The AA is very pleased that today's budget contained no increase in fuel tax. The AA has made the argument all year that fuel taxes were too high. This drains disposable income from the economy and has the net effect of reducing fuel use and therefore fuel revenue.

In today's decision the AA has claimed a small victory for motorists and for common sense.  Despite the win however the AA is quick to point out that drivers in Ireland are still paying an exorbitant amount of tax having endured six consecutive tax hikes the last of which was introduced during last year's budget.

"We've gone to extensive lengths over the last year to communicate to government the front line feedback we received from motorists about the toll fuel prices are taking on their lifestyles and even livelihoods."  Says Conor Faughnan, Director of Consumer Affairs, AA Ireland "We're pleased that the seemingly relentless series of fuel tax hikes has been interrupted however it simply doesn't take away from the fact that we're still facing all time record highs for fuel prices because of the six fuel tax increases that have been applied in the last 5 years."

Car Tax:

There is no way to dress it up: the car tax increase announced today will push up the cost of living for car owners affecting almost every household in the country. For vehicles bought from next year onwards there is some justification for an increase or fairly soon every car on the road will be tax band A, such is the progress being made on emissions.

However for the cars already on the road this is a tax increase, pure and simple.

"Drivers of older vehicles will feel harshly treated" says Faughnan. "Those pre-2008 cars are already highly taxed and they are not luxuries; in many cases ordinary motorists can barely afford to keep them on the road."

"For anyone who bought a low-emission car on a low tax promise, this is the day when that promise was broken. It is clearly an act of bad faith affecting over 300,000 motorists who believed the promise and bought a cleaner-greener car in the last four years."

Change to Registration Plates

The change to the registration plate system will be welcomed by the trade and the AA is happy to support it, although it will have little effect on the consumer.

"Car sales are extremely lopsided in Ireland, with 80% of the year's registrations happening in typically happening in first four months." Says Faughnan. "The change effectively gives the industry two separate peaks. This may prove helpful in the long term but for 2013 any benefits are likely to be eroded by the car tax and VRT hike and by the rise in fuel."