Fuel excise cut, EV subsidies, blow hole in budget
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The Albanese government seems incapable of reining in spending and restoring the integrity of the federal budget.
Over the weekend, we learned that the government is reconsidering plans to unwind the fringe benefits tax (FBT) exemption on electric vehicles (EVs), which is forecast to cost taxpayers $1.35 billion this financial year—15 times the original forecast.
The Treasury forecasts that the total cost of the FBT exemption for battery EVs will rise to $9.7 billion between 2026-27 and 2029-30 and potentially $20 billion over the coming decade, making it a significant budget drain.
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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.