The Coalition has announced a proposal to halve Australia’s fuel excise when the global price of Brent crude oil averages US$100 a barrel over a two-week period. The opposition says its Fuel Price Shield policy would reduce the cost of an average tank of petrol by about $15 when international oil prices rise sharply.
Opposition Leader Angus Taylor said the measure would provide relief at the pump during periods of high fuel prices. He said prices could approach $3 a litre under the conditions targeted by the policy, which he linked to renewed conflict in the Middle East and its effect on petrol prices.
The Coalition says the policy would be fully funded through its plan to reduce the tobacco excise by 80 per cent, legalise and tax vapes and nicotine pouches, and strengthen enforcement against illicit trade. It cited Parliamentary Budget Office modelling that the tobacco excise changes would generate $8 billion. Taylor also said a Coalition government would remove the 32-cent road-user charge for heavy vehicles to reduce transport costs.
Treasurer Jim Chalmers rejected the fuel proposal, describing it as “uncapped and unfunded”. He said the policy was more concerned with polling than petrol prices and told News24’s Sunday Agenda that the government was not considering another fuel excise reduction, while retaining a willingness to respond to economic conditions.
The government previously reduced the fuel excise from 52.6 cents a litre to 20.6 cents between April 1 and the end of July, with the measure later extended until August 2 at a smaller discount. Economist Chris Richardson said fuel tax cuts were a “bad bandaid” because they could increase the amount of money circulating in the economy and contribute to higher prices elsewhere.
The government has also criticised the Coalition’s tobacco proposal. Social Services Minister Tanya Plibersek said lower cigarette prices and changes to vaping rules could increase smoking and vaping rates and lead to deaths.