Federal election 2025: Peter Dutton drives into cost-of-living battle with petrol tax cut offer

Peter Dutton has revealed a big election pitch to immediately halve the fuel excise for a year and save motorists about $14 a week, setting up a hip-pocket battle to win over voters struggling with the cost of living.

The Opposition Leader has vowed to make relief at the bowser one of his first priorities if he is successful at the May poll, one-upping Labor two days after Jim Chalmers revealed a $5-a-week tax cut in a surprise Budget announcement.

Mr Dutton, who will unveil the plan in his Budget reply speech on Thursday, said he had far more to offer voters.

“If elected, we will deliver this cost-of-living relief immediately, whereas people have to wait 15 months for Labor’s 70 cents-a-day tax tweak,” he said.

“This cost-of-living relief will make a real difference to families and small businesses — everyone from tradies to mums and dads, to older Australians and to transport-delivery workers.”

It comes amid a bitter debate over whether the tax cuts were economically responsible or even helpful to working Australians.

The Government forced fast-tracked legislation for the cuts to votes in both chambers on Wednesday — and the Coalition voted against them each time.

This politicking left Coalition MPs with high expectations Mr Dutton would produce a significant and credible economic plan to justify how the party, that says lower taxes are in its DNA, can head into an election opposing them.

The tax cuts that were the only surprise in Tuesday’s Budget cut the lowest income tax rate from 16 to 15 per cent in mid-2026 then to 14 per cent the following year. They’re worth $268 for most taxpayers in the first year — or about $5 a week.

Petrol has been one of the acute pain points, alongside groceries and insurance, in the cost-of-living battle.

The $6 billion move to temporarily halve fuel excise — from 50.8¢ to 25.4¢ — is a re-run of a measure from Josh Frydenberg’s 2022 pre-election budget, when he slashed petrol prices for six months.

Earlier, shadow treasurer Angus Taylor pointed to the Coalition’s already-announced plan to make the instant asset write-off for small businesses a permanent tax break and its opposition to Labor’s planned tax on high-balance superannuation earnings when asked whether it would better the tax cuts on offer.

“We’ve already announced important tax cuts,” he said.

Mr Dutton labelled Labor’s tax cuts a “cruel hoax” and an “election bribe”.

“This Labor Party has racked up a trillion dollars of debt, and they’re saying to Australians, ‘Be grateful. Be thankful, because 70c a day is coming your way in 15 months time’,” he said during debate on the legislation.

Anthony Albanese lambasted the Coalition for asking what the Government was doing to ease cost-of-living pressures while opposing measures like the tax cuts.

“They will have to cut health, education, services, housing, public servants — everything (to pay for nuclear power plants). The only cut this bloke doesn’t want is a cut to peoples’ taxes. That is the only cut he doesn’t like,” he said before turning to Gen Z slang.

“They are delulu (delusional) with no ‘solulu’ (solution). They are completely delusional when it comes to that.”

Treasurer Jim Chalmers said the tax cuts — the first to be initiated by Labor since the 1980s — would boost people’s incomes, support the private sector economy and give people a better start in their careers.

“Our tax cuts provide immediate relief while also boosting participation and aspiration, and (boosting) Australians’ long-term earning potential as well,” he told the National Press Club.

He described the Coalition’s decision to vote against the cuts as “the consequence of the brain snap” Mr Taylor had during Budget lock-up.

Multiple Coalition sources acknowledged to The West the political tactics put them in an unusual position, but they hoped the leadership team would produce a credible economic plan that offered proper, longer-term solutions.

They also thought the “top-up” tax cuts were so small most people would see through Labor’s “cute lines” of attack.

Moore MP Ian Goodenough — who was a Liberal until December — backed in the tax cuts, saying working Australians needed them.

“I can’t believe if a vote’s taken today, the Coalition would oppose that. It will be a very popular measure,” he said.

Government sources said they didn’t think the Coalition would be stupid enough to oppose tax cuts on the eve of an election but once it did, Labor pivoted strategy to ram the legislation through anyway.

Veteran political strategist Yaron Finkelstein, from Society Advisory, thought the whole aim of the Budget surprise was to wedge the Coalition.

“They’re hardly going to make any difference to anyone’s cost of living,” he said. “It’s almost as if these tax cuts were packaged up in Peter Dutton’s name for the next five weeks. It’s politics with a capital P.”

Dr Chalmers defended the Government’s lack of revenue measures and the budget’s continued structural deficits during his traditional post-Budget press club address.

“It’s unusual in a pre-election Budget to have billions of dollars of savings. It’s also unusual in a pre-election Budget to have proper, genuine, serious economic reform,” he said, referencing the plan to ban no-compete clauses in most workers’ contracts and having a national licensing system for electricians.

“We don’t pretend that, even with all this progress on budget repair, that the job is finished. One of the reasons we’re asking Australians respectfully for another term of government . . . is because we know that there’s more work to do.”

Economist Leonora Risse said the type of reforms the nation desperately needed had to go beyond dealing with income tax bracket creep.

“The bigger challenge of addressing the structural deficit requires something bolder, something more substantial,” she said. “It would be rare to find an economist who thinks the current tax structure is going to be adequate to handle the structural deficit.”