Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Jim Chalmers MP)General outline and financial impact
Schedule 1 - Fuel duty reduction
Outline
Schedule 1 to the Bill amends the Excise Tariff Act and the Customs Tariff Act respectively to temporarily reduce the excise duty rates and excise-equivalent customs duty rates for fuels, including petrol and diesel and similar petroleum-based products.
These changes assist in easing some of the impact of recent fuel price increases resulting from the conflict in the Middle East by providing a temporary reduction in fuel excise and customs duties.
Date of effect
Schedule 1 to the Bill has effect from 1 April 2026.
Proposal announced
The reduction in fuel duty contained in the Bill was announced by the Prime Minister on 30 March 2026.
Financial impact
Schedule 1 to the Bill is estimated to decrease the underlying cash balance by approximately $1.9 billion over the forward estimates period.
Human rights implications
Schedule 1 to the Bill does not raise any human rights issues. See Statement of Compatibility with Human Rights — Chapter 4.
Compliance cost impact
This measure is expected to have a low impact on compliance costs.
Schedule 2 – Further fuel duty reduction
Outline
Schedule 2 to the Bill amends the Excise Tariff Act and the Customs Tariff Act to provide the Treasurer with the power to determine a percentage of fuel duty rate lower than the 50 per cent that otherwise applies between 1 April 2026 and 30 June 2026. This benefits users of fuel products.
Date of effect
Schedule 2 to the Bill has effect from 1 April 2026.
Proposal announced
The reduction in fuel duty contained in the Bill was announced by the Prime Minister on 30 March 2026.
Financial impact
Schedule 2 to the Bill has no impact on underlying cash over the forward estimates period.
Human rights implications
Schedule 2 to the Bill does not raise any human rights issues. See Statement of Compatibility with Human Rights — Chapter 4.
Compliance cost impact
This measure is expected to have a low impact on compliance costs.
Schedule 3 – Amendments relating to fuel tax credits
Outline
Schedule 3 to the Bill amends the Fuel Tax Act to provide the Transport Minister with the power, on a temporary basis beginning on the day after the commencement of the Bill and ceasing on 30 June 2027, to vary the rate of the road user charge for a financial year beginning on 1 July 2025 or 1 July 2026. The Schedule removes existing restrictions on the use of the determination making power by the Transport Minister.
Date of effect
Schedule 3 to the Bill has effect from 1 April 2026.
Proposal announced
The amendments to the road user charge were announced by the Prime Minister on 30 March 2026.
Financial impact
Schedule 3 to the Bill has no impact on underlying cash over the forward estimates period.
Human rights implications
Schedule 3 to the Bill does not raise any human rights issues. See Statement of Compatibility with Human Rights — Chapter 4.
Compliance cost impact
This measure is expected to have a low impact on compliance costs.