Peter Dutton to halve fuel excise if elected

In a major announcement, the Liberals have revealed the centrepiece of their cost-of-living measures, throwing down the gauntlet to Labor to match it.

Liberal leader Peter Dutton will pledge to temporarily halve fuel excise if he is elected Prime Minister in a promise he says could save a two-car family up to $1500.

News.com.au can reveal the big move would deliver a 25 cent cut to fuel excise for 12 months.

In a major announcement, the Liberals have revealed for the first time the centrepiece of their cost-of-living measures, throwing down the gauntlet to the Labor Party to match it.

It will cost $6 billion in revenue foregone in a single year. That’s around half of the value of the Treasurer’s tax cuts over four years.

It would mean for petrol and diesel, excise rates will be reduced from 50.8 cents to 25.4 cents per litre.

“The Coalition is committed to supporting families and businesses and alleviating the cost-of-living pressure that everyone, right across the country, is feeling right now,’’ Mr Dutton told news.com.au.

“If elected, we will halve fuel excise for 12 months.

“And if elected, we will deliver this cost-of-living relief immediately – whereas people have to wait fifteen months for Labor’s 70 cents a day tax tweak.

“This cost-of-living relief will make a real difference to families and small businesses – everyone from tradies, to mums and dads, to older Australians, and to transport delivery workers.”

How much could you save?

A household with one vehicle filling up once a week will save around $14 a week, according to the Liberal Party – an average benefit of around $700-750 over 12 months (based on a 55 litre tank).

Leader of the Opposition Peter Dutton. Picture: NewsWire / Martin Ollman

For households with two cars who fill up once a week, they will save around $28 a week on average – or close to $1500 over 12 months.

“The commute to work, taking the kids to school or sport, the family drive, or the trip to the shops will all cost less under the Coalition,’’ Mr Dutton said.

This measure will cost approximately $6 billion.

Mr Dutton pledged that the legislation enacting the excise cut would be introduced on the first sitting day of the next parliament, allowing the cut to come into effect as quickly as possible.

The Morrison Government was the last to offer a pre-election fuel excise cut in 2022 but it wasn’t enough to win the election.

Labor’s tax cuts

Australians can expect a tax cut of an extra $5 a week for anyone earning more than $45,000 from next year in a surprise election bribe that will be hard-pressed buying most voters a cup of coffee.

But building on existing stage three tax cuts brought in by Labor last year, the changes will deliver the average worker a total tax cut of $2548 a year or about $50 a week.

“I understand there’s always an appetite for governments to do more,’’ Treasurer Jim Chalmers said.

“We’ve got budget constraints.

“But it’s not the only thing we are doing in cost of living. It goes hand-in-hand with more bulk billing, cheaper medicines.

Liberal leader Peter Dutton will pledge to temporarily halve fuel excise if he is elected Prime Minister in a promise he says could save a two-car family up to $1500. Picture: NewsWire / Aaron Francis

“The total value is $50 a week. It includes the $150 energy rebate.”

The federal government is billing the changes as a double tax cut because they also increased the Medicare levy low income thresholds.

This means that one million Australians on lower incomes will continue to be exempt from paying more tax under the Medicare levy, or will continue to pay it at a reduced rate.

Over the next decade from 2024, the average Aussie will pay $30,000 less tax than they would have if the Morrison Government and the Albanese Government had not embarked on and then implemented tax reform.

Staggering cost of tiny $5-per-week tax cut

Despite offering a stipend so small it would barely buy a weekly cup of coffee, the cost to the budget is huge, because it’s delivered to every full-time worker.

In fact, the cost to the budget in terms of revenue foregone for the extra tax cut is $17 billion by 2030 – an impost the Treasurer insisted was worth it to help relieve bracket creep and reward workers.

“Every Australian taxpayer will get a tax cut next year and the year after, to top up the tax cuts which began last July,’’ Mr Chalmers said.

“This will take the first tax rate down to its lowest level in more than half a century.

“These additional tax cuts are modest but they will make a difference.”

Originally published as Peter Dutton to halve fuel excise if elected