Joe Hockey has warned that the government may need to take even tougher measures as he feels the backlash from his “poor people don’t have cars” comments.
Having riled even coalition colleagues with his comments about the fuel tax, Treasurer Joe Hockey is now warning everyone else they may have to swallow tougher budget measures.
His suggestion that poor people won’t feel the impact of the return of twice-yearly hikes in the fuel excise – because they either don’t have a car or don’t drive far – has sparked an angry backlash from rural government MPs.
Nationals senator John Williams says people in the bush need cars, a point echoed by Liberal Ian Macdonald.
“You have to have a car whether you’re rich or poor,” Senator Macdonald told ABC Radio on Thursday.
But Mr Hockey is not running away from his argument that richer households pay three times more in fuel taxes than the poorest because they own more cars and drive further.
However, he now concedes there may be proportional impacts because the excise is applied equally to everyone’s purchase of petrol.
“That is the case with any indirect tax,” he told ABC radio on Thursday.
Mr Hockey also argued that every dollar from the fuel excise increase would help to build new roads, helping create jobs and boost productivity.
Labor and the Greens oppose the measure, saying it will hit low-income families the hardest.
Shadow treasurer Chris Bowen challenged Mr Hockey to go to Western Sydney and tell the people on low incomes they don’t drive cars.
“He just keeps showing he fundamentally misunderstands the impact of his budget,” he told reporters in Cabramatta.
Even NSW Premier Mike Baird was not convinced about the treasurer’s reasoning, telling reporters in Sydney: “I can’t agree with those comments”.
Cabinet colleague Peter Dutton came to Mr Hockey’s defence, denying the government was out of touch with ordinary people.
“These are tough days, but the fact is that the government has a task to do, and I think Australians respect that fact,” he told ABC radio.
Mr Hockey warned the government may have to take even harsher measures if his budget measures continue to be frustrated by the Senate.
The government appears to have already lost $5 billion in revenue because of its failure to pass 16 initiatives on time.
They include the fuel tax rise, welfare changes affecting under-30s, an increase to the medicines co-payment and cutting spending linked to the mining tax.
“The bottom line is, if we don’t make our spending affordable now, then the cost of dealing with it in the future will be much greater,” Mr Hockey said.