UNDER THE PUMP

By Malcolm Farr
news.com.au
March 14, 2012

MOTORISTS are being milked to help the Government get its Budget to surplus, according to an analysis of petrol excise revenue.

Drivers taxed almost 40 cents on a litre of fuel will get less than nine cents back in the form of spending on roads next financial year, according to calculations by the national motorists’ umbrella group.

The rest of the tax revenue – worth close to $10 billion – will go towards helping the Government reach the $1.5 billion surplus it has promised for 2012-13.

The Australian Automobile Association has told the Government it is concerned that funding for road building and improvements will be cut by 38 per cent, or more than $2.6 billion in the coming Budget year.

This was based on calculations using the Government’s own forward spending projections.

“Over a four-year period it is projected that there will be a $36 billion shortfall between the amount of fuel tax paid by motorists and investment in land transport infrastructure,” the AAA said in its Budget submission to Treasurer Wayne Swan.

The AAA calculates the Government will get $57 billion in fuel excise from motorists over the next four years and invest just $21 billion in land transport.

The revenue comes from the 38.1 cents-per-litre (cpl) fuel excise which has been frozen since 2001.

In 2011-12 the excise will provide 15.9 cpl for road funding, the AAA has calculated. But in 2012-13 that will fall to 8.4 cpl for roads, and will rise by only two cents over the next three years.

“The Federal Government continues to direct surplus revenue from motorists to consolidated revenue even though transport expenditure is falling,” said the AAA Budget submission.

“The AAA is concerned that the share of fuel excise being directed to road funding is projected to fall from 15.9 cpl in 2011-12 to an average of just 10.9 cpl over the Budget forward estimates.”

The Government is not obliged to allocate a set slice from its 38.1 cpl fuel excise to road and rail projects, but motoring groups have consistently demanded a significant amount be returned to road users.

However, the heavy reliance by this and past governments on the excise to bulk up the general spending pool has meant that most of the revenue is used elsewhere, and drivers paying $1.50 a litre cannot expect a tax cut.

And much of the road funding in the coming financial year will go towards repairing flood damage, which the NSW Government has estimated will cost $500 million in its state alone.

The AAA said more money should go to reducing road accidents it says cost the national economy $27 billion a year.

It called on the Government to spend more on fixing “black spot” road stretches with a bad record for accidents.

The national road toll is close to 1400 deaths a year with more than 30,000 people seriously injured.