The CEO of the Minerals Council of Australia has said that diesel is “the lifeblood of regional Australia” in response to proposed fuel tax credit changes.
In response to farmers at the National Farmer Rally in September calling to keep the tax rebate for the agricultural industry, Minerals Council CEO Tania Constable says diesel “keeps the heart of rural Australia beating” and that it shouldn’t be threatened by the removal of the tax scheme.
“Yet despite this vital role, diesel use is under attack from a cohort of crossbench MPs and senators who seem out of touch with the communities sustaining our nation’s prosperity; a group whose voters have long benefited from a strong economy supported by mining through higher wages and healthy superannuation,” Constable says.
“For 50 years in Australia, a straightforward rule has guided road funding: if you drive on public roads, you pay a fuel excise tax. If you use fuel off-road, you get a tax credit for the excise you have already paid.
MORE OWNERDRIVER TRENDING STORIES:
- NHVR CEO to step down
- Keith Reid and his Volvo Viking
- Behind the latest Penske Master Technician winners
- October truck sales enjoy mixed results
- Friday Road Update: November 8
“This fair system ensures road taxes are for road users. But this equitable system is now firmly in the sights of some teal MPs and crossbench senators who, despite irrefutable Treasury analysis and reams of expert opinion to the contrary, wrongly slander fuel tax credits as “fossil fuel subsidies”.”
Constable’s comments come after MPs Kate Chaney, Allegra Spender, Zoe Daniels and ACT senator David Pocock called for changes to the scheme.
For the minerals sector, Constable says this would have a devastating effect on regional Australia and beyond, hurting investment and rendering some projects unviable.
“For tourism, agriculture, construction and seafood, it would not only be a job killer, but would compound cost-of-living pressures,” Constable says.
“Removing tax credits would create a new tax on Australia’s most productive, job-creating industries, with costs ultimately passed to households already struggling with rising living expenses. A new tax on farmers means higher grocery prices. A new tax on construction means higher housing costs. A new tax on mining erodes Australia’s global competitiveness. The ripple effects of such a tax would be felt right down the supply chain, from the farm gate to households.
“These four crossbenchers are openly targeting the mining industry, seeking to tax the diesel it uses off-road. This stance follows a pattern of disparaging the very sector that pays the nation’s highest wages, contributes more tax than all other industries combined, and is doing the heavy lifting on emissions reduction. But while miners are the primary targets here, other industries should feel equally concerned.”
Constable warns that although certain MPs have said they won’t currently target changes to the FTC scheme for the trucking and logistics sector, that this could change in the near future.
“Regional Australia and its vibrant businesses have copped a lot in recent years. They’ve had to shoulder the burden of high energy prices, inflexible industrial relations changes, an unpredictable approvals regime and increases in operational costs,” Constable says.
“A new tax, created by stripping away fuel tax credits, would be another considerable blow. One that some businesses fear will be a knockout blow.
“First they come for the miners, then they come for the farmers and other essential industries. It’s a slippery slope.”
The National Road Transport Association (NatRoad) says fuel tax credits are critical for road freight.
“The proposed thresholds from the crossbench MPs would not impact road freight operators. NatRoad will continue to advocate for fair and reasonable road user charging,” NatRoad says.
The Australia Institute has also published a report calling for the FTC scheme to be scrapped for the mining industry and not farmers or truck drivers.
“Cutting out an exemption for farmers or truck drivers would only cost taxpayers $1.3 billion and still gather an extra $4.8 billion from the mining industry,” The Australia Institute senior economist Matt Grudnoff says.
“The rebate is a subsidy for fossil fuel use, which is driving the climate change that is impacting all of us, but farmers in particular.
“Subsidies such as the Fuel Tax Credits Scheme for the mining industry are not consistent with policy settings designed to phase out fossil fuels and limit the worst effects of climate change. They act as a disincentive for major fossil fuel users to decarbonise.
“Dropping the Fuel Tax Credits Scheme for the mining industry and keeping it for farmers and drivers is a win-win.”
Subscribe to the weekly Owner//Driver newsletter here.