Chris O'Keefe, Host: Well, Senator Tim Ayres is the Assistant Minister for Trade and Manufacturing and he's Albo’s right-hand man, and he's kind enough to give us a bit of his time. Senator, G'day.

Tim Ayres, Assistant Minister for Trade and Manufacturing: G'day, mate. There's never any wondering what Chris O'Keefe thinks about an issue.

Chris O'Keefe: Well, fuel excise? Come on. It's not what I think, it's what the people of Australia think. Fuel excise, $2.20 a litre in petrol, in diesel. It's getting ridiculous.

Assistant Minister: Well, petrol prices are very high. In Sydney yesterday, the average daily price was $2.10 a litre. Still below the peak in 2022, but very high. And that means for people who are commuting from the western suburbs, in particular, for truck drivers, for people who are using their vehicles for their individual businesses, this is a significant cost. You are right.

This is driven by decisions made by the OPEC oil cartel. It's driven by the war in Ukraine. But it's putting immediate pressure now on household budgets. We get that. We understand that. That is why the government has had a relentless approach on the cost of living. We are managing the budget –

Chris O’Keefe: Relentless?

Assistant Minister: – very carefully. Managing the budget very carefully to manage inflation in the economy.

Chris O’Keefe: “Relentless” you say?

Assistant Minister: And there is a series of measures that have been taken that put meaningful downward pressure on household costs –

Chris O’Keefe: On petrol prices?

Assistant Minister: - well, petrol prices – it is not something that the government is considering at the moment –

Chris O’Keefe: Why?

Assistant Minister: – a fuel excise. Well, I'll tell you why. Number one, we are very cautious as a government, in fiscal terms, about making sure we manage the budget settings properly. That's what Australians expect us to do. Not to do what's immediately popular, but to manage the budget effectively so we keep downward pressure on inflation. That has been a consistent approach of the government. Last budget, what we saw was measures that would not put upward pressure on inflation.

Chris O'Keefe: That's fine, but Senator –

Assistant Minister: – downward pressure on –

Chris O'Keefe: Did you see last month's CPI indicator? Last month's CPI indicator, the biggest driver of inflation going up was petrol prices. If you cut the fuel excise, you put downward pressure on inflation.

Assistant Minister: Well, those figures are going to move around. I mean, I'm pleased to see, I know your listeners will be pleased to see that there has been overall downward pressure on inflation. The trajectory that – inflation growth has moderated, it's come down from its peak. That is good. It's not good enough. We are going to keep working very hard as a government to make sure that where we can put downward pressure on household costs; medicine, childcare, bulk billing, affordable housing, energy price relief, all of these issues we are working hard to put downward pressure on household costs. But I understand $2.10 a litre, albeit lower than where it was last year, is a very hard pill for households to swallow.

Chris O'Keefe: Why isn't it even just on the table? Because if you're talking $2.10, $2.20, we had truckies on the programme yesterday who were saying that it's costing them, sort of, three or four grand to fill a truck up. One tank.

Assistant Minister: These are very significant costs for people. I’m not –

Chris O'Keefe: So why isn’t the fuel – why isn't a cut to fuel excise at least as part of a discussion?

Assistant Minister: Well, because these measures have an effect on the whole budget. And I know that Australians expect a government that's acting in the national interest to have an absolutely responsible approach to budget management, and that is what this government will do. Now, those are the short-term questions. You were pointing to the speech that Albo made prior to the election where he pointed to some of the long term issues that we face. We are dependent upon foreign refining and foreign fuel capacity.

Chris O'Keefe: That's not new and that's not going to change, Senator, you know that.

Assistant Minister: Well, it absolutely should change. The steps –

Chris O'Keefe: Okay, well get the oil rigs out and get into the Bass Strait then.

Assistant Minister: Well, these are reforms in terms of the strategic fleet, in terms of the strategic reserve, but also in terms of electric vehicles. What is going to put downward pressure on petrol prices Chris?

Chris O'Keefe: How many electric trucks can you run across the Nullarbor?

Assistant Minister: Well, two points. You put downward pressure on the demand for petrol, that puts downward pressure on price for everybody. That's the first point. That is, we have been held back for a decade. Remember Peter Dutton and Michaelia Cash and Scott Morrison all said ‘electric vehicles were going to ruin the weekend. Well, in truth, Hilux will be making electric vehicles. All the major car makers moving to electric vehicles. That is how, one of the ways, that we get more control as a country over fuel costs and fuel security.

Chris O'Keefe: Diesel and petrol are not going anywhere in the medium to long term. So, what do you plan to do about it, and just in the interim when we're completely beholden to OPEC, plus we're completely beholden to what the Americans do. You've got a $22 billion surplus as a result of higher GST, thanks to inflation and resource costs and royalties. So, why wouldn't you think you go, we've got $22 billion extra. You know what, we could probably just give a little bit of that back to Australians.

Assistant Minister: Well, that's why Jim Chalmers and Katy Gallagher are approaching fiscal management very carefully. We have banked over 80 per cent of the surplus that's been delivered. That means lower borrowing costs for government. That means that downward pressure on inflation. So, all of the costs for households means downward pressure on inflation. I understand and respect that there are challenges here right now in terms of petrol, but in terms of childcare costs, in terms of medicine costs, in terms of housing costs, upward pressure on wages. For the first time we've got wages moving again.

Now, I don't want to dismiss what's going on here in terms of petrol. It is challenging, it is short term. You are right, it is caused by overseas factors. The government is acting in a very fiscally responsible way here, to manage the budget settings properly and ensure that we don’t have an inflation blowout more broadly.

Chris O'Keefe: Can I just get to the bottom of this, Senator? So, you're basically saying, “Yeah, look, we get it, but we're not doing anything about it. Petrol.”

Assistant Minister: We, the government is acting right across the board on cost-of-living issues.

Chris O'Keefe: Yeah, but I'm asking about petrol. Forget cost of living. I don't care about cost of living. I'm talking about petrol.

Assistant Minister: On fuel excise the Treasurer has been very clear. This is not on the table for us at the moment.

Chris O'Keefe: All right Senator, I appreciate you jumping on and doing your best, but, good luck.

Assistant Minister: Always happy to come on, mate. Even if we disagree, always happy to come on.

Chris O'Keefe: All right. That's Tim Ayres, Assistant Minister for Trade and Manufacturing. He's a senator in the Albanese Government.

ENDS.