Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Hansard source

On 14 March 2012 he said:

What you'll get under us are tax cuts without new taxes.

Again, he was clearly misleading Australians. The member for Herbert asked me whether I am going to spend a full half-hour talking about this. I say to the member for Herbert: I am not, but I could, because there is enough material on the public record from your leader saying that he would keep his promises, saying that he would not raise taxes, and yet that is exactly what Australians have been slugged with.

We are debating today a measure which arises directly from yet another broken promise among the litany of cuts to health and education to the tune of $80 billion, and cuts to the ABC—seeing great ABC workers losing their jobs, cutting the Stateline programs and cutting Bush Telegraph,which is so important for regional communities. But, as they have gone about trying to break this election promise, the government have blundered yet again. The once shiny Treasurer is not so shiny after he drove directly into a fuel tax blunder. Let me quote very clearly what the member for North Sydney told ABC radio in regard to the fuel tax:

What we’re asking is for everyone to contribute, including higher income people. Now, I’ll give you one example: the change to fuel excise, the people that actually pay the most are higher income people, with an increase in fuel excise and yet, the Labor Party and the Greens are opposing it. They say you’ve got to have wealthier people or middle-income people pay more. Well, change to the fuel excise does exactly that; the poorest people either don’t have cars or actually don’t drive very far in many cases. But, they are opposing what is meant to be, according to the Treasury, a progressive tax.

Let us step through those claims that the poorest people either do not have cars or do not drive very far, and that the fuel excise is a progressive tax. I am indebted here to an ABC Fact Check,updated on 28 October 2014, which rates this claim overall as 'misleading'. First of all, the claim that poor people do not have cars: in a media release accompanying this extraordinary claim, Mr Hockey published a chart showing that 35 per cent of the lowest income households did not have cars. This is somewhat surprising, because there is an Australian Bureau of Statistics publication called Car Nation, which finds that only 15 per cent of those in the bottom income range do not have cars. That is 35 per cent in one and 15 per cent in the other; there are slightly different measures of low income, but that is a big difference. So ABC Fact Checklooked into it, and it turned out that the way in which Treasury had boosted the share of households that did not have a car was by assuming that if you answered 'not stated' or 'not applicable' to the question, then you did not have a car. They contacted the Australian Bureau of Statistics about this and the Australian Bureau of Statistics frankly said that they would not make those sorts of assumptions. They would not try to inflate statistics on the share of Australians without a car by assuming that, if you did not answer the question, you did not have a car. But, even if we take the government at face value, their own statistics show that in the poorest income group two-thirds of households had a car. It is probably an underestimate; it is probably more like 80 per cent of those in the bottom-income groups that have cars. Clearly, any way you cut the data, poor people drive.

What about the claim that they do not drive very far? We turn to Professor Graham Currie from the Institute of Transport Studies at Monash University. He conducted research in 2008 on average travel distances for people who live on the urban fringe of Melbourne and for inner-area residents. It is not a perfect measure of low and high income, but we do know that inner-urban residents tend to have higher average incomes than those on the urban fringe. The typical travel distance for those in the inner areas is 6.4 kilometres a trip and for those in outer fringe areas is 16.4 kilometres a trip. The implication, as Professor Curries puts it, is that 'They have higher costs for travel and longer travel times.' Professor Currie also points out that people on the urban fringe are more likely to be travelling by car because there is very little public transport. So, on the inner fringe, a much higher share of trips are by public transport than in inner areas. Again, poor people have cars and poor people drive further.

What about this extraordinary claim that the petrol tax is a progressive tax? What is the definition of a progressive tax? As any economist will tell you, it is a tax where the share of total income is higher for those at the top of the distribution than for those at the bottom of the distribution. Is that the data that the Treasurer produced? No, I am afraid not. The data that the Treasurer produced was dollar expenditure. He showed that higher income Australians spend more on fuel. This is absolutely true. But that is not what we are talking about here. Of course higher income Australians spend more on fuel. Higher income Australians spend more on just about anything. In the 2009-10 household expenditure survey there are 593 items, and for 580 of the 593 items the rich spend more than the poor. There are only 13 items for which the poor spend more than the rich. The point of a progressive tax, as any Treasurer who knows his economics would know, is that the share of income is higher for the top than for the bottom, and this is very clearly a tax whose burden falls more heavily on the bottom than the top.

