Tassie families are spending more on transport than households anywhere else across Australia, and motorists are being slugged with some of the most expensive fuel in the country, new figures show.

The quarterly Transport Affordability Index from the Australian Automobile Association (AAA) shows families in Launceston are spending 18.1 per cent of their income on getting around and families in Hobart are spending 17.9 per cent – far higher than the national average of 14.7 per cent.

The AAA found overall transport costs declined $9.30 per week from the last quarter of 2021, but Hobart motorists were paying more at the petrol pump than residents of any other capital city, with an average weekly cost of $100.18. In Launceston costs were even higher, at $109.37.

Those costs had shot up in both Hobart and Launceston by more than $11 per week, despite the temporary halving of the federal government’s fuel excise.

AAA Managing Director Michael Bradley said the temporary halving of the fuel excise “doesn’t address long term motoring tax issues and means $3.3 billion of foregone revenue is no longer available to be spent on vital safety upgrades of our transport network”.

“The fact is given we live in an era of rapid electrification and fuel efficiency gains means fuel excise is an unfair and unsustainable tax,” he said.

The AAA is calling for the major parties to outline plans for motoring tax reform, arguing the fuel excise was not fit for the 21st century.

“The AAA is far from the only observer to note it is no longer fair or sustainable to have Australia’s notional ‘road user charge’ based on the consumption of petrol and diesel,” Mr Bradley said.

Analysis by the Grattan Institute showed the halving of the fuel excise – which is due to end in September – benefited high income households the most. High income households would benefit by $1.3 billion, while low-income households would only benefit by $0.75 billion, according to the Grattan analysis.

A new survey of 1005 Australians by the market insights company Savvy found fuel was the primary cost-of-living issue for nearly two in three respondents (64 per cent) – beating out concern about the cost of food, utilities, rent and mortgage payments. Just over half the survey respondents said they would drive less because of the cost of petrol, while 30 per cent said they would just absorb the increase.

Savvy CEO Bill Tsouvalas said rising fuel price rises would disproportionately disadvantage blue collar workers.

“Tradespeople and those who work outdoors are reliant on their ute or car to turn a profit or make their weekly wages,” Mr Tsouvalas said. “This will just add to the woes of the working class who are already feeling the brunt of rising grocery costs. The survey says that thirty per cent of respondents said they’ll just ‘absorb’ the increase. Tradespeople do not have that luxury.”

Extracted in full from: Fuel costs in Tasmania: Why Tasmanian motorists are paying top dollar for fuel | Herald Sun