Treasurer Jim Chalmers has dismissed Opposition Leader Peter Dutton’s promise to slash the fuel excise as a misleading cost-of-living gimmick, claiming it would only benefit Australians who drive well above average distances each year.
According to new government analysis, the average household would need to clock up around 40,000 kilometres annually—almost triple the national average of 13,800 kilometres—to see the level of savings the Coalition is promoting.
The Liberal Party claims its proposed 25-cent-per-litre cut to the fuel excise would save a typical motorist who fills up a 55-litre tank once a week about $14. For households with two cars, they say that could equate to $28 a week or $1,500 per year.
Their modelling also suggested workers could save as much as $20 a week, using hypothetical scenarios such as a tradesperson commuting from Geelong to Melbourne daily (a 150-kilometre round trip) or a Western Sydney commuter travelling from Penrith to Mascot.
But Chalmers has rubbished these figures, arguing that they reflect only a small segment of high-distance drivers and don’t apply to the majority of Australians.
He described the policy as a “con job,” saying the average family would need to drive the equivalent of once around the world annually to gain the full savings advertised. He also criticised the Coalition for pushing a temporary measure that offers no long-term cost-of-living relief.
Limited Reach and Unrealistic Expectations
Chalmers warned that the fuel excise cut would leave many Australians behind, particularly the nearly 750,000 households without a vehicle. He said even those with cars would see only a fraction of the promised savings.
Based on standard vehicle efficiency and average travel distances, Treasury estimates show that the true savings for most people would be closer to a quarter of what the Coalition claims. For those with less fuel-efficient vehicles, the benefit might rise slightly—but would still fall short of $20 a week.
Chalmers accused the Opposition of inflating the numbers, noting that Australians would bear the long-term cost through higher income taxes under Dutton’s broader economic policies.
Summarising his remarks, Chalmers said the fuel policy is unrealistic, benefits only a small subset of Australians, and fails to address broader cost-of-living issues in a meaningful or lasting way.
Dutton Defends Policy
Meanwhile, Dutton stood by the Coalition’s pledge, saying it offers immediate help for families doing it tough.
He said that from day one of a Coalition government, fuel tax would be cut by 25 cents a litre, saving motorists roughly $14 per week, or $750 annually. For families, that could add up to around $1,500 per year—more for those with teenagers or multiple vehicles.
Dutton claimed the policy is simple, effective, and offers instant savings every time Australians visit the petrol station.
Fuel Prices Already Falling
Separately, the Treasurer pointed out that petrol prices have already declined significantly since the last election—by around 40 cents per litre in some key regions—undermining the urgency for a cut to the excise.
He credited the drop in prices and the easing of inflation to Labor’s broader economic approach, which he said is delivering “responsible, ongoing support” to households. This includes permanent tax cuts, energy bill rebates, and expanded Medicare bulk billing.
In contrast, Chalmers argued, the Opposition’s plans would raise income taxes and fail to deliver long-term relief. He insisted that Labor is addressing cost-of-living pressures from every angle, while the Coalition is relying on a short-term measure that helps only motorists and excludes many Australians.
Conclusion
The debate over cost-of-living support is intensifying in the lead-up to the next federal election. While the Coalition’s fuel excise proposal offers immediate but limited savings for high-mileage drivers, the government is pitching a broader, more inclusive package.
Chalmers maintains that the Opposition’s headline figures don’t reflect the reality for most Australians and warns that the policy, if implemented, would ultimately leave households worse off.
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