost of fuel, most goods and services can be cheaper.

  • Therefore: Increasing the price of fuel results in inflation.

    When inflation is too high, the Reserve Bank (RBA) has to increase interest rates, to fight inflation.
    Mortgages go up, standard of living goes down.

So why doesn't our Government reduce the Excise and GST on fuel?

The government has a vested interest in keeping the cost of fuel high.
The GST on fuel is fixed at 10% and can not be changed without changing the law and the consent of the States.
But 10% on 80 cents a litre is 8 cents. (Back in 2005)
10% on $1.30 is 13 cents.
Presto: An increase in the GST of 5 cents per litre, without changing the law.
It's a tax increase by stealth.

Based on (government figures(1), in 2008-2009 Australian paid $7.650 Billion dollars in excise on petrol alone.
Add to that the $7.050 Billion excise on Diesel fuel.

This equates to some 34 billion litres. At 5 cents GST per litre extra, that's a windfall
(some would say a "Super Profit") for the Government of more then $1.7 Billion dollars,
on top of what they were collecting in the first place.
Add to that the additional GST on the now increased price of goods and
you see why the government is laughing all the way to the bank.

An increase in fuel price is a tax on those people that can least afford it.
Rich people can afford to buy a fuel efficient hybrid car.
The fuel efficiency is certainly impressive. 4.4 litres per 100 km ( 22.7 km per litre).
50% more economical then an equivalent sized car.
However at a RRP of over $40,000 it's well out of the reach of the average person.

In the meantime, the young, the elderly, the unemployed, and anyone who can't afford it, drive in older, less efficient cars and pay through the nose.
On top of that they now pay more for their mortgages.
(and if they are renting, they pay more for their rent, because the landlord has to pay more for his mortgage)

Politicians either just don't care, or just don't get it.
They get a government car and/or a travel allowance. (see side panel)
Which, I am sure, will be adjusted for the increase in the price of fuel.

 

Every now and then, a committee is appointed by the Government to form a task force, to investigate and report on petrol prices.
We have had over 30 of these and -

Nothing happened.

Although the Rudd Government did appoint the first "Petrol Commissioner" but -

Nothing happened.

And of course Mr Rudd announced "Fuel Watch" but -

Nothing happened.

The Gillard Government?

Nothing; although they did promise not to increase fuel prices with their new Carbon-tax

 

We believe it's simple:

Ms Gillard; It's our money - We want it back.

 

notes:

[1]

Table 7: Excise and customs revenue

Table 7:  Excise and customs revenue

 

Australia uses about 300 Million Barrels of crude oil each year. That's 47.7 Billion litres. Not all of this is turned into petrol, but almost all gets the GST..