Coalition proposes conditional fuel excise reduction policy

• The federal Opposition proposed a fuel price shield to halve the fuel excise if crude oil hits US$100 a barrel.
• The proposal would reduce fuel tax by 27 cents per litre, costing approximately $950 million per month when active.
• Treasurer Jim Chalmers rejected the policy, calling the proposed intervention uncapped and unfunded.

The federal Opposition has unveiled a proposal to halve the fuel excise if crude oil reaches US$100 a barrel over a two-week rolling average.

The proposed Fuel Price Shield comes after the federal government previously spent $2.5 billion on a three-month excise cut during the early months of the US-Iran war.

“When global events send oil prices through the roof, Australians should know there is a clear automatic safeguard in place to provide temporary and targeted relief,” said Opposition Leader Angus Taylor.

The policy would reduce fuel taxes by about 27 cents per litre for an estimated cost of $950 million a month while active, with a mandatory review after three months.

Treasurer Jim Chalmers rejected the plan as an uncapped and unfunded policy, stating the government is not currently considering an excise reduction.

The debate over fuel taxation occurs alongside broader economic discussions regarding falling national fertility rates, persistent productivity challenges, and potential cost relief from artificial intelligence adoption.