Treasurer Jim Chalmers has signalled that households should not expect a return of fuel excise relief, even as petrol prices drive inflation higher and a Melbourne Cup Day interest rate rise looms.
Playing down any suggestion that the government would resume its fuel excise discount after the September inflation figures on Wednesday 28 October, Dr Chalmers said: “The budget can’t afford to do that forever.” He told reporters, according to the ABC, that “we need to make sure that when we provide cost of living relief, it’s not counterproductive.”
The fuel shock
Fuel is a key driver of the latest jump. The ABS said automotive fuel prices rose 9.4% in September alone, after a 14.8% jump in August, driven by higher world oil prices. Transport costs were up 8.7% over the year. Dr Chalmers described the Middle East war as “disastrous for Australians, for cost of living” and said it was “absolutely turbocharging” inflation.
Who is to blame
The Coalition has accused the government of a spending problem. Deputy Liberal leader Jane Hume pressed the point in Senate estimates, and Shadow Treasurer Tim Wilson called for a fuel discount funded by spending cuts.
Dr Chalmers insisted the budget was playing “a helpful role” and was not a “primary driver”. “For every five dollars of demand in our economy, four dollars [are] private and one dollar is public,” he said, pointing to the war and a burst of private investment in areas such as data centres.
Treasury Secretary Jenny Wilkinson backed that assessment in Senate estimates. “We have seen public demand coming off,” she said. “The thing that we have been surprised by has been that private demand in the economy has been stronger than we expected.”
Reserve Bank Governor Michele Bullock did not comment directly on the budget, but pointed to private activity, global pressures and productivity. “Continued weak productivity growth means that the economy cannot grow strongly without putting pressure on inflation,” she said, according to the ABC.
What it means for business
For businesses with heavy fuel bills, from freight to farming, the message from Canberra is that relief is unlikely to come from the excise. That leaves pricing, hedging and efficiency as the main levers, at the same time as borrowing costs look set to rise again.
The policy debate also has a timetable. The Reserve Bank board hands down its decision on Tuesday 3 November, along with updated forecasts. A 25 basis point rise would take the cash rate to 4.85%, the highest level since 2008, the ABC reported.
Sources: ABC News (28 October 2026); Australian Bureau of Statistics, Consumer Price Index, September 2026.