Abbott’s $2.2 billion cost of living ambush on households - Terri Butler MP, Labor for Griffith

Abbott’s $2.2 billion cost of living ambush on households

From today, Australians will pay more for petrol, after the Abbott Government’s petrol tax ambush.

And there are more increases to come, on 1 February and 1 August next year.

The indexation of the petrol tax to CPI by the Abbott Government means Australians will pay around $19 billion more for petrol over the next decade.

As passenger vehicles make up more than three quarters of all registered vehicles, the new petrol tax will be a direct hit to households.

It’s yet another cost of living burden on households already struggling with increasing costs.

Consumer group Choice’s most recent Pulse report – published just before the government’s recent petrol tax ambush – as households’ second biggest cost-of-living concern.

The report showed that even though fuel had become less of a worry for consumers, since Choice’s June survey, it was still worrying three quarters of households.

If they were concerned before the petrol tax ambush, imagine how worried households are now that the cost of petrol is being jacked up.

This tax will hit households on low and middle incomes. The Treasurer, Mr Hockey, might think that poor people don’t drive cars, but the fact is that people on low and middle incomes drive to work and study.

More than 70 per cent of Australians drive, or catch a lift, to work or study. Half of them do so because they can’t get public transport, or they can’t get it at the right time.

No one who uses a car to get to work or study will thank the Abbott Government for imposing this new tax. The Government knows that all too well – they couldn’t get this fuel hike through the Senate so they have bypassed Parliament completely.

It’s much harder for people on low- and middle-incomes to bear the additional cost than it is for wealthier households.  And it will hit regional households, in areas where public transport isn’t an option.

Research from The Australia Institute shows that the poorest 20 per cent of households spend about three times the proportion of their income on fuel than do those in the richest 20 per cent.

For Labor, concern about extra costs - like the petrol tax - is matched by an equal concern about household incomes.

At the same time as the Government’s adding this new expense, wages growth remains very slow: the Reserve Bank says that wage growth is the lowest it has been since the late 1990s, when the wage price index was first published.

When you combine slow wages growth with high levels of unemployment and underemployment, and worries about whether any job is really secure in Australia nowadays, it’s no wonder that households are under pressure.

So Australians are taking cost of living hits from both directions. On the costs side of the ledger, households are bearing expenses like private health insurance, energy costs (Choice found 59 per cent of households say that the carbon price repeal made no difference to their expenses), water costs, food and groceries, car insurance, and now this new petrol tax hike. And on the income side, wages growth is slow, and secure jobs, with enough hours, are getting harder to come by.

As chair of Labor’s Cost of Living committee, I’ll be paying particular attention to how the new petrol tax affects households. And our committee also has an eye to the next slug on households – the Abbott Government’s signals about broadening the base of the GST, and increasing it. Imagine the added pressure from higher grocery bills and school fees.

Labor cares about cost of living because of the way that pressure on household budgets affects equality, dignity and fairness. When it gets harder to manage living costs, it becomes much harder for households to get ahead. So we talk about cost-of-living because we believe low- and middle-income households should share, fairly, in Australia’s prosperity. We believe in the fair go.

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