Poor people don't drive as much: Hockey

High income earners will bear the burden of increases to the fuel excise says the Treasurer.
Treasurer Joe Hockey is facing a fresh round of criticism for
being out of touch and not understanding the impact of his budget on
the less well off after suggesting “poorest people either don't have
cars or actually don't drive very far in many cases”.

Mr Hockey made the comments on Wednesday as he argued the
government's proposed rise in fuel excise was a progressive measure that
would cost people on middle and higher incomes more.

The Treasurer said the Coalition was asking "everyone to
contribute, including higher income people" by restarting indexation of
fuel excise, a measure Labor has labelled a new fuel tax.

Contrary to Mr Hockey's claim, a 2001 research paper from the
Parliamentary Library states that "petrol and diesel excises are
regressive in that people on low incomes pay a higher proportion of
their incomes in the form of excise than people on high incomes, given
the same level of fuel use".

And in a June 2014 submission to the Senate Economics
Committee inquiry into the proposed excise rise, the Australian
Automobile Association stated that: "Research indicates that the people
who use their cars most frequently are in the outer metropolitan areas
and  rural and regional areas where there are lower incomes, less jobs,
and little or no access to public transport"

"The AAA is concerned that individuals in these areas will bear the highest cost increases of indexation changes."

Labor leader Bill Shorten, welfare groups and crossbench
senator Ricky Muir have rounded on Mr Hockey, labelling the Treasurer's
suggestion fallacious and based on incorrect assumptions.

“Are you serious, Joe Hockey? Are you really the cigar
chomping, Foghorn Leghorn of Australian politics where you're saying
that poor people don't drive cars?," Mr Shorten said.

“Joe Hockey says [poorer Australians] don't drive cars yet
they don't give them another alternative. It is almost as if the
Treasurer believes that poor people should be sleeping in their cars,
not driving their cars.”

St Vincent de Paul Society chief executive John Falzon said the claim was “completely fallacious”.

“This is a massive assumption on the Treasurer's part. In
fact many low income households are heavily dependent on quite old motor
vehicles that are not terribly fuel efficient as their only means of
transport," he said.

“Cheaper housing is often located in areas far from necessary
infrastructure and jobs and so they find themselves having to travel
long distances at times. And they are often very poorly served by public

Uniting Care National Director Lin Hatfield-Dodds said the rise in fuel excise would disproportionately affect poorer people.

“Proportional to their income, these sorts of measures end up
costing people who are poor more than people who are wealthy," she

“That's just maths,' she said

“To put the fuel excise up as an example of fairness in the
budget is a bit of a stretch, if we want to make the budget fairer we
could look at less impact overall on vulnerable Australians and more
impact on people who can afford to meet the costs.”

Australian Motoring Enthusiast Party Senator Ricky Muir said
that in rural and regional areas, people needed to use their cars,
"regardless of wealth".

"Coming from the country, I know firsthand, when you live a
fair distance from work and there's no public transport, people from all
backgrounds use their vehicles a lot."

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