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Federal Budget 2022: Fuel costs to drop in days, one-off payments to hit Australian’s accounts in weeks

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Annabel HennessyThe West Australian
Treasurer Josh Frydenberg said a family with two cars who fill up once a week could save about $30 a week or $700 over the next six months.
Camera IconTreasurer Josh Frydenberg said a family with two cars who fill up once a week could save about $30 a week or $700 over the next six months. Credit: Supplied

Drivers can expect petrol price relief within days after the Federal Budget revealed new measures to reduce costs that will kick into effect on midnight Tuesday.

Petrol tax which is known as the “fuel excise” will be slashed in half, reduced from 44.2¢-a-litre to 22.1¢ for the next six months as part of a package the Government said would ease soaring prices within the next fortnight.

Treasurer Josh Frydenberg said a family with two cars who fill up once a week could save about $30 a week or $700 over the next six months.

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The average pump price for petrol rose from $1.79 per litre in early February to $2.13 per litre in mid-March following a spike in global oil prices caused by Russia’s invasion of Ukraine.

The competition watchdog will monitor retailers to make sure they are passing savings they make onto consumers.

PETROL PRICES
Camera IconTreasurer Josh Frydenberg said a family with two cars who fill up once a week could save about $30 a week or $700 over the next six months. Credit: News Corp Australia

It will cost the Government’s bottom line about $3 billion.

Cost of living was a major focus of the Federal Budget, with a temporary tax cut of $420 announced for those earning less than $126,000.

The “cost of living tax offset” increases the existing low and middle-income tax offset, meaning individuals earning under $126,000 will now save up to $1500 when they file their tax returns from 1 July this year.

Dual income households could save up to $3000.

Anyone earning under $126,000 is eligible, except if they are not paying tax.

Nicknamed the “lamington”, the low and middle-income tax offset was introduced as a temporary tax cut in 2018 by Scott Morrison in his last Budget as Treasurer before he became Prime Minister.

Treasurer Josh Frydenberg.
Camera IconTreasurer Josh Frydenberg said a family with two cars who fill up once a week could save about $30 a week or $700 over the next six months. Credit: AAP

The offset is due to end this year, but there was speculation it would be extended in the Budget.

This has not happened, but instead the amount people will receive for their 2021-22 tax returns has been increased by $420.

Budget papers estimate more than 10 million people will benefit from the cut which will cost the Government about $4.1 billion from the money it makes from tax.

One-off $250 cost of living payments will also be given to pensioners, carers, job seekers, eligible self-funded retirees and other welfare recipients.

The $250 will be delivered as an automatic payment to about six million people within weeks.

It will cost taxpayers about $1.5 billion.

More than half of those who will benefit are pensioners.

Mr Frydenberg said “events abroad were pushing up the costs of living” and the Government had announced a “temporary, targeted and responsible” package to ease pressures.

“Higher fuel, food and shipping costs are increasing inflation and stretching household budgets,” he said.

“The Morrison Government announces a new temporary, targeted and responsible cost of living package to ease these pressures.”

Cost of living is expected to be one of the key issues of the upcoming election with both parties attempting to convince voters they will provide hip pocket relief.

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