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Opposition leader Peter Dutton has pledged to halve the fuel excise on petrol and diesel and repeal Labor’s income tax cuts.
Peter Dutton pledges to halve fuel excise
28 March 2025
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7 minute read
If elected, the Coalition would halve the fuel excise from 50.8 cents per litre to 25.4 cents for a year, Dutton said in his Thursday budget reply.
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“Fuel is up, everything is up and I think if we can provide some relief until we can put in place some structural changes to the energy system and start to bring prices down,” Dutton said in an interview with 2GB on Thursday.
“I think this is the best way, the most efficient way that we can provide support to people.”
The Coalition has touted the fuel excise cut as immediate and necessary cost of living relief, contrasting it with Labor’s income tax policies set to come into effect from mid-2026.
“Our plan starts straight away, people will get the relief at the bowser straight away, with a 25 cent reduction in the price of petrol and diesel. Labor’s plan comes in 15 months’ time and it’s about 70 cents a day by way of tax cuts. I just think Australians need support now,” Dutton told the Today Show on Monday.
Liberal senator James Paterson added: “This will be real relief straight away for Australians, they won't have to wait 15 months like they will under Labor, and this will be much more relief for them who drive one, let alone two cars. $28 per week for a family is a really significant improvement in their budget bottom line.”
The excise cut would see a two-car household save roughly $28 a week on average, or almost $1,500 over the year.
Under Labor’s income tax cuts, those on an average income ($79,000) would save $268 in 2026–27 and $536 in 2027–28.
Labor has delayed the start of the tax cuts to minimise its effect on inflation, which has fallen towards the RBA’s target of 2.5 per cent.
“Labor’s new tax cuts will be phased in over two years, ensuring our fiscal settings are consistent with inflation remaining sustainably in the target band,” Treasurer Jim Chalmers and Prime Minister Anthony Albanese said in a joint media release.
Core inflation was 2.7 per cent in the 12 months to February, within the RBA’s 2–3 per cent target range. While the RBA cut interest rates from 4.35 per cent to 4.1 per cent in February, it cautioned that future rate cuts would not be imminent as global uncertainty and a tight labour market could undermine efforts to keep inflation in check.
The Liberals have pledged to repeal Labor’s tax cuts, which would cost the budget $17.1 billion over the forward estimates if the party gets into office. The 12-month fuel excise cuts would cost the budget $6 billion.
“We think the more efficient spend of that money is in relation to the announcement we’ve made this morning – reducing by 25 cents the price of petrol and diesel,” Dutton said.
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