Drivers shouldn’t anticipate a further fuel tax reduction soon, as the government focuses on other cost of living relief measures. Despite pressure to assist financially strained households, the government’s mid-year budget update didn’t introduce new direct financial aid. Treasurer Jim Chalmers clarified that the aim wasn’t to present a “mini-budget” with significant policy announcements. Still, he remains open to additional cost of living relief in the 2024 budget if necessary.
Reducing fuel excise tax, as was done following the Ukraine conflict and the resulting petrol price hike, seems improbable now due to the volatile global oil market. Dr. Chalmers emphasised that the government’s cost of living efforts are directed towards other areas like electricity, childcare, and rent.
The May budget included a cost of living relief package with benefits like energy bill subsidies and more affordable medicines. According to the treasurer, banking the higher-than-anticipated tax revenue is also expected to mitigate inflation. This extra revenue has brought the 2023/2024 deficit forecast down to $1.1 billion, nearing a surplus.
The opposition criticised the government’s approach, urging more action to aid the Reserve Bank in maintaining consumer price growth within the 2-3% target range. Shadow treasurer Angus Taylor emphasised the importance of reducing inflation through spending adjustments rather than taxation.
Meanwhile, Anglicare Australia’s executive director, Kasy Chambers, argued for targeted cost of living relief that doesn’t contribute to inflation, unlike the upcoming stage three tax cuts. These tax reductions, set for mid-2024 implementation, are potentially increasing living costs for many.
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