The Minerals Council of Australia (MCA) is fighting for the fuel tax credit, which is considered critical to regional businesses reliant on diesel including the minerals and resources industry.
Recently, the Labor Environment Action Network launched a campaign to overhaul the mining fuel tax credits. An independent analysis of the fuel tax credit scheme shows major miners receive large sums of taxpayer money, including BHP (ASX:BHP) with around $627 million per year and Rio Tinto (ASX:RIO) with around $416 million.
The Australian Greens party says cutting this tax credit would save around $8 billion a year, which should be redirected into electrification and regional transition.
Australia’s fuel tax credits provide businesses with a tax reduction for the fuel excise included in the cost of fuel used in machinery, plant, equipment, and heavy vehicles.
The MCA says fuel taxes are meant to pay for roads. When trucks and cars use public roads, they pay fuel excise to help cover maintenance. Yet miners, farmers, fishers, tourism operators and businesses using fuel off-road do not use public roads, so should not pay a road tax.
“The fuel tax credit fixes an unfair tax by refunding the road tax for fuel that isn’t used on roads,” the MCA adds.
If fuel tax credits are cut, some of Australia’s remote communities would face financial hardship and all Australians would face higher prices, job losses, and weaker local businesses, according to the council.
The Treasury has previously stated in a submission to the G20 Energy Experts Group that “fuel tax credits are not a subsidy for fuel use, but a mechanism to remove an unfair tax on off-road fuel users”.
Write to Aaliyah Rogan at Mining.com.au
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