5.9k Share this
Australia’s tax experts have warned against the government cutting the fuel excise, arguing it will do little to bring down the real-world price of petrol.

Currently, Australia’s fuel excise is priced at 44.2 cent per litre of fuel, with many speculating that the Morrison Government would cut or reduce the tax in next week’s Federal Budget.

But experts from the Chartered Accountants Australia and New Zealand (CA ANZ) say slashing the fuel excise would be a temporary band-aid that does not holistically address the problem of the cost of living.

Why are petrol prices so high | Explainer
The government’s fuel excise is currently taxed at 44.2 cents per litre of regular unleaded fuel. (Nine)

“It is not just the cost of fuel that is increasing, but also the cost of groceries. These items are generally not discretionary and the Australians who are feeling the most pain are low-income earners,” said Susan Franks, Senior Tax Advocate at CA ANZ. 

 “Cutting fuel excise won’t necessarily result in lower prices at the pump and reduces incentives to transition to net zero.

 “Australia is a price taker when it comes to fuel and there is no guarantee that any cost reduction will be passed onto consumers.”

Prime Minister Scott Morrison on the campaign trail in Perth.
Prime Minister Scott Morrison has hinted at tackling soaring petrol prices. (Paul Kane / Getty)

At a median price of $2 per litre of unleaded 91 petrol, the government’s fuel excise only accounts for around 20 per cent of a motorist’s tank – yet is used to fund safety upgrades and infrastructure for the nation’s motorists.

Ms Franks argued that one-off payments to help Australians with the cost of living now would be more efficient than removing taxes which would likely never be reinstated.

“History tells us that it would be politically difficult to subsequently reinstate the $12B fuel excise, thus cutting fuel excise could result in a permanent reduction in revenue for what may be a temporary problem. A cost that Australia, with a budget in deficit and nearly a trillion in debt, can’t afford,” said Franks.

“Direct relief payments would be far more efficient in assisting Australians with their hip pocket pain today and allows them to spend money on items that they need – not just petrol.”

Tax experts argue that cost of living is driving up the cost of far more than petrol prices. (Wayne Taylor)

The government has not revealed what measures it intends to take to reduce the cost of living – including record-high petrol prices – with Scott Morrison remaining coy about the prospect of slashing the fuel excise.

“What about the fuel excise, will you cap that and if so, by how much?” Karl Stefanovic asked the Prime Minister on the Today Show.

“Well, the budget’s in less than a week now,” Morrison replied, before Stefanovic interjected: “That’s a yes.”

“I will be standing with you, talking about the budget in a week’s time,” said Morrison.


The most expensive and cheapest countries on Earth for petrol

“We will be doing that, we will be able to outline all the important measures which will be addressing the cost of living pressures, but also to ensure that our economy continues to strengthen.”

Source: 9News

5.9k Share this
You May Also Like

‘Verbally abused’ aged care workers call for mental health helpline ahead of federal election

For some Australians, life seems to be returning to normal after the…

Tonga volcanic eruption biggest explosion ever recorded, study finds

The volcanic eruption in Tonga was the biggest explosion ever recorded by…

Armed man shot dead by police in Queensland

Officers were called to Ernest Street in the Ipswich suburb of One…

Ukraine’s Eurovision winners return to a heroes’ welcome as they are mobbed by fans in Lviv

Ukraine’s Eurovision winners Kalush Orchestra return to a heroes’ welcome as they…

Amber Heard admits to NOT honoring her promised $3.5 donation to the ACLU

Amber Heard has finally admitted to failing to pay her pledged $3.5million…

Dame Deborah James reveals she’s ’embracing the rain on her face’ in heartfelt post

Dame Deborah James has revealed she’s ’embracing the feeling of the rain…

Sweden ends neutrality, joins Finland in seeking NATO berth

Sweden’s prime minister announced on Monday that Sweden will join Finland in…

Biden Imports 35K Foreign Workers for U.S. Jobs, 12M Americans Jobless

President Joe Biden is subsidizing businesses with 35,000 more foreign H-2B visa…