The Coalition has vowed to repeal Labor’s legislated tax cuts if Peter Dutton wins this year’s election, a position branded as “extraordinary” by the government after years of the opposition promising lower taxes for Australians.
Instead the Coalition says its plan to halve, for one year, the fuel excise added to petrol would be a better and more immediate measure for cost of living relief, despite concerns in the past that such measures could increase inflation.
Dutton’s fuel cut would slash the excise from 50.8c to 25.4c per litre of fuel. He claimed which it says would save some drivers up to $750 a year if they fill up a large tank once a week, but AMP chief economist Shane Oliver calculated the average yearly saving to be $455.
Anthony Albanese said the Coalition had “confirmed they stand for higher taxes for every taxpayer”.
Asked on Thursday morning whether the Coalition would repeal Labor’s tax cut “top-up” of a maximum $10 a week, the shadow treasurer, Angus Taylor, told ABC radio it “absolutely would repeal it”.
Taylor said the fuel excise plan would “replace what Labor is doing, which we think is inappropriate under the circumstances”.
“[The fuel excise cut is] a lower tax and it’s alongside other major tax initiatives we’ve already announced, like accelerated depreciation for small businesses, like making sure we don’t have taxes on unrealised capital gains and the like, or re-establishing the tax to GDP cap to make sure that over time taxes are contained for Australian families.”
Labor’s tax cuts, $5 a week from 2026 and then $10 ongoing from 2027, are now law after passing through the Senate late on Wednesday night. The crossbench backed the changes, despite the Greens saying the cuts “barely scratch the surface for people struggling to pay for food or rent”.
The Coalition voted against the changes in the Senate.
“They have voted no for tax cuts to every taxpayer. That is the combination, and it sums up the Peter Dutton approach this entire term. Say no to everything, stand in the way of progress, stand in the way of assistance for households,” the finance minister, Katy Gallagher, told the chamber.
“Shame on you. Let’s hope the whole of Australia sees how you’ve behaved tonight.”
Dutton told 2GB the Coalition would repeal the tax cuts if they won office at the coming election, expected to be called as soon as Friday.
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“Yes, we will,” he said.
“It’s about $17bn over the forward estimates and it bakes in about $7.4bn worth of spending each year for 70 cents a day in 15 months’ time, and we think the more efficient spend of that money is in relation to the announcement we’ve made this morning – reducing by 25 cents the price of petrol and diesel – but also we need to make a big investment in our country in defence.”
The Coalition’s proposal, to be outlined in Dutton’s budget reply speech on Thursday night, would see a halving of the fuel excise for 12 months, which would cost $6bn in forgone revenue.
The Labor government has criticised the plan for copying a similar policy from former Liberal treasurer Josh Frydenberg under the previous Morrison government.
That plan in 2022 was criticised or not endorsed by dozens of leading economists, according to a survey in the Conversation, including some who thought it was “among the worst possible policies”.