If you look carefully at household expenditure statistics, petrol accounts for a higher share of spending among low-income households than high-income households. Fuel tax is therefore a modestly regressive tax. So, on all three counts, poor people drive cars, they drive further and they spend a larger share of their income on fuel, and it might be reasonable if the Treasurer were to say, 'Well, I know it's a regressive tax. I know it'll hit the poor hardest. But I've put in place a compensation mechanism to look after the most vulnerable, to protect them from the impact of my regressive fuel tax increase.' But that is not what this budget did. This is one measure amidst an extraordinarily regressive budget, possibly the most regressive budget that Australia has ever seen.

This is entirely unlike what happened when a carbon price was introduced in Australia, when a household assistance package ensured that nine out of 10 Australian households received household assistance and that those at the bottom received more in disposable incomes after the package than before the package. No, this is a regressive fuel tax accompanied by a regressive budget. NATSEM analysis looking to 2017-18 analyses the change in disposable income of 18 different budget measures. That does not include the GP co-payment, but it does include the changes in family tax benefits, the clean energy supplement freeze, the changes to Newstart, the pensioner education supplement and senior supplement removal, dependent spouse tax offset removal and the changes in fuel tax indexation.

The poorest couples with children, those in the bottom fifth of the income distribution, lose 6.6 per cent of their disposable income. This is a huge whack to these households, losing more than one dollar in 20 out of their incomes. The poorest single parents, the single parents in the bottom fifth of the income distribution, lose 10.8 per cent of their disposable income. What an extraordinary government it is that would think that it is all right to look at the poorest single mums in Australia and take one dollar of every 10 out of their wallets. No government in Australian history has ever been so brutal to Australian low-income single parents as has this government in taking one dollar in 10 from the pockets of these households. Think of a single parent family on $65,000 a year. They are losing something in the order of $6,000. That is a massive whack to the most vulnerable Australians.

We on this side of the House are not supporting the change in indexation to the fuel excise because it is a broken promise. The poorest people do have cars, do drive further and do spend more on fuel. This is not, as the Treasurer has claimed, a progressive tax. The indexation of the petrol tax to CPI means Australians will pay about $19 billion more for petrol over the next decade.

Labor strongly opposes the re-indexation of the fuel excise, but we will be supporting this measure because we are willing to work with the government to implement sensible changes to our tax system. We are supporting this bill because if we did not it would see eligible businesses being punished unfairly by this government's fuel tax increase. This is a government, though, that has snuck its fuel tax change through. Knowing that it could not get it through the parliament, knowing that it would not be able to get it through the Senate, this government, instead, bypassed parliament and increased fuel tax by regulation.

They would have you believe that this is the same as what Labor did with the excise increase on alcopops. That is palpably not the case.

Government members interjecting—

With alcopops, as members on the other side have helpfully noted, it was a health measure. It did not aim to hurt the poor; it aimed to assist the poor and reduce binge drinking. But the principle is also different. In the case of alcopops, there was a broad indication of support that the measure would eventually pass the parliament, which it eventually did.

Let's face it, there is no broad indication that a fuel tax increase would ever pass this parliament. The government's unfair agenda is foundering in the Senate and no-one seriously believes that this measure will eventually be legislated. If the government is not able to pass legislation to ratify its fuel tariff proposals, businesses will be required to pay back the excess to the Tax Office. That has been raised as a concern by stakeholders in their submission to the Senate Economics Committee's inquiry into the bill. In fact, the Australian Trucking Association has raised the issue. They have said:

Requiring operators to pay back their extra fuel tax credits would only make sense if they could also claim back the extra fuel tax they paid.

This will not be the case, as the money will be refunded to fuel manufacturers and fuel importers. It is a slapdash approach to policy making, where the government does not consult with the opposition, and it ultimately leads to worse outcomes for all Australians.

We are an opposition that opposes arbitrary increases in fuel taxes, but we are not a wrecking opposition; we are working constructively with the government to ensure that eligible Australian businesses are not unduly punished by the way in which this government has ham-fistedly attempted to go about implementing its policies.

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