Treasurer Joe Hockey is facing a fresh round of criticism for being out of touch and not understanding the impact of his budget on the less well off after suggesting “poorest people either don't have cars or actually don't drive very far in many cases”.

Mr Hockey made the comments on Wednesday as he argued the government's proposed rise in fuel excise was a progressive measure that would cost people on middle and higher incomes more.

The Treasurer said the Coalition was asking "everyone to contribute, including higher income people" by restarting indexation of fuel excise, a measure Labor has labelled a new fuel tax.

Contrary to Mr Hockey's claim, a 2001 research paper from the Parliamentary Library states that "petrol and diesel excises are regressive in that people on low incomes pay a higher proportion of their incomes in the form of excise than people on high incomes, given the same level of fuel use".