Media Releases | 18th Mar, 2015

Diesel fuel rebate wasted on profitable mining companies who don’t need handouts

18 March 2015

Environment Victoria has described the mining industry’s attempts to side with small farmers as needy recipients of the diesel fuel rebate as disingenuous and rent-seeking, and urges Treasurer Hockey to deliver a fair budget that cuts corporate welfare to our wealthiest companies.

Safe Climate Campaign Manager at Environment Victoria, Dr Nicholas Aberle, today said:

“The idea that mining companies like Rio Tinto and BHP Billiton need as much help paying their fuel bills as small farming businesses is ludicrous.

“The largest share of the diesel rebate goes to the mining sector, and within this sector the biggest recipients are extremely profitable multinational companies like Rio Tinto and BHP Billiton, receiving hundreds of millions of dollars every year.

In total, the mining industry receives approximately $2.5 billion each year under the Fuel Tax Credit Scheme.

“If Treasurer Hockey wants to deliver a fairer budget he needs to look at these wasteful and polluting taxpayer-funded handouts to Australia’s wealthiest companies.

In response to industry’s pre-emptive strike to retain the Fuel Tax Credit Scheme, Environment Victoria has called for a cap on how much each recipient can claim in diesel rebates, which would help better target the subsidy.

“Certainly food producers and many other smaller users rely on the diesel rebate. A simple cap on how much each company can receive in rebates each year would ensure farmers and others are unaffected by cuts to the scheme. An annual cap of $100,000 per recipient would be a fairer system and would free up billions of dollars for government expenditure on those who need it most.

“Every litre of diesel burnt under the Fuel Tax Credit Scheme releases pollution that drives climate change. While some diesel use is inevitable, responsible governments should be in the business of discouraging pollution, not subsidising it.

Dr Aberle also disputed two of the common claims made by industry.

“There are two important industry claims that need to be debunked if we’re going to have a sensible discussion about the Fuel Tax Credit Scheme. Firstly, the diesel rebate falls squarely within the World Trade Organisation’s definition of a subsidy. Secondly, the fuel excise does not fund road construction: since 1959, fuel excise has gone into general revenue.

“This is money that could be better spent on any number of health, education, welfare, or environmental initiatives. But instead it is lining the pockets of companies making billion dollar profits. Retaining the Fuel Tax Credit Scheme in its current form is not the path to a fairer budget.


For comment:

Dr Nicholas Aberle
Safe Climate Campaign Manager
Environment Victoria

Direct: (03) 9341 8112 / Mobile: 0402 512 121