Yesterday, Treasurer Joe Hockey said his proposed increase in fuel excise won’t affect the poor as much as high and middle income earners because:
the poorest people either don’t have cars or actually don’t drive very far in many cases”
Unfortunately for Joe, the data just doesn’t support his claim. I looked at the 2009-10 Australian Bureau of Statistics data and did some calculations. As you can see below, poor people are hit FAR harder than middle-class and rich people.
Fuel spend as a % of net worth
Poor Australians spend 45 times as much on fuel as rich Australians (as a % of their net worth).
This graph is divided into 5 equal groups (‘quintiles’), by how much they’re worth – total assets minus total liabilities. The ‘Lowest’ quintile represents the poorest people.
Fuel spend as a % of gross household income
Poor Australians spend 3.4 times as much on fuel as rich Australians (as a % of their income).
This graph is divided into 5 equal groups (‘quintiles’), by how much they earn per week, before tax. The ‘Lowest’ quintile represents the poorest people.
Data sources
As mentioned above, I used ABS data to derive my calculations. Here are the tables and rows I used, if you’d like to double-check me:
- Fuel spend as a % of net worth – came from 65300do001_200910.xls TABLE 8, ROW 9 and 65300_detailed_tables_2009-10.xls, 7A, ROWS 535-537.
- Fuel spend as a % of gross household income – came from 65300do001_200910.xls TABLE 4, ROW 8 and 65300_detailed_tables_2009-10.xls, 3A, ROWS 535-537.
These file names and row details will make sense to you once you download the files (‘HES 2009–10 Detailed tables’ and ‘Australia_Data_Tables_2009-10’ from the ABS site.)
Do you think Joe is lying or just ignorant?
This government has certainly shown it’s very happy to lie. But I’m not sure if Joe’s lying in this case, or just ignorant. Either way, it’s a good insight into Joe’s world view…
This is plain STUPID, you have manipulated figures when the actual truth is dollar for dollar a high income earner spends more on fuel each week. We have the 6.2 litre V8’s not the 1.6 litre 4’s and have the money to drive more miles. Twist it how you like but the facts are facts. Real poor people don’t own cars, they catch public transport.
Hi Wane, thanks for your comment. I’m afraid your opinion simply isn’t backed by the facts. As you can see from the actual data, Australia’s poorest 20% spend a greater proportion of their money (and their wealth) on fuel. Simple. Whether you think they do or don’t have cars is irrelevant. The facts are clear.
So when Joe says his proposed increase in fuel excise won’t hit the poor as much as high and middle income earners, he lying (or just ignorant). The hit will be proportionally much greater, because more of their money will be taxed.
Wayne, ‘real’ poor people overwhelmingly live where there is little or no public transport available – rural and regional areas, and outer suburbs. Inner suburbs, well served by PT, walkable and bikeable, are largely the domain of the well-off.
I’d be very interested to see the statistics on car use. I haven’t looked. But I know his assertion is factually incorrect. The graphs above prove that. So whether his statement about cars is correct or incorrect, what he’s saying is clearly wrong. So wrong.
Good job. I can’t say I am surprised.
I think “good old Joe” is using the simple “total cash spent on fuel”, in which case I am sure the rich spend more, but like you demonstrate, it’s not about how much you spend on fuel, it’s about how much you spend as a proportion of your income.
It’s pretty basic stuff, and you have to think that Joe knows this, but quite frankly my dear, doesn’t give a damn…
Exactly right, Chris. Thanks for your comment. 🙂
There’s a good solid fact check on this on The Conversation https://theconversation.com/factcheck-do-poor-people-drive-less-30509
That is a good solid fact check. Thanks. I’ve shared too. 🙂
You asked, Glenn if Joe was lying or ignorant. I think he was extremely sloppy and lazy.
We are on DSP/carers…so we are relatively poor in many ways.
We live in a small hamlet and our nearest hospitals are 34klm and 40klm away. We have one bus service once a day. We do not have family nearby. We own two ‘bombs’ of cars ( worth less than $5000 combined so that we can have at least one mode of transport ok at all times for appointments with doctors specialists physio and medical supplies at all times.
I think this is where Joe’s ignorance kicks in, the reality of we who live as simply and as well as we can on restrictive pensions. We filled up our car ( we live in an area of high petrol prices) and it cost $60. That is a HUGE proportion of our fortnightly income. The other car we never fill up but put in $20 for a month for ‘back up’.
Just thought I would back up your statistics and proof with anecdotal evidence.
Thanks Abbie. Great example.
Sorry to hear you’re doing it tough, though! 🙁