Coalition promises to slash petrol by up to $15 a tank during high inflation by lowering cigarette prices.
The cost of fuel has continued to increase in September, with unleaded petrol rising to up to $2.50 a litre in some parts of the country and diesel pushing past $2.60 to $3.00 a litre because of global supply constraints.
Liberal leader Angus Taylor said if the Coalition got voted in at the next election, it would halve the fuel excise when the two-week price of Brent crude was above US$100 a barrel in a policy labelled the Fuel Price Shield.
Taylor said the measure would reduce the tax on fuel by about 27 cents a litre, equivalent to about $15 on a typical tank of fuel.
“Fuel is not a luxury,” Taylor said.
“Australians need it to get to work, take the kids to school and keep their businesses running.
“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.
How does the policy work?
Essentially, the Coalition would halve the fuel excise when the price of Brent crude rises above US$100.
All changes would apply from the Monday after the trigger date.
But the tax relief would be temporary.
It would automatically switch off and return to the normal rate after three months, or sooner if the eight-week average price of Brent crude drops back below US$100 a barrel.
They would also reduce the 32-cent-a-litre heavy vehicle road user charge to zero to help truck drivers.
One Nation has said it will also cut the fuel excise to provide cost of living relief, although they have not locked in an exact figure.
What will happen to cigarettes?
The policy is estimated to cost about $950 million for each month it is activated, according to the Coalition and would by funded by using revenue generated by slashing the tobacco excise by 80 per cent.
A standard packet of cigarettes that costs between $40 and $50 is projected to fall to between $16 and $26, assuming retailers pass the savings on to consumers, according to Coalition figures.
What do experts say?
Health groups have condemned the plan.
President of the Australian Medical Association Dr Danielle McMullen warned that lower cigarette prices could increase smoking rates among price sensitive demographics like young people and lower-income groups.
“Tobacco taxation has been a major contributor to Australia’s historically declining smoking rates,” she said.
The Albanese government also lashed the proposal, with Finance Minister Katy Gallagher labelling it a “unfunded, uncosted promise”.
But NRMA spokesperson Peter Khoury cautiously welcomed the policy.
“The benefit to that is that it kind of provides certainty,” he said. “So people will know it’s coming.
“It’s not a policy that you need a huge runway to implement. It can be done within a couple of days.”
But he said the fuel excise was meant to be used to fix roads and he had concerns whether the policy would impact road funding.
Tips for reducing your fuel bill
- Compare prices before filling up. Don’t just fill up at the first servo that you drive past. Use a state/territory fuel price website or My NRMA app. NRMA’s Peter Khoury said in Sydney this week the gap between the cheapest and most expensive service station is about 40 cents a litre this week.
- Consider E10 if your car can use it: It’s the cheapest fuel in Australia and according to Khoury around two cents a litre cheaper than unleaded.
Extracted in full from: https://www.thesenior.com.au/story/9354091/coalition-fuel-excise-angus-taylor-plans-cigarette-tax-cut/
