Economists Oppose Fuel Tax Cut: Better Long-Term Support

0:00Economists are pushing back hard against calls to cut Australia's fuel-exise tax on petrol and diesel. With shortages hitting hard and prices climbing, figures like mining billionaire Gina Reinhardt, Tasmania's premiere, and opposition leaders in new. South Wales and Victoria want the federal government to slash the tax for quick relief. The experts say it would just make things worse by boosting demand when supplies are tight. The Albany's government isn't biting, with treasurer Jim Chalmers ruling it out. Federal liberals and nationals have stayed quiet so far, avoiding the pressure. Meanwhile, higher fuel prices are already forcing some drivers to cut back, which helps stretch limited stocks without government caps on purchases. Critics point out the downsides for everyday people. A tax cut would let better off households spend more freely driving up inflation in a country already battling high rates. Low income families feel price spikes the most, but wouldn't get targeted help from a broad cut. They drive less anyway.

1:01Past efforts show the risks. Back in 2022, the previous government have the excise for six months after oil prices surged from Russia's Ukraine and Beijing. It cost nearly $1 billion a month, and mostly benefited high earners who guzzle more fuel. Instead, economists suggest redirecting that tax revenue to direct aid like boosting job-seeker payments or rental assistance for those hurting most. As the fuel crunch drags on, the debate highlights tough choices between short-term fixes and smarter long-term support. Local news, powered by AI. This is Sydney News Today.