Sunday 4 December 2016

Danger of motorists being hit in Budget for all wrong reasons

* Huge numbers stuck with old cars and fuel price increase would hit them the hardest

Published 07/10/2015 | 02:30

There are fears that the Government may target drivers in the upcoming Budget after the switch to an emissions-based system slashed the revenue collected from VRT and road tax.
There are fears that the Government may target drivers in the upcoming Budget after the switch to an emissions-based system slashed the revenue collected from VRT and road tax.
Finance Minister Michael Noonan

The temptation to apply a little bit more tax to motoring in next week's Budget must be mighty for those tasked with funnelling even more revenue into Government coffers.

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Especially at a time when the Volkswagen scandal has cast a perceived shadow over diesel in general.

I never thought there were so many people who hated the fuel so much.

It would be so easy for the Government to use elements of a public mood to sneak in with an increase in the road-tax bands, for example.

The sentiment is easily expressed: What is a tenner here or €20 there?

The blunt answer is it is a lot to many families who have yet to see the benefits of economic revival manifested in extra cash in their pockets.

Additionally there is speculation, with diesel now being daily pummelled, that increasing tax on it would be seen to be a 'good thing' to do for the environment and to help divert buyers to 'cleaner' petrols.

That is typical knew-jerk reaction from some. But it is also double-speak for a desire in parts of this, and previous administrations, to garner more tax from motoring after the switch to an emissions-based system slashed the amount of revenue from VRT and road tax on each car.

We all know of the famous instance of the BMW 520d costing €8,000 less overnight as a result of the famous Budget measures that ended taxation-by-engine-size from 2008.

How it must still rankle in some quarters that a posh car can invoke road tax under €200 - in some cases less than a small hatchback.

Similarly, fuel prices have come down and must provide a salivating prospect for landing a few more cent per litre into the Exchequer. Especially diesel, which many would view as being wide open for a timely tax attack. You see, I hope, where all this is leading.

It is the absolutely ideal backdrop for the sort of stealth tax that doesn't make the headlines or bore too big a hole in your pocket.

But it incrementally increases cost on a day-by-day, week-by-week basis that can lead to a stiff amount year on year.

It is difficult not to repeat the obvious: that motorists have paid through the nose for a long, long time with road tax, fuel tax and purchase tax.

In many ways they have been the silent sufferers.

And many still are.

That is because they are stuck with older cars that attract severe road tax based on cubic capacity and are running on engines that are far less economical than those driven by people who have been, often through leasing/PCP, lucky enough to be able afford a new one.

I've said it before: the headline news of increased car registrations mask another Ireland where people still see little prospect of changing up, never mind buying new.

And they are the people who will be hurt the most by any increases in fuel taxation especially.

The motor industry generally is growing in strength which means jobs for more people around the country, not just on the east coast where the vibrancy of economic lift is far more tangible than down the country. Garages/dealerships bring employment to areas nationwide; that is a key benefit of the motor industry.

Of course, Finance Minister Michael Noonan has to strike a balance between helping the not-so-well-off and incentivising those who are benefitting from the turnaround.

It is an unenviable task and one that must be seen to be fair.

We can only hope his head isn't turned by recent developments good and bad and that ordinary motorists get a fair crack of the whip.

They are, on so many fronts, the innocent bystanders most affected by Budgets and emissions scandals.

Indo Motoring

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