History repeats as Coalition MPs demand fuel excise cut

Tuesday 30 October 2018

In 2001, just prior to the 2001 Federal Election, the Howard Government made the short-sighted decision to freeze Australia’s fuel excise at 38.14 cents a litre, abandoning the twice yearly CPI increase that had long been a feature of Australia’s excise system.

Facing an assault over the rising cost of living, John Howard’s decision was a purely political play aimed firmly at getting re-elected. However, the Budget since paid the price, with the foregone excise revenue ballooning to around $5 billion per annum – a figure that grew over time as inflation took hold:

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About the author

Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.