Full impact of fuel tax increase revealed

The National Roads & Motorists’ Association has revealed fuel costs for motorists in regional areas of NSW could increase by $372 a year by 2018, as a result of the reintroduction of indexation on the fuel tax.

For those rural drivers driving 1000 km a week in a Toyota Hilux, the federal government’s new fuel tax will cost them more than $70 in additional tax and GST over the next year and $372 annually by 2018.

Those driving 500 km a week, a Ford Falcon will pay an additional $142 annually by 2018.

Had a cap not been put on the petrol tax indexation in 2001, a driver with a Ford Falcon living in Morisset and driving to Newcastle and back each day would be paying an extra $618 in tax this year.

NRMA President Kyle Loades said that although the new fuel tax seemed small to begin with, over the years it will increase exponentially, hitting motorists from regional areas the hardest.

“If you’re a farmer living in on a large property in rural NSW, or a miner travelling from Newcastle into the Hunter for work, you’re going to be paying hundreds of dollars more in fuel tax in just a few years,” said Loades.

“If you’re driving a Mazda 3 around 300 km a week, you’ll be paying nearly $50 more annually by 2018.

“The federal government has given estimates the changes to the fuel excise will cost motorists $21 this year. However, the NRMA’s analysis shows the impact the tax will have as it increases each year with indexation and the GST impact.

“The NRMA is opposed to the federal government’s new unfair tax because Australian motorists already pay more than $15 billion annually, with around one-third being reinvested back into roads.

“Australian motorists already contribute handsomely to general revenue, and to make matters worse, even if the legislation is rejected in Parliament, it’s the oil companies who will get refunded, not the motorists who paid the tax in the first place.”

The NRMA wants to see a fairer deal for its members at the bowser and that the money raised from this tax is refunded back to motorists - not multinational oil companies.

The NRMA analysed the average fuel consumption of different vehicles travelling various distances and calculated the additional fuel tax cost of indexing fuel excise to the rate of inflation (2.5% per annum). Calculations for a Toyota Hilux 4L 4x4 (13 litres/100 km) indicate that driving 200 km per week will create an additional $74.36 burden, while heavy driving (1000 km per week) will incur a whopping $371.80. Not great news for fleet managers.