Petrol prices: Dirty bomb hiding in federal budget fuel excise cut

While a huge 22 per cent cut to the fuel excise is expected to deliver big savings, there’s a sting in the federal budget’s brief reprieve for motorists.

Scott Morrison has left behind a “dirty bomb” for motorists and Labor leader Anthony Albanese if Labor wins the next election with a big petrol price hike in September.

Treasurer Josh Frydenberg’s announcement of a budget night 22 cent cut to the fuel excise is expected to deliver big savings for motorists within days.

The decision cuts fuel excise taxes in half from midnight. But it will only apply for a “temporary” and “targeted” six month period to deliver cost of living relief for families.

While fuel prices are expected to drop within days, the reprieve won’t last. Picture: Franck Fife.

That means there’s a sting in the tale of the Prime Minister’s largesse – whoever wins the election gets to be the ‘bad guy’ who hikes the cost of petrol for millions of motorists.

The Labor Party has announced it is backing the changes – but it admits the Prime Minister may be booby-trapping the budget for a Labor victory.

“I think that’s part of the motivation from the government, frankly, I think they’re taking a challenge from one side of the election and pushing it to the other side of the election,’’ Labor’s treasury spokesman Jim Chalmers said.

“Clearly we’re not going to stand in the way of delivering relief for working families whose real wages are falling.

“But I think one of the motivations from the government is to take this problem from March 2022 and just to delay it until September 2022. There’ll be some cost of living relief in the interim but there’ll be a difficult period when the price of fuel goes back up.”

Jim Chalmers said the government was “taking a challenge from one side of the election and pushing it to the other”. Picture: NCA NewsWire/ David Crosling

Last night, ABC 7:30 host Leigh Sales described the short-term petrol excise cut as a “dirty bomb” for whoever wins the election.

But the Treasurer denied it was designed to create a big problem for a Labor government.

“No, it responds to the here and now where you’ve seen petrol prices above $2 a litre,” Mr Frydenberg said.

Speaking on ABC Radio National this morning, host Patricia Karvelas asked Dr Chalmers if he would reimpose the 22 cent cut if Labor wins the election.

“If you’re the Treasurer after the election, will you reimpose the full excise rate in September?,’’ she asked.

Treasurer Josh Frydenberg said removing the fuel excise was not an attempt to create a problem for a potential Labor government. Picture: Stringer/ AFP.

In response, Dr Chalmers warned not to expect the petrol excise cut to be forever.

“You don’t want to pre-empt decisions that would be before the next government but I think it would be hard for a government of either political persuasion to find the money to extend this cut in the petrol excise,’’ he said.

“I would expect, whether it’s myself or Josh Frydenberg or somebody else, I would expect the cost of petrol, because of the decision taken by the Government, will go up in September.

“I’m just making the point that it would be difficult for a government of either political persuasion to continue this relief indefinitely.”

Originally published as Petrol prices: Dirty bomb hiding in federal budget fuel excise cut