Australia’s opposition proposes cutting fuel excise — ABC News Australia
In Australia, the opposition Coalition has proposed halving the fuel excise if the average price of Brent crude reaches US$100 per barrel over a two-week period. According to the Coalition’s estimate, such a scheme could reduce the cost of filling an average petrol tank by about A$15, or 27 cents per litre.
As ABC News Australia reports, the initiative has been named Fuel Price Shield. Opposition leader Angus Taylor said in Canberra that the mechanism would take effect under a future Coalition government in the event of a sharp rise in global oil prices. According to him, a price above US$100 per barrel could mean that the retail price of petrol is approaching A$3 per litre.
Funding for the initiative
The Coalition says it will fund the reduction in fuel excise through its proposal to cut the tobacco excise by 80%. According to Parliamentary Budget Office modelling cited by the opposition, this plan is expected to provide A$8 billion.
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Taylor also announced plans to abolish the 32-cent road charge for heavy vehicles in order to reduce the cost of transporting goods.
Government and economist reaction
Treasurer Jim Chalmers criticised the opposition’s proposal, calling it unlimited and unfunded. He said the government is not discussing or considering a new reduction in fuel excise, although it had previously responded to changing economic conditions.
Economist Chris Richardson said most economists consider fuel tax cuts to be a temporary solution that fuels inflation. The Australian government had previously reduced the fuel excise: from 1 April until the end of July, the rate was cut from 52.6 to 20.6 cents per litre.
