forecast another three rate hikes by the end of this year <\/a>\u2013 which would take the cash rate to 4.85 per cent \u2013 and no cuts until 2028.<\/p>\nIn addition to his inflation concerns, Mr Oliver also believed the excise cut would threaten the country\u2019s limited supply by encouraging Aussies to buy petrol and diesel.<\/p>\n
\u201cWe should have been adopting policies to encourage less use of fuel, not more, to make sure essential use can continue for as long as possible,\u201d he said.<\/p>\n
\u201cBy cutting fuel excise and GST on fuel, we will weaken the signal from higher fuel prices to use less, and the move actually seems aimed at encouraging motorists to use more at Easter. <\/p>\n
\u201cI understand the desire to support the economy, but there are much better ways to do that, including by conserving fuel, than with a temporary sugar hit of the fuel excise cut.\u201d<\/p>\n
In the near-term at least, there would be some relief for Aussie families, with the average household saving $9 a week as a result of the cut. <\/p>\n
\u201cBut at current petrol prices, households will still be $22 a week worse off, inflation will still rise to more than 5 per cent, it won\u2019t prevent RBA hikes, won\u2019t do anything to save fuel, and will be forgotten if petrol keeps rising.\u201d <\/p>\n
\u2018They are throwing money at us\u2019<\/p>\n
\u201cWe\u2019ve seen this movie before,\u201d wrote economist and former Treasury official Chris Richardson, another critic of the fuel excise cut, on social media. <\/p>\n
\u201cIf Budget responses add more to demand (without helping supply), that may well worsen the overall pain by adding to inflation.\u201d<\/p>\n
In addition to the fuel excise cut, federal and state governments had also promised other \u201chandouts,\u201d including free public transport and above-inflation pay rises, Mr Richardson said.<\/p>\n
These would come with a \u201csting in their tail,\u201d he warned, keeping inflation higher for longer. <\/p>\n
\u201cSo they are throwing money at us. And I 100 per cent understand the politics of that, but the economics of it are poor.<\/p>\n
\u201cBack in 2022, Australia already had inflation when a war in Europe added an energy price shock.<\/p>\n
\u201cBack then, the feds and the states gave us a range of handouts. And yes, inflation ended up rumbling on longer here in Australia.\u201d<\/p>\n
The fuel excise was last cut in half in 2022 \u2013 for six months \u2013 when Russia\u2019s invasion of Ukraine resulted in an energy supply shock. <\/p>\n
Financial adviser Ben Nash from Pivot Wealth also criticised the cut, arguing that the true measure of pain for Aussies was the cash rate rather than the price of petrol. <\/p>\n
\u201cFor high-income families, the real impact is (from) inflation and interest rates, not the bowser,\u201d Mr Nash wrote on social media. <\/p>\n
\u201cA temporary cut pulls inflation down now and pushes it up later. Watch the RBA, not the fuel price.\u201d<\/p>\n
Mr Albanese\u2019s Monday announcement came days after Treasurer Jim Chalmers ruled out cutting the excise, saying it was not being considered by the government.<\/p>\n
The Coalition welcomed the move but decried it as \u201coverdue\u201d.<\/p>\n
\u201cAustralian families and small businesses will pay less for fuel because the Coalition led and the government followed,\u201d Opposition Leader Angus Taylor said in a statement.<\/p>\n","protected":false},"excerpt":{"rendered":"An economist has issued a brutal critique of the government\u2019s move to cut the fuel excise, warning it…\n","protected":false},"author":2,"featured_media":576043,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[282547,153255,2324,1724,64,63,689,25446,99,282543,14821,16168,11301,164,282553,282554,2057,98767,27313,281768,265904,282551,272752,200872,118751,277213,5626,5575,282550,282549,677,130869,282552,282545,174614,183,44706,5716,62639,1314,12540,282546,282544,282548,5525],"class_list":["post-576042","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-above-inflation-pay-rises","tag-annual-inflation-rate","tag-anthony-albanese","tag-asia","tag-au","tag-australia","tag-australia-and-new-zealand","tag-ben-nash","tag-business","tag-cameron-kushner","tag-cash-rate","tag-chris-richardson","tag-eastern-europe","tag-economy","tag-energy-price-shock","tag-energy-supply-shock","tag-europe","tag-fuel-crisis","tag-fuel-excise","tag-fuel-excise-cut","tag-fuel-price","tag-fuel-tax-call","tag-harrison-christian","tag-headline-number","tag-inflation-concerns","tag-inflation-problem","tag-interest-rates","tag-iran","tag-mortgage-interest-costs","tag-mortgage-pain","tag-oceania","tag-petrol-prices","tag-pushes-prices","tag-rate-decisions","tag-rate-hikes","tag-reserve-bank-of-australia","tag-saul-eslake","tag-shane-oliver","tag-sky-news-australia","tag-social-media","tag-southern-asia","tag-sydney-economist","tag-tax-call","tag-temporary-sugar-hit","tag-ukraine"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/576042","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=576042"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/576042\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/576043"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=576042"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=576042"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=576042"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}