23 June 2015
Media Release - #2015061, 2015

Government reaches agreement on fuel excise

Joint media release
with the Hon Warren Truss
Deputy Prime Minister, and
Senator the Hon Mathias Cormann
Minister for Finance

The Government has today successfully reached agreement to re-introduce the indexation of fuel excise to inflation.

This is a significant structural reform.

The fuel excise will increase twice a year, in February and August, in line with movements of the Consumer Price Index.

The policy is currently implemented by a 12 month tariff proposal. The passage of this legislation will make the policy permanent.

For a typical household consuming 50 litres of fuel per week, the current impact is estimated at 40 cents per week.

While the impact on individual households is modest, this measure will provide a predictable and growing source of revenue, which will help the Government boost its investment in job creating and productivity enhancing road infrastructure.

The measure is expected to raise $3.6 billion over five years to the end of 2018-19, and $23 billion over the next decade. All excise increases will be dedicated to road infrastructure.

Implementing this important structural fiscal reform will contribute significantly to our efforts to build a stronger, more prosperous economy.

The Government will provide an additional $1.105 billion in funding for the Roads to Recovery Programme over the next two years.

This means local governments across Australia will receive an extra $300 million in 2015-16, on top of the already doubled $700 million they are receiving this year. In 2016-17, local governments will receive an extra $805 million in addition to the $350 million they were already scheduled to receive.

In 2017-18, the Roads to Recovery Programme will revert to its base funding of $350 million.

This major boost to local road construction and maintenance reflects the importance the Australian Government places on building the infrastructure future of Australia.