David Pocock (ACT, Independent) Share this | Hansard source

I rise to speak on the Treasury Laws Amendment (Fuel Excise Relief) Bill 2026. I acknowledge and support the intent of this bill. We are seeing fuel prices skyrocketing, and that flows through to everything—to groceries, freight and the broader cost of living that Australians have been struggling with for many years now. In that context, it's right that the government looks for ways to provide relief. But good intentions by themselves do not make good policy, and this bill and this policy have some very significant flaws. Despite these concerns, I won't be opposing this bill, in recognition of the urgent need for relief provided by cutting the fuel excise in half. But I would like to take this opportunity to put on the record some of my concerns and the concerns of experts and a number of Canberrans who have contacted my office.

First, this is far from the best way to spend a huge amount of taxpayer money. This is a measure that will cost the budget more than $2.5 billion in just three months. At a time when we are already seeing persistent deficits and growing debt, that is not a trivial decision. A cut to the fuel excise also spreads relief across everyone who uses fuel, regardless of need. That means it benefits high-income households more than those who are struggling most. Research from the e61 Institute shows that measures like this disproportionately benefit higher income earners. At its core, this is clearly a blunt instrument. When we're being told that there is no money in the budget for things like food pantries and other frontline services, it seems that blunt instruments are the wrong tools. If we are serious about helping people, we should be directing support to those who actually need it, not subsidising fuel consumption across the board.

This cut to the fuel excise makes it more likely that we will see supply crunches, and it has struck me as odd that, at a time where we desperately need fuel in the regions and fuel for farmers, we're doing something that will potentially increase demand in metropolitan areas. Obviously, there are people in metro areas that need the fuel, but, in terms of the broader approach, there are questions to be answered. I'm concerned that this increases the likelihood of interest rate rises, causing even more pain for Australians, where we just shovel our money to the banks—at a time when supply is already under pressure, the last thing we should be doing.

A professor of economics at the University of New South Wales, Richard Holden, has described this as a 'very bad idea', warning it will increase demand and worsen shortages. Economist Chris Richardson has said cutting the fuel excise 'keeps inflation higher for longer than it otherwise would have been'. And independent economist Saul Eslake put it plainly:

It might be good politics, that's for others to judge, but it's not good economics.

Shane Wright has written, with characteristic bluntness:

The Reserve Bank must be having kittens.

He goes on to say:

Bipartisan bowser populism is not going to help.

That's what this bill is—policy driven more by short-term political appeal than by long-term economic sense. You have to think that the Treasurer has had very real concerns about this sort of decision. But it's something, and anything is badly needed at this point of what is now genuinely a fuel crisis.

As I said in my second reading speech on the Export Finance and Insurance Corporation Amendment (Strategic Reserve) Bill 2026, beyond the immediate response we must confront the deeper issue: our dependence on volatile, expensive, imported fossil fuels. The transition will take time, and there are sectors, like agriculture, where liquid fuels will remain essential for a while yet, but, if we're serious about resilience, we cannot keep reaching for short-term fixes that entrench the very vulnerability we are trying to escape. Australians deserve policies that are not just well meaning but well designed, fair and economically sound, policies that take the huge challenges we face and actually turn them into opportunities in the future.