IT WAS a clanger of Latham-esque proportions.
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As cigar-chomping treasurer Joe Hockey tried furiously to parry off claims the government’s reintroduction of twice-yearly indexation of the fuel excise would punish the poor, he trotted out a line as ignorant as it was politically puerile.
“The people that actually pay the most are higher-income people, with an increase in fuel excise,” he said. “And yet the Labor Party and the Greens are opposing it ... the poorest people either don’t have cars or actually don’t drive very far in many cases.”
The response was predictably savage.
The treasurer, on the back of a budget that brutalised the poor, sick and old, had shown how breathtakingly out of touch he was. He also confirmed suspicions this government simply did not understand what it meant to be poor.
On education, on health, on taxation, conservative MPs seemed unable to think outside their own experience.
Mr Hockey refused to recant his comment, instead branding the response “hysteria”. But the numbers revealed who the hysterical one was.
Much like the GST, the fuel excise is a regressive tax, hitting our poorest at the same rate as our wealthiest.
As a proportion of income, changes to the excise will be felt more than three times as acutely by the bottom 20 per cent of earners as by the top 20 per cent.
In regional NSW, the impact will lacerate even deeper. The tyranny of distance means regional residents are forced to drive further by necessity, and hence spend more on fuel.
A damning NRMA report this week estimated a Ford Falcon driver travelling 1000km a week would be slugged $283.10 a year more by 2018 on fuel excise alone.
This is on top of North West drivers being slugged up to 20 cents a litre more for fuel than their city counterparts.
The take-home for governments is this: Small amounts of money can profoundly affect the lives of those whose incomes are not disposable.
Without that understanding, we can never truly have a government of the people, by the people and for the people.