Fuel excise indexation: is the key issue low incomes?

The equity of the tax system should be considered as a whole, but it's worth noting the Grattan Institute calculates the poorest 20% of households could be compensated for indexation of the fuel excise if just 8% of the additional revenue raised were returned to them through the tax-transfer system.

Greens' leader Christine Milne says she opposes indexation because the Government wants to hypothecate the additional revenue to roads expenditure.

As I've explained before I think that's a weak justification; it's more about posturing than good policy. She could've avoided the charge that her party is "the left wing of the Liberals" by insisting its support would be conditional on low income earners being compensated.

Joe Hockey's blunder has likely set back the prospects for restoring indexation, but at least he's unintentionally given the neglected issue of transport disadvantage some attention.