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Why you are paying so much more for transport

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Transport costs account for around 14% of the average household budget. And the bad news is that they are rising, whether you drive your own car or take public transport.

Rising fuel prices are the No. 1 contributor to the increase in costs over the first quarter of 2017, increasing nationally by around $226 a year for the average household, according to the Australian Automobile Association's (AAA) transport affordability index.

"The fact government fuel excise increased to more than 40 cents a litre for the first time from February 1, 2017, meaning the average family now pays $1035 in fuel excise each year," says Michael Bradley, chief executive of the AAA.

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Other increased costs include tolls, new-car servicing and new-car prices, which had a flow-on impact on car repayment costs.

Australian families (based on a couple with children and two cars that clock up 13,800 kilometres a year each) now pay on average $17,464 a year in land transport costs, an increase of $686 in the year to March 2017.

If you live in Sydney, you are paying more than families in any other capital city. It costs a family $22,238pa, an increase of $848 over the year. Hobart households have the lowest average capital city transport costs at $14,852pa, an increase of $737 over the year.

If you catch the train or bus, chances are you are paying more for public transport, particularly if you live in Melbourne, Hobart or Canberra.

Bradley says that despite the rising cost of running a car, motorists will pay $12.5 billion in net fuel excise in 2017-18, an increase from $12 billion in 2016-17. But the proportion of excise returned to motorists in the form of land transport infrastructure investment will decrease from 66% in 2017-18 to just 30% in 2020-21.

He says the government maintains import restrictions and continues to collect import taxes on vehicles, forcing Australians to pay an extra $4.7 billion for newer, cleaner and safer cars.

"And the government continues to consider the idea of removing regular unleaded petrol from the marketplace, a move that, according to AAA analysis, would see the average household pay up to $423 more each year for petrol," says Bradley.

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Susan has been a finance journalist for more than 30 years, beginning at the Australian Financial Review before moving to the Sydney Morning Herald. She edited a superannuation magazine, Superfunds, for the Association of Superannuation Funds of Australia, and writes regularly on superannuation and managed funds. She's also author of the best-selling book Women and Money.
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