AA Ireland says Budget is no help for motorist’s biggest bills

Motoring Reporter

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Motoring Reporter

Soaring motor insurance costs for businesses and families must be tackled

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AA Ireland has warned that very little was done to help make the commute to work more affordable for motorists.

The decision not to increase the excise duty on diesel in Budget 2018 is welcome. The motoring organisation had opposed plans to increase taxes on diesel to bring the price in line with that of petrol, warning that doing so would represent little more than a cash-grab and not an attempt by the government to encourage people to move away from diesel-powered cars.

While the decision not to increase taxes on either fuel will be welcome news for motorists, the AA believes that an opportunity to remove additional fuel taxes introduced during the recession has been missed.

“In previous years we saw the tax on both petrol and diesel increased significantly as an ‘emergency measure’ in response to the financial crisis. Despite our improving economic situation as a country, these taxes have not been removed.” Conor Faughnan, AA Director of Consumer Affairs stated.

The motoring organisation is disappointed to note that there was nothing in the budget to address the high cost of motor insurance, where government levies add 5% to an annual cost that affects 2 million motorists.

Despite the lack of action taken to lower fuel prices, the AA has expressed its support of the introduction of additional measures to encourage people to purchase fully electric vehicles.

“The idea to make electric cars exempt from benefit-in-kind tax for year will make them more attractive for those who have company cars.” Says Faughnan. “Not a bad idea, but not a big idea either. There were less than 400 electric cars sold last year and there are just over 1,800 electric cars in Ireland. In Norway the figure is 135,000. This modest measure will not do much to close that gap.”

More generally the AA feels that this budget could be more interesting for what it signals for next year rather than for what it does right now. The Government has indicated that it wants to review both Benefit-in-kind generally on cars and also to review the Carbon Tax.

“Any honest assessment of Carbon Tax as it affects motorists would have to conclude that it is meaningless.” Says Faughnan. “Car owners will choose clean and green when incentivised to do so, but Carbon Tax was always more of a cosmetic PR name than a properly designed tax.”