Prime Minister Scott Morrison says any decision to ease pressure on sharply rising petrol prices won’t be announced until the federal budget.
The prime minister’s comments came after two Nationals MPs called on the federal government to cut the fuel excise as petrol prices continue to climb towards $2.20 a litre due to global pressures including the Ukraine-Russia war.
Mr Morrison said the government understood what was happening at the bowser, but that he would leave all budget announcements to when its handed down on March 29.
“The budget is in a couple of weeks and that’s when announcements are made about all matters relating to the budget and I don’t intend to engage in pre-budget speculation on this matter or any other matter,” he told reporters.
But Mr Morrison said Australians are now paying less tax than under Labor, with a person on a $90,000 wage receiving $50 more in their pocket each week, which helps combat the rising cost of living.
“Our commitment to cutting taxes … is actually helping Australians to be better able to deal with the increased cost of living,” he said.
Mr Morrison added that lower electricity prices under his watch was also helping keeping Australians employed.
Opposition Leader Anthony Albanese did not say whether he would cut the excise or freeze the index, instead arguing that the price of living had gone up under the Morrison government without an increase to wages.
“Families are under massive pressure – everything is going up except people’s wages,” Mr Albanese said.
“Food, be it meat or vegetables, the essentials of life are going up as well. Rents are going up as well. The cost of childcare is going up as well.
“They haven’t done anything about petrol (so) we will await what the government does.”
The NRMA’s Peter Khoury says the increased prices will inevitably be passed on to consumers through other goods, with truck fleets now paying more than double the average price of fuel compared to April 2020.
“Diesel is the fuel that our economy runs on. Farming, agriculture and mining, transport, small businesses that run fleets,” he told the ABC.
“This is coast to coast and we have never seen anything like it in history. Your family will feel it at the bowser, in the supermarket aisles and everywhere else.”
The government is also facing pressure from Liberal premiers over the tax with NSW Premier Dominic Perrottet, South Australian Premier Steven Marshall and Tasmanian Premier Peter Gutwein supporting a cut.
But one of Australia’s key economists says excise is not a lever the government should pull to ease prices.
Deloitte Access Economics’ Chris Richardson said the extra billions going back into the economy would push interest rates and inflation up faster.
“People would lose (the money) in terms of higher prices, higher interest rates – this is not an easy fix because there is not an easy fix to be had,” he told Sky News.
Senior Liberal MP Tim Wilson said the tax was there to pay for roads and any cut would need to be balanced against a loss of revenue for the government.
The fuel excise is expected to raise almost $50 billion over the next four years, with about $47 billion to go toward land transport projects, according to the Australian Automobile Association.
Mr Wilson said releasing fuel reserves would only be a temporary solution if global instability underpinned by Russia’s invasion of Ukraine caused the price of oil to soar.
Australia joined 30 countries in releasing a combined 60 million oil barrels from reserves to stabilise prices after Russia’s invasion of Ukraine caused a spike in prices.
Thirty million barrels of oil will come from the US strategic reserve.
(Australian Associated Press)