Treasurer Jim Chalmers has ruled out extending the fuel excise cut beyond its current expiry date and downplayed expectations for broad tax relief, as he prepares to deliver what he calls the most responsible budget yet.
Fuel Excise Cut Not Extended
Speaking ahead of the federal budget, Chalmers confirmed the temporary reduction in fuel excise — introduced last year to ease cost-of-living pressures — will end as planned. The cut, which reduced the excise by 22 cents per litre, is set to expire in September. Chalmers stated that extending it would be fiscally irresponsible given the government's focus on budget repair.
Tax Relief Expectations Tempered
The Treasurer also played down hopes for significant tax relief for households and businesses, warning that the budget must prioritise spending restraint and debt reduction. While acknowledging the pain of rising interest rates and inflation, he emphasised that permanent tax cuts are not on the table in the current economic climate.
Chalmers described the upcoming budget as "the most responsible in a generation," with a focus on targeted cost-of-living support rather than broad-based giveaways. He pointed to investments in renewable energy, housing, and skills training as key priorities, funded by savings from government efficiency measures and stronger-than-expected revenue.
Economic Outlook
The budget is expected to show a modest improvement in the fiscal position, thanks to higher commodity prices and a resilient labour market. However, Chalmers warned that global economic uncertainty and persistent inflation pose significant risks. He also noted that the government remains committed to delivering a surplus, but only when it does not come at the expense of vulnerable Australians.
Opposition Treasury spokesman Angus Taylor criticised the government for failing to provide meaningful tax relief, accusing Chalmers of breaking election promises. The Greens and crossbench MPs have called for more support for low-income earners and action on climate change.
The budget will be handed down on Tuesday, 9 May 2026.
