Coalition digs in on dual ‘tax cuts’ after action on fuel prices, tobacco



News.com.au
September 20, 2026

Angus Taylor says plans for a “fuel price shield” would see Australians get two tax cuts “for the price of one” after the Coalition also pledged to slash the tobacco excise following an explosion in the black market.

Mr Taylor announced overnight plans for a 27c per litre cut to the tax on fuel, or about half the excise, to be triggered when the two-week average for Brent crude – the international standard benchmark for fuel price – exceeds US$100 per barrel.

Currently, Brent crude is trading at a two-week average of US$103.87 per barrel, meaning the measure would come into effect immediately.

The Coalition expects the measure, once triggered, to save motorists about $15 on a typical tank on fuel.

The heavy vehicle road user charge will also be reduced from 32c per litre to zero under the plan.

Opposition Leader Angus Taylor announced overnight plans for a 27c per litre cut to the tax on fuel.

Speaking from a petrol station in Canberra on Sunday, Mr Taylor said the program would be fully funded through cuts to the tobacco excise.

Last month, the Coalition pledged to slash the excise duty by 80 per cent – five per cent more than One Nation’s proposed 75 per cent cut – amid calls from state leaders over the punitive tax which experts say has helped drive a booming black market.

‘This is two for the price of one. We cut two excises, two taxes at once,” Mr Taylor said.

Mr Taylor denied claims by Treasurer Jim Chalmers that the program was not funded.


“Its fully funded … the cut to the tobacco excise will raise $8bn of funding,” he said.

“We’ve worked through that with the Parliamentary Budget Office.”

Mr Taylor proceeded to lash Mr Chalmers, calling him a “fraud”.

“He simply has never understood economics or the economy. He doesn’t understand how to do this sort of thing,” he said.

“We can bring down taxes, fully fund it through the budget, and ensure that we provide the relief Australians want at the bowser.”

Mr Taylor said the measure would be “anti-inflationary”.

Chalmers rules out Labor excise cut

In an earlier statement, Mr Taylor said fuel was “not a luxury” and with global prices once again spiralling, “Australians should know there is a clear automatic safeguard in place to provide temporary and targeted relief”.

“Australians need it to get to work, take the kids to school and keep their businesses running,” Mr Taylor said.

The average cost of Premium 95 and Premium 98 fuel has risen by almost 65c per litre since June 30.

“The Fuel Price Shield would provide certainty. When a serious oil shock hits, the tax comes down automatically. When oil prices return to more normal levels, the ordinary rate is restored.

“It takes the day-to-day politics out of the decision and gives families and businesses greater certainty about what will happen when the next global oil shock arrives.”

Nationals leader Matt Canavan said high fuel prices affected food, freight, and supply across the country, hitting regional communities particularly hard.

“In regional Australia you cannot just decide to stop driving,” he said.

“The Fuel Price Shield is designed to provide temporary relief when international oil markets experience an exceptional shock, while ensuring the ordinary arrangements return once that shock has passed.”

Under the Coalition’s proposal, the excise would return to normal after the eight-week average for Brent crude fell back below $US100 or three months after it was triggered.

At that point, the government could decide to extend the cut.

The Coalition estimates the shield would only have been triggered twice in the past five years had it already been in place, including at the outset of Russia’s full-scale invasion of Ukraine in early 2022.

The Albanese government halved the fuel excise in March in response to prices soaring off the back of the United States’ and Israel‘s surprise attack on Iran.