Ahead of this year’s Federal election, tonight, Treasurer Josh Frydenberg detailed the Federal Budget for 2022-23, assuming the Coalition Government is returned.
As is now common on budget night, the Government now published a website dedicated to highlighting what’s in the budget and allowing you to find out how the changes will impact you, your family and/or your business.
Included in this year’s budget contains some controversial measures, particularly a Temporary fuel excise relief which will see the Government reduce the fuel excise by 50% for 6 months. This will see excise on petrol and diesel cut from 44.2 cents per litre to 22.1 cents per litre.
Since the Russian invasion of Ukraine in February, the global price for oil and therefore fuel products have risen dramatically from just over $1 per litre to as much as $2.20 per litre. While I’m sure many motorists will appreciate the reduction of the fuel excise, this will only marginally improve the cost of refuelling ICE vehicles, while having a significant cost on Government income we are told goes to roads and road maintenance, so what happens to those roads over the next 6 months?
While nobody likes higher transport costs, this measure runs counter to the building momentum to switch to zero-emission vehicles. With some great new electric vehicles launching in Australia recently, unfortunately, we can’t secure enough of them to meet demand, as the world wakes up to what is ultimately a better motoring experience with dramatically lower running costs.
It is policies like this that indicate to the world, we’re not serious about rapidly moving to sustainable energy. This policy is likely to cost the Government around $3 Billion in missed revenue. While nobody can say how long the international uncertainty caused by the war will last, what we do know is that the election will occur within the next 6 months, so the timing does appear suspect.
A better policy would see them cover the costs of automakers who launch new electric vehicles in Australia, currently estimated at close to a million dollars. This creates a barrier to bringing EVs here and we see international markets like the UK flooded with dozens of more options.
There’s a lot more in the budget which you can review at https://budget.gov.au/2022-23