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.
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…