Petrol tax: progressive or regressive> Check the facts
Treasurer Joe Hockey has said “the poorest people either don’t have cars or actually don’t drive very far in many cases.” The Treasure also said that the fuel excise is a “progressive tax”.
The Treasurer defended his statement saying “I can only get the facts out there and explain the facts, how people interpret them is up to them”.
So let us consider how much households spend on fuel.
Selected household income and expenditure data by quintile (2009-10).
| Lowest | Second | Third | Fourth | Highest | |
| Average weekly household expenditure on petrol ($) | 16.36 | 27.60 | 38.55 | 47.00 | 53.87 |
| Average weekly household disposable income ($) | 522 | 909 | 1,276 | 1,756 | 3,189 |
| Petrol as a share of income (%) | 3.1 | 3.0 | 3.0 | 2.7 | 1.7 |
Assuming for one moment that every household had $100 to spend each week, the lowest 20 per cent of households would spend $3.10 on fuel compared with the highest 20 per cent who would only spend $1.70.
Of course, the data also shows that the top 20 per cent actually spent more ($53.87) on fuel than households with the lowest income at $16.36. This fact reflects another fact; the wealthy have more money to spend. Six times as much.
It is the relative proportion of income spent on fuel and not how much that is spent that will determine the impact any increase in the fuel excise would have on family budgets.
As poorer households spend proportionally more of their disposable household income on fuel an increase in the fuel excise will represent a larger cost burden for them than it will for households with more money to spend.
A progressive tax is one in which “the average rate of tax increases as income increases” whereas a regressive tax sees “the average rate of tax decreases as income increases”. Therefore, any increase in the fuel excise is a regressive tax increase rather than a progressive tax as claimed by the Treasurer.
Also, I know many elderly on pensions or others on DSP who have had to move to country towns as the rent is cheaper, but having to spend more on fuel because they are more isolated
How many on higher incomes can claim fuel costs as a tax deduction and how many use Company Cars?
Mr Hockey…Take that fricken silver spoon out of your fricken mouth!!! You have clesrly NEVER been underprivileged in your life so therefore you have absolutely NO grasp of financial reality whatsoever. How about you ask the advice of someone who actually knows what they’re doing…BEFORE you CRIPPLE those Poor people you despise so much!
Of course you can make the same arguement about any tax other than income tax. Poor people spend a much higher percentage of their income on GST or the tax on alcohol or the increases to living costs due to the carbon tax etc.