Minister opens door to more money for households in budget
Households may receive additional cost-of-living relief from the federal budget due to high fuel prices, according to Infrastructure and Transport Minister Catherine King.
Amid ongoing fuel shortages and following a fragile peace deal between the US and Iran, King downplayed the possibility that May’s budget would roll back tax breaks that encourage people to lease electric vehicles, while also downplaying the short-term prospect of introducing road user charges for electric vehicle drivers.
The federal government halved the fuel tax by 26 cents and reduced the heavy vehicle road user charge to zero in an effort to reassure drivers about rising gasoline and diesel prices triggered by the U.S. and Israel’s war against Iran.
In an interview on ABC insider In the program, the minister hinted that the three-month cut to fuel consumption tax could be extended.
“I think everyone around the world is experiencing that fuel prices are rising due to supply constraint, and diesel prices in particular are much higher than anyone would like them to be,” he said.
“The tax cuts are certainly coming on July 1, but whether additional measures are needed for households and businesses… you know, these are all things we’re considering as part of the budget process.”
Last week Prime Minister Anthony Albanese traveled to Singapore and met with his counterpart Lawrence Wong to bolster supplies of petrol and diesel from Australia’s largest fuel source. Next week, he will travel to Brunei and Malaysia on a similar mission to ensure continued imports of oil, diesel and fertilizer from those two countries.
The federal government was also considering whether to roll back generous tax regulations that encouraged people to lease electric vehicles worth about $91,000; This now costs the federal budget more than $500 million a year (about 10 times the original estimate).
But King defended those regulations and repeatedly sidestepped questions about whether they could be left in place amid ongoing liquid fuel shortages.
Defending the generous tax break, he said: “It has worked, electric vehicles have become more common. We of course want to make cheaper electric vehicles more available to people, and the fuel efficiency standard has done that.”
“I will leave the announcements about the fuel tax advantage for electric vehicles. I will leave that to the discussions in the budget. But my view is that it definitely works in starting the electrification of passenger vehicles,” he said.
King added that the availability of second-hand electric vehicles has also increased significantly as people’s three-year electric vehicle leases expire and those vehicles are sold.
“As vehicles came off renewed leases and became available for sale, you saw a really big increase in the number of people who are now buying these second-hand electric vehicles, so that’s actually done well in terms of availability.”
But he poured hot water on the prospect of introducing road user charging for electric vehicles in the short term, despite his department working on the plan and Finance Minister Jim Chalmers backing its introduction.
“We’ve been working within my department on the model of what a road user charge might look like. And that’s no surprise to anyone… my department has been working on this since December,” he said.
“Obviously, we’re currently trying to encourage as much EV uptake as possible. We don’t want to discourage that in any way. So there’s a balance to be struck here with the co-benefit tax potential of charging road users, but we’re trying to get through that.”
King stated that it was “not clear whether there is a route through parliament for this” and suggested that preliminary discussions with the opposition and the Greens were not positive about the passage of the law.
It has championed a new $20 million advertising campaign titled “Every little bit helps” which will launch on television, radio, online channels and more on Monday to encourage Australians to save fuel.
The opposition defense spokesman slammed the advertising campaign on Sunday, describing it as “taxpayer-funded political propaganda”.
“We want them [the government] “Ensuring that petrol, diesel and aviation fuel come to our country and reach the service stations they apply to refuel their vehicles, and an advertising campaign will not achieve this,” he said.
“It is clear that this is not about solving the problem, but about their political interests.”
But King said the campaign was designed to provide Australians with as much information as possible during a time of fuel shortages.
“The ad campaign is actually designed to do three things: make people aware of the national fuel security plan, make people aware of the actions the government has taken to date, and also show that every little thing you can do can help,” he said.
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James Massola is the chief political commentator. He was previously national affairs editor and Southeast Asia correspondent. He won the Quill and Kennedy awards and was a Walkley finalist. Connect securely to Signal @jamesmassola.01Connect with: X or email.
