Opposition Promises to Halve Fuel Excise for a Year If Elected

Opposition Leader Peter Dutton says he would cut the fuel excise by half as a cost-of-living measure should he win the 2025 election.

Opposition Leader Peter Dutton speaks to the media during post budget media interviews at Parliament House in Canberra, Australia on March 26, 2025. Hilary Wardhaugh/Getty Images

Opposition Leader Peter Dutton has wasted no time in announcing a counter measure to Labor’s surprise tax cuts.

Dutton has promised that if elected, a Coalition government would halve the fuel excise for 12 months, bringing down the rate from 50 to 25 cents per litre.

The pledge comes as the opposition prepares to hand down its version of the budget.

Fuel excise is a sales tax applied to petrol and diesel by the federal government, with the extra income directed towards the government’s general revenue.

If it is reduced, motorists will pay less at the bowser.

“We would absolutely repeal it,” Dutton told ABC Radio, regarding Labor’s low-income tax cuts.

“This will replace what Labor is doing, which we think is inappropriate under the circumstances as we’ve laid out in the last 24 hours.”

Comparing Promises

On March 25, Labor Treasurer Jim Chalmers unveiled a federal government plan to reduce the tax rate for the lowest income bracket (between $18,201 to $45,000) from 16 percent to 15 percent.

In 2027, this will be reduced to 14 percent.

For taxpayers, this equates to a saving of around $43 per week in 2026, and $50 per week in 2027.

The cuts will come on top of the legislated Stage Three tax cuts by the government in July last year.

The opposition leader criticised the tax cuts as not addressing an immediate need for financial help.

According to the Australian Automobile Association, an average medium-sized sedan, with average components and fuel consumption, would consume around $5,729 a year in petrol, or around $110 a week.

The excise paid would be around $1,664 a year, or $32 a week.

If the excise was halved, the average motorist could save $16 a week, or $832 annually, per vehicle.

Dutton says the cuts would save families around $1,500 for a year.

Labor’s tax cuts would only apply to workers, while the Coalition’s plan would only apply to people who drive cars, and would not benefit drivers of electric vehicles.

A lowered fuel excise would provide savings to transport companies.

Albanese Critical

Prime Minister Anthony Albanese criticised the Coalition’s plan to slash the fuel excise in place of tax cuts.

“This is what Scott Morrison did in the 2022 budget but then it disappeared because it was time-limited,” he told ABC radio.

“This is time-limited as well - just for one year, no ongoing cost-of-living help.”