Treasurer Jim Chalmers has unveiled a suite of Covid-era support measures for businesses struggling with soaring fuel prices, as Prime Minister Anthony Albanese prepares to address the nation on Wednesday night. The measures come amid the US-Israel war on Iran, which Chalmers said is having an 'extreme impact on the global economy'.
The support package includes more generous Australian Taxation Office payment plans, removal of penalties and interest on unpaid tax debts, and support to vary PAYG payments for businesses hit by fuel supply issues. Albanese will deliver a live address at 7pm AEDT, expected to encourage Australians to help save fuel for areas that need it.
Banks have also announced specialist teams to assist customers affected by the fuel crisis. Chalmers described the steps as 'common sense' responses to extraordinary circumstances, adding that 'if everybody does their bit, we can get through this difficult period'.
Ahead of the 12 May budget, the treasurer flagged that officials are considering a wider range of economic scenarios, including a long-lasting global oil shock that could trigger a recession. He noted that Australia enters this shock from a position of 'genuine relative economic strength'.
The new package follows a three-month halving of the fuel excise tax, costing $1.5bn, and temporary removal of road user charges for heavy vehicles, costing $1.05bn. Economists warn that fuel price spikes could push inflation and unemployment towards 5%, creating a stagflationary period.
However, Westpac analysis suggests the government has fiscal firepower for more relief, with a $60bn tax windfall from higher commodity prices over five years, partly due to the Middle East conflict. Senior economist Pat Bustamante noted that this more than offsets the $2.55bn cost of fuel support.
