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Coalition Proposes Automatic Fuel Excise Halving
Coalition Opposition Leader Angus Taylor has accused the federal government of being "out of touch" regarding its stance on rising fuel prices, as the opposition pushes for a new mechanism to slash costs at the bowser. The Coalition is advocating for a plan that would automatically halve the fuel excise on petrol and diesel if international oil prices remain above $US100 a barrel for more than two weeks.
Nationals Senate Leader Bridget McKenzie outlined the proposal, stating that the measure would cost approximately $950 million a month. To fund this reduction, the Coalition plans to implement changes to tobacco excise duties.
The government has previously utilized temporary fuel excise cuts to ease cost-of-living pressures for Australians. However, officials have ruled out making such measures permanent and are not currently considering another cut. This stance has drawn sharp criticism from the opposition, who argue that motorists continue to face rising costs without adequate relief.
Debate Over Inflation Risks and Targeted Support
The proposal has sparked a debate within parliament regarding the economic impact of broad fuel tax cuts. Community Strong MP Allegra Spender argued that wide-ranging reductions in fuel excise risk adding to inflation. Instead of across-the-board cuts, Spender suggested that financial support should be targeted specifically at households, industries most affected by high costs, and gas exporters.
Spender noted that the government had already spent around $3.5 billion on temporary fuel excise cuts in previous measures. She contended that further broad cuts could exacerbate economic pressures rather than alleviate them.
McKenzie rejected concerns regarding inflation, arguing that the proposed cut would not be inflationary if it were paid for through savings reductions. She contrasted this approach with the Labor Party's previous methods, claiming those had added costs to the budget rather than reducing them.
Current Fuel Prices and Economic Outlook
The political dispute occurs as fuel prices remain elevated across the country. According to data from the NSW FuelCheck website, the average price of E10 petrol in New South Wales is approximately $2.37 a litre, while diesel averages about $2.88 a litre.
Monetary policy officials are also monitoring the situation closely. Reserve Bank Governor Michele Bullock has warned of several risks facing the economy, including excess demand, elevated oil prices, and inflation expectations. These warnings come ahead of the Reserve Bank's interest rate decision scheduled for September 29.
As parliament remains split on the issue, the Coalition continues to press for its automatic excise halving plan, while the government maintains its position against further temporary cuts.
