Prime Minister Scott Morrison has given another major hint that next week’s federal budget could feature a cap on the fuel excise.
With the average price-per-litre surging to over $2.20 in some parts of the country, the government is under mounting pressure to alleviate cost of living burdens at the March 29 budget.
Mr Morrison and the Treasurer have been tight lipped about whether the 44c fuel excise – which helps pay for the country’s roads – would be reduced in the short term.
But during a Wednesday morning television interview, Mr Morrison gave a clue that the burden at the bowser could be slashed.
“What about the fuel excise, will you cap that and if so, by how much?” Today hxjmtzywost Karl Stefanovic asked.
Mr Morrison replied: “Well, the budget’s in less than a week now”.
“So that’s a yes,” Stefanovic said in response.
Mr Morrison went on to say that all would be revealed on Tuesday.
“We will be able to outline all the important measures which will be addressing the cost of living pressures, but also to ensure that our economy continues to strengthen,” Mr Morrison said.
Mr Morrison’s comments come off the back of Treasurer Josh Frydenberg’s clue earlier this week that temporary measures could be taken.
“What we will do will be temporary and it will be targeted, and that’s all I can say,” Mr Frydenberg told news.com.au earlier this week.
If, for example, the government temporarily reduced the fuel excise by 10 cents a litre for six months, that could cost the government $1.5 billion.
In that same interview, Mr Frydenberg ruled out a freeze on automatic indexation.
Former prime minister John Howard famously froze the fuel indexation in 2001, as petrol prices rose to over $1 a litre.
The Abbott government did not unfreeze that indexation until 2013.
Other ways the government could move to address mounting cost of living prices in next week’s budget includes extending the low and middle income tax offset.
If that was to be extended, people earning up to $126,000 a year would benefit from up to $1080 for another year.
