Joe Hockey continued his tirade of garnering the support of low-income households with well-thought out policy last week by proclaiming that the poorest Australians either don’t drive or don’t drive very far and thus won’t be affected by an increased fuel excise. JORDAN HYLAK explains how ‘progressive’ taxes generally take more into account than hearsay about them poor ne-er do wells. 

Last week, Joe Hockey has come out stating that poor people don’t drive cars, or if they do, they don’t drive very far. This was his justification for the fuel excise he is putting forward. As expected social media blew up, and in response I’ve tried to look at the excise from multiple perspectives to get a balanced idea of the scenario and Hockey’s reasoning.

To get my bias out of the way, I’m a resident of Western Sydney. I wouldn’t consider myself poor, but I’m not throwin’ out the ‘hunnits, hunnits’ either. In comparison to generalisations about my area however, I’m pretty well off. I’m also a car guy, a ‘motoring enthusiast’. I like cars, I like buying them, modifying them, driving them; and spending money on them. So decisions around driving and motoring issues, strike a match with me personally much more than other political matters.

Treasurer knows best. via Simpsons Against The Liberals FB

Treasurer knows best. via Simpsons Against The Liberals FB

To the matter at hand, the statement that most poor people don’t own cars is simply not true. Come to the ‘poor’ areas Mr Hockey, I’m sure you’d be surprised to see a lot of cars. They’re in the streets, driveways and roads. More importantly, the cars driven by the so called, ‘poor’ are predominantly, old, used and beaten up cars, and you know what that means? They use more petrol. They use more petrol than brand new, refined cars. They use more petrol than ‘rich people’ cars. I guarantee you, a ‘poor’ resident driving a beaten up 1994 VR Holden Commodore, pays much more in fuel then a brand new 2014 328d BMW. Not only that, when you think about the cost in proportion to income, the richest Australians spend approximately 1.4% of their income on fuel, while the lowest income households spend about 4.5%. The richest Australians can afford fuel while still living a comfortable life, but that old Commodore is really going to cost you.

A Chevy badge won’t make this any more economical

A Chevy badge won’t make this any more economical

The point I’m trying to bring across is that the excise will hit those less well-off more harshly than the rich. Even though they may or may not fill up as often as the rich, the money they do spend on it represents a greater proportion of their total income: A much greater proportion. The fuel excise is not progressive because it starts to affect the propensity for poorer people to save money, widening the wealth gap in Australia.

“The Conversation” recently did a ‘fact check’ on this subject and found that what Mr Hockey stated was supported by statistics, however, while poor-er people did own fewer cars, it was only slightly less than the average ‘rich’ person and all but a marginal few still owned at least 1 car. Mr Hockey, you may be using the wrong statistics to back your claims, it doesn’t matter if there are a higher number of rich drivers, or a lower number of poor drivers that drive long distances. Start looking at the percentage of income spent on fuel, and see how proportional it is after that is taken into account.

Source: Simpsons Against the Liberals FB

Source: Simpsons Against the Liberals FB

Moving away from the economic view of the statement, from a car enthusiasts perspective, fuel is probably one of the cheapest things to do with owning, modifying and driving a car. Between all the other costs, insurance, rego, maintenance and modifying; fuel represents a small proportion (for now). Australians spend an enormous amount of money on motoring: $78.4 billion to be exact. Car enthusiasts range from every area, race and socioeconomic background. Some have it easy, with lots of disposable income to spend on their, hobby, err, no, ‘passion’. Others however, spend every spare dime on what they enjoy. They make sacrifices in diet, housing, friends and even family for what they love, and the excise will affect them; whether they are well-off or not.[1]

From a Public Communication perspective: There were so many better ways to frame the situation. Here are just two of the ways I can think of:

1) If it is true that the funds will go directly into improving roads in Western Sydney due to the upcoming airport project, use the excise to show that it is benefiting the residents of the western suburbs, and how all other drivers are paying for the improvement of the area.

2) A fuel excise could stimulate the sales of more economical, and environmentally sound vehicles, it could represent a commitment to reducing our emissions. Liberals aren’t known for being the best enviro-warriors, but score brownie points wherever you can.[2]

The fuel excise hasn’t come into effect yet, it’s not even made it’s way through parliament, and as such we don’t know exactly what it’s going to do, if anything, and who it’s going to affect. All we have now are just guesses and estimates of our beliefs. Will we even feel the excise with petrol prices already rising at the rate they are, or will it feel like the normal inflation of prices that is already taking place? Whatever pans out, Mr Hockey, you could have handled this better.

[1] I know this isn’t the best reason, but it remains a factor of many car enthusiasts.

[2] I’m just a student but someone hire me as a PR agent/political adviser. I can frame things better then Joe Hockey…if that counts for anything

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Jordan is a 2nd year Public Communications student who enjoys playing Devils Advocate, stepping off the moral high ground and seeing life in a satirical manner. You can find more of his writing here and he tweets @Hylakkk