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Prime Minister Anthony Albanese says tapering the fuel excise cut is a sensible measure that will provide certainty to motorists as fragile peace talks come under threat and Iran says it closed the Strait of Hormuz because of Israel’s continued attacks on Lebanon.
The prime minister said on Sunday that drivers would get 16¢ a litre off fuel for the month of July – an extra month of relief, but at half the rate of the 32¢ discount that had been applied since April. The announcement came after the United States and Iran signed a memorandum of understanding last week to end hostilities.
By Sunday, Iran had accused the US of a clear breach of commitments by failing to end Israeli attacks on Lebanon, leaving the future of the region and the flow of oil out of the strait in doubt.
Albanese will convene national cabinet on Monday to discuss the excise cut with state and territory leaders, whom he expected to do “the right thing” and agree to continue forgoing GST windfall profits to help fund the relief extension. This is expected to cost an additional $400 million.
“A step-down is a sensible thing to do,” Albanese told Sky News. “We know that families are still under pressure, and we also know that the impact of this conflict on the other side of the world will have a long economic tail to it.”
NSW Premier Chris Minns said on Sunday that he would put his hand up for the state to drop its GST component.
Albanese said the government would continue to assess the circumstances in the Middle East, and respond to future shocks appropriately.
Asked whether the nation would join the US if it removed sanctions on Iran to get a peace deal over the line, Albanese said Australia would make its own decisions.
“Bear this in mind, that Iran orchestrated attacks on Australian soil. We don’t take it lightly – we expelled the Iranian ambassador from Australia, the first time an ambassador has been expelled since the Second World War.”
Energy Minister Chris Bowen said the government would continue to ensure fuel supply to Australia while an agreement between the US and Iran hung in the balance.
“We know that the simple announcement of a peace deal is not implementation of a peace deal. We want to see the Strait of Hormuz open and open permanently and sustainably. We’re not yet there,” he said in Sydney on Sunday.
Opposition foreign affairs spokesman Ted O’Brien blamed Lebanese militant group Hezbollah for undermining the agreement with attacks on Israel.
“If you think of it from an Australian point of view, if we actually had missiles raining down on our country, the expectation would be our government acts,” he told the ABC’s Insiders program.
“We’re dealing with a terrorist organisation – we’re dealing with Hezbollah again. This is a proxy of Iran, a despotic regime that kills not only their own people but other people around the world, and this is what makes it so complicated that I don’t think we can simplify it.”
O’Brien said Labor should be credited for gradually reducing the excise cut, while Opposition Leader Angus Taylor was more circumspect, saying he hadn’t seen all the detail.
“I understand the logic of having a graduated taper of this, and as I say, we’ll look at it, but we have been supportive of cuts to the fuel excise from the start,” Taylor said. “In fact, we proposed it in the first place, and Labor copied us.”
Taylor said the relief should be offset with cuts from other parts of the budget.
Greens senator David Shoebridge said the shrinking relief would do little to help Australians who were struggling in an ongoing cost-of-living crunch, and called for the government to show greater leadership.
“One of the reasons we’re seeing this one-month measure of reimposing half the fuel excise is because the world’s in chaos. The war that Anthony Albanese [and] Pauline Hanson supported, launched by Donald Trump in the Middle East, throwing everyone’s energy prices into chaos, doesn’t seem to be ending,” he told reporters in Canberra.
“When will our government call out the chaos-makers here?”
Australian Chamber of Commerce and Industry chief executive Andrew McKellar said the decision to extend the cut to the fuel excise and the heavy-vehicle road user charge was welcome aid for freight operators and the businesses that depended on them.
“Transport costs flow through the entire economy. When those costs spike, it pushes up prices and adds to the pressure businesses are already facing from weak demand and rising operating costs,” McKellar said in a statement. “The government should remain ready to respond if conditions deteriorate.”
National Roads and Motorists’ Association spokesman Peter Khoury warned the lost revenue would have consequences for the nation’s infrastructure.
“We are absolutely delivering relief when you halve the excise, there’s no doubt about that, but then the flip side to that, of course, is we have roads that need to be maintained and upgraded,” he said at a press conference.
Brittany Busch is a federal politics reporter for The Age and Sydney Morning Herald.Connect via email.From our partners
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