The Coalition has unveiled a major campaign promise aimed at easing financial pressure on Australians, pledging to halve the fuel excise by 25 cents per litre for 12 months. If elected, the plan would see the tax fall from approximately 50 cents to 25 cents per litre.
Opposition Leader Peter Dutton said the measure would take effect immediately following a Coalition victory, contrasting it with Labor’s scheduled tax cuts which are due to come into force over a year later. The proposal is expected to be a central pillar in the Coalition’s alternative budget, which will be presented in parliament this week.
Policy Aims to Deliver Immediate Cost-Of-Living Relief
The Coalition’s fuel excise policy, estimated to cost $6 billion, is intended to provide households with instant financial relief amid sustained high petrol prices.
According to the Opposition, the plan would result in a weekly saving of approximately $14 for someone filling a 55-litre tank — amounting to over $700 annually. Dutton described the initiative as a response to the pressures facing working families.
“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,” he said in a statement.
The plan is being presented as a clear alternative to Labor’s income tax changes, which the Coalition has criticised as delayed and insufficient.
The timing of the announcement comes as both major parties attempt to position themselves as the most responsive to cost-of-living challenges. While the federal fuel excise is typically used as a general revenue stream, its reduction is seen as a tangible, short-term benefit for motorists.
A 2022 review by the competition watchdog found that a previous temporary excise cut under the Morrison government led to an immediate and significant drop in prices at the pump.
Road Funding Concerns Dismissed Amid Tax Shift
The Coalition has also sought to pre-empt criticism regarding the potential impact on infrastructure funding, assuring voters that the reduction in excise revenue would not affect national road investment.
Although historically linked to road funding, the fuel excise has operated as a broader fiscal tool in recent decades, allowing some flexibility in budget allocation.
In a statement, the Opposition clarified that the proposed tax reduction would not divert funds earmarked for the road network. This follows previous remarks by Liberal MP Warren Entsch, who acknowledged the excise’s traditional funding role but noted its evolution into a general tax mechanism.
