BUDGET:Fuel credits remain despite protests

Trucking will still receive fuel tax credits despite protests from environmental movement

May 11, 2011

The trucking industry will still continue to receive fuel tax credits despite protests from the environmental movement over retaining the scheme.

The 2011-2012 Federal Budget has kept the credit in place, which gives trucking operators a discount of 15.54 cents per litre.

The Greens and environmental group the Australian Conservation Foundation want the scheme axed, claiming it promotes pollution.

While welcoming the Federal Government’s decision to reform the Fringe Benefits Tax concessions, ACF says it must now focus on fuel tax credits it says costs taxpayers $5 billion a year.

Opposition to the scheme has drawn scorn from the Australian Trucking Association.

"The Greens want to abolish the trucking industry’s fuel tax credits because of their wrong-headed belief that more freight would be transported by rail," ATA CEO Stuart St Clair says.

"But there isn’t a railway siding at the back of your local supermarket. The Greens’ policy would simply push up prices for everyone who buys goods delivered by truck – and that’s every single person in Australia."

The Greens will hold the balance of power in the Senate from July 1, and its leader, Bob Brown, has already hinted that the party is prepared to make minor changes to "improve" the Budget.

Brown says the Greens, whose support Labor relies on to retain power, will ensure supply.

The fuel tax credit will fall to 15.04 cents per litre from July 1, when the diesel excise rises due to increased government expenditure on the road network. The rise will coincide with a 2.4 percent increase in registration charges.

The ACF is highly critical of the fuel tax credit going to mining companies, which the group says costs taxpayers about $1.7 billion.

"Every household in Australia is contributing about $200 a year so companies like BHP Billiton and Rio Tinto don’t have to pay a single cent in tax for the diesel they use in their off-road mining operations. This subsidises pollution and must change," ACF CEO Don Henry says.

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