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50% CUT IN FUEL EXCISE REQUIRED

22 February 2022

Independent Senator Rex Patrick today called on the Morrison Government to take action in the forthcoming Federal Budget to provide motorists with relief from spiralling petrol prices by slashing the federal fuel excise by fifty per cent. 

“We’ve got to ease the squeeze. With petrol around our country pushing $1.80 a litre at the pump and trending towards $2, the Government must take action to provide immediate relief for Australian families by implementing a temporary 50% reduction in the fuel excise,” Senator Patrick said. 

“Extreme petrol prices are absolutely slugging Australian families and small businesses while many are still struggling in the economic backwash of the COVID-19 pandemic. The prospective inflationary impacts are also clear. These are unique and pressing circumstances that demand immediate action from the Federal Government.” 

“While the current surge in petrol prices, the highest in well over a decade, is driven by international market forces, exacerbated by the Ukraine crisis, a major component of the cost of fuel is federal excise at the current rate, just increased at the beginning of February, of 44.2 cents per litre.”

“The average motorist paid about $775 in fuel excise in 2021, based on approximately 35 litres a week in petrol consumption. Federal tax is a major component of our fuel bills. Every time you fill up at the bowser, Scott Morrison and Josh Frydenberg are there to take their cut.” 

“This is a highly regressive tax because family fuel consumption is largely determined by the necessity of travel to work, school etc, not by the price of petrol, and poorer households pay a much greater proportion of their income on fuel than richer people do.”

“The fuel price burden is especially acute in Australia’s regions and remote areas where higher petrol prices, greater distances travelled and lower incomes apply a big squeeze on household budgets.” 

“Extreme petrol prices are an economic Boa constrictor throttling household budgets. We have to take the pressure off.” 

“In 2001 when petrol was pushing $1 per litre, Prime Minister John Howard responded by suspending the automatic indexation of the fuel excise.” 

“Two decades later, Prime Minister Morrison is ignoring questions about the fuel excise, and when I questioned Federal departments at Senates Estimates last week, Treasury and the Department of Industry, Science, Energy and Resources made it clear that the Government hasn’t given any thought to reducing the fuel excise.” 

“The reason for this inaction is not hard to find. This lucrative tax is worth more than $12 billion a year to Scott Morrison as he calculates his election promises prior to the Federal election.” 

“However rather than stuffing taxpayers’ dollars into more political pork barrels, the Prime Minister should make an immediate commitment to help struggling families across the board by halving the fuel excise; immediately cutting it by 23 cents a litre in the Federal budget and keeping that reduction in place without any price indexation through 2022-23.”

“The Government very clearly has the budgetary capacity to provide significant fuel price relief, given the fact that Treasurer Frydenberg’s Mid-Year Economic and Fiscal Outlook statement in December revealed a huge secret election war chest of $15.9 billion allocated to decisions ‘taken but not yet announced’.”

“Fuel price respite can be provided in the forthcoming Budget Parliamentary sitting week by the immediate passage of amendments to the Schedule to the Excise Tariff Act 1921 to cut the fuel excise. Amending legislation could be passed by Thursday 31 March and given assent by the Governor-General to give motorists relief from 1 April – for the final quarter of 2021-22 and through all through 2022-23.” 

“This would be a temporary measure to give immediate relief to hard pressed households.” 

“The current combination of extreme petrol prices and post-Covid-19 economic challenges is a special circumstance that demands immediate and direct action from the Federal Government. Further adjustments to the fuel excise should be determined in the light of international prices and economic conditions in the run up to next year’s 2023-24 budget.” 

“Scott Morrison and Josh Frydenberg have a duty to help out Australian families. The Government has the clear financial capacity to do this.” 

“As an independent Senator, I’ll be pressing them hard to do just that by reducing the price shock at the petrol bowser.”