A Coalition government would dump tax cuts in favour of a temporary cut to the fuel excise in a move it says would save families hundreds of dollars, but critics have labelled it a "sugar hit".
The proposal would , lowering the rate on petrol and diesel from about 50 cents to 25 cents per litre. Opposition leader Peter Dutton is set to formally announce the plan in his budget reply on Thursday night.
It comes after Treasurer Jim Chalmers announced when handing down the federal government's budget on Tuesday.
The plan passed the Senate on Wednesday night and will save taxpayers up to $268 on their tax bills — about $5 a week — in 2026/27 and up to $536 every year after.
The Coalition voted against the bill, and Opposition treasury spokesperson Angus Taylor confirmed on Thursday it would replace the tax cuts with its temporary fuel excise cut.
Taylor told ABC News Breakfast the move was "temporary, targeted, responsible, and it's focused on that group that we think are under the most pressure" amid the cost of living woes.
He said the plan would save a one-car family about $750 a year — or $14 a week — and a two-car family about $1,500 a year — or $28 a week.
The plan is expected to cost $6 billion a year. Asked how the Coalition would pay for it, Taylor said it would cost less than Labor's tax cuts and the Coalition would "put our costings out before the election".
Dutton told Nine's Today program the plan would start "straight away" and insisted it would not add to inflationary pressures.
Prime Minister Anthony Albanese accused Dutton of copying the former Liberal government's 2022 fuel excise cut.
"This is what Scott Morrison did in the 2022 budget but then it disappeared because it was time-limited," he told ABC radio.
"This is time-limited as well — just for one year, no ongoing cost of living help."
Greens senator Sarah Hanson-Young labelled the plan to cut the fuel excise a "sugar hit" which would "not touch the sides of the permanent cost of living relief that Australians really need".
"Cutting petrol excise for 12 months might get Peter Dutton a headline but sure as hell won't get him a budget for the long-term that helps people."
Taylor didn't rule out larger tax cuts but the Opposition has so far remained tight-lipped on tax relief or economic policy it will offer voters at the election.
The Opposition has also pledged to fast-track gas approvals and extend ageing coal-fired power plants to reduce electricity prices in the medium term, a proposal that has been criticised by environmental groups.
Speculation is increasing that Albanese will call the election as early as Friday, triggering the start of a minimum 33-day campaign that will end with voters going to the polls in May.
— With reporting by the Australian Associated Press
