Fuel tax credits at risk: NFF warning on independent wins

The National Farmers Federation warns the fuel tax credit worth $8b a year to regional Australia is at risk if independents gain the balance of power tomorrow.

The National Farmers Federation has warned that a hung parliament risks independents demanding the abolition of Australia’s fuel tax credit scheme, in return for supporting a minority Labor or Coalition government.

“Farmers’ angst is fuelled by rhetoric from some independent candidates incorrectly labelling the FTC a subsidy,” NFF president Fiona Simson said.

“This is not only simply wrong – it’s dangerous. If this notion was to get traction, it would damage Australian agriculture’s competitiveness and impose significant hardship on regional, rural and remote Australians.”

The fuel tax credit scheme allows agriculture, mining and other off-road industries to claim back what was a 44.2 cent-a-litre excise duty on fuel up until March 30, which was expected to deliver about $8 billion in rebates this financial year.

The excise is meant to fund the nation’s road network, which is why farmers and miners are able to claim the credit on fuel used in off-road vehicles, pumps and other on-site equipment.

ABC journalist and independent Zoe Daniel, who is standing for the seat of Goldstein in Melbourne, has called for an end to what she calls fossil fuel subsidies.

End the subsidies: Independent candidate for Goldstein Zoe Daniel wants to end fossil fuel subsidies, but keep the fuel tax credit for farmers.

Ms Daniel’s policy document states: “Government spent $10.3 billion subsidising fossil fuels in 2020-21.”

That $10.3b is based on a report by left-wing think tank The Australian Institute that states “the largest subsidy is the federal fuel tax credit scheme …(which) cost the Federal Government $7.8 billion in 2020-21”.

When contacted by The Weekly Times Ms Daniel said she “supported the fuel tax credit being maintained for farmers to produce food and fibre”, but gave no indication on whether she supported it being maintained for the mining, seafood and tourism industries.

Independent candidate for Kooyong Monique Ryan has also campaigned to “end taxpayer subsidies to fossil fuel industries”, but has no detailed policy on retaining the $7.8b in FTCs.

It’s all teal: NSW Warringah independent MP Zali Steggall, with her new electric campaign bus, wants to phase out fossil fuel subsidies.

In NSW independent Member for Sydney’s North Shore electorate of Warringah, Zali Steggall, has published policy documents that state she wants to fund programs to cut greenhouse gas emissions by 60 per cent by 2030 using funds recovered by “phasing out fossil fuel subsidies”.

“If Australia is to get to net zero, we will need to roll out sustainable and regenerative agriculture practices, electrified and energy-efficient equipment, fertiliser management, meat substitutes,” the documents said.

But again Ms Steggall has not declared her position on maintaining FTCs for farmers or any other sector.

However Victorian regional Indi independent Helen Haines’ office made it clear she: “supports the fuel tax scheme as it currently operates”.

In the middle: Independent Member for Indi Helen Haines backs the fuel tax credit continuing as normal.

Ms Simson said “scrapping or restricting the FTC scheme would effectively impose a levy on industries like agriculture, that are reliant on diesel fuel to generate power and operate vehicles and other machinery off-road.

“The importance of the credit was highlighted in recent research by GrainGrowers Limited, the peak body representing Australian grain farmers.

Grain Growers Limited chief executive David McKeon said 97 per cent “of growers surveyed said maintaining the FTC would be an election policy that would have the greatest positive impact on their sustainability and profitability.

“The Fuel Tax Credit Scheme is critical for regional Australia, especially for the grains sector that is so heavily reliant on diesel. We must ensure the scheme is maintained so farmers are not required to pay an excise for fuel used off-road.

“Right now, farmers across Australia are in their paddocks planting crops to put food on our supermarket shelves. They will be adding up the input costs to their business and their potential diesel bills will be weighing heavy on their minds.

“An undermining of the fuel tax credit system would damage Australian farmers’ ability to compete on the world stage and therefore their profitability and productivity.

“Throughout the pandemic farmers kept Australians in work and supported an economy on life-support.

“Despite significant recent headwinds, the sector is on a trajectory of growth, on track to meet and beat the NFF’s goal for agriculture to be a $100b industry by 2030.

“If members of parliament, no matter their colours, are serious about supporting a bright future for regional Australia and agriculture, they must declare their support for the FTC scheme before this Saturday.”

For more information on the importance of the FTC scheme to regional Australia click here.

As it stands the fuel excise is expected to raise about $20b in this year’s budget.