The federal treasurer has ruled out any changes to fuel taxes, even as the conflict in the Middle East drives up prices at the pump.
“As far as the fuel tax goes, we haven’t thought about it,” Treasurer Jim Chalmers said at a press conference on Wednesday, March 4.
“We have introduced many cost of living supports in other ways that you are aware of, and we also have two further income tax cuts planned.
“So we found other ways to help people with the cost of living – cheaper medicine, more bulk billing, student debt relief, tax cuts and the like.”
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Fuel excise tax is a flat sales tax levied by the Australian Government on petrol and diesel purchased from Bowser.
It is adjusted every February and August according to the Consumer Price Index (CPI) and is currently 51.6 cents per liter.
The fuel tax has been criticized by some, including the Victorian Automobile Chamber of Commerce, as a “hidden tax” because it is included in the price at the pump; Fuel is also subject to a 10 percent Goods and Services Tax (GST).
Pauline Hanson’s One Nation party calls for a 50% cut in fuel duty and accuses Labor of being “war profiteers”.
While the government has ruled out changing the fuel tax, the Treasurer has issued a warning to fuel retailers.
“I think we’ve taken an important step to ensure that the ACCC helps ensure petrol stations don’t do the wrong thing when it comes to oil prices flowing on the Bowser,” Mr Chalmers said.
“We don’t want gas stations to take advantage of people. We understand there will be movements in the market, but retailers can’t take advantage of people for cups.”
The fuel tax was originally intended to fund road infrastructure and maintenance, but research by the Australian Automobile Association (AAA) found only 57 per cent of revenue was reinvested in public transport and roads in the decade to the 2022/23 financial year.
Fuel excise tax revenue is expected to decline as Australians switch to more fuel efficient vehicles as well as electric vehicles (EVs).
This has led to calls for abolition in favor of a single road tax covering not only internal combustion engine vehicles but also electric vehicles.
The Australian government confirmed last year that it was working with states and territories to introduce a road tax, but did not appear to propose changing the charges imposed on owners of internal combustion engine vehicles.
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