Treasurer Jim Chalmers says today’s changes will still reduce inflation, a fortnight after inflation data ticked up and the Reserve Bank raised interest rates.
“The expected impact of what we’re announcing today is to reduce headline inflation by about half of a percentage point through the year to the June quarter of 2026 more broadly,” he said.
“Obviously, there is still a price signal in the market. Prices are higher than we would like when it comes to petrol and diesel. The global oil price has almost doubled since the beginning of the year. It was trading $116 a barrel. Last time I looked, it was about $60 at the start of the year. So all of that flows through, not just to our scenario planning and our modelling, but also, obviously, our forecast for the budget.”
Prior to the 2022 election, the Morrison government temporarily halved the fuel excise in response to price shocks related to the war in Ukraine. When it was introduced, fuel prices fell by 14 per cent in a single month.
After the excise returned to normal, petrol prices rose by 10 per cent. By this point, inflation had reached a 30-year high of 7.8 per cent.
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