Federal Resources Minister Madeleine King has ruled out any changes to the Diesel Fuel Tax Credit scheme.
Speaking from Washington, where she is attending the critical minerals ministerial summit, King said she was “not open to changes” to the scheme, which has been in place since 2006.
“I’ve said there is no intention to change the fuel tax credit scheme for the reasons I’ve stated, which I’m happy to go through,” King said.
She rejected claims from groups such as the Labor Environment Action Network (LEAN) that the scheme acts as a subsidy for fossil fuels or hinders the transition to cleaner energy sources.
“It’s not a subsidy for fossil fuels, no matter what some institutions might want to tell people,” King said.
“It is a scheme where companies — whether they be agricultural businesses, individual tourist operators, fisheries or miners — receive a rebate on fuel excise because they don’t use those machines on public roads that the full tax pays for.”
Reports emerged last week that LEAN had been lobbying government ministers to reform or scrap the scheme.
Industry bodies, including the Association of Mining and Exploration Companies (AMEC) and the Minerals Council of Australia (MCA), have since come out strongly against the proposal.
AMEC said any move to cut fuel tax credits would unfairly penalise miners operating in remote areas.
AMEC chief executive officer Warren Pearce said most diesel consumed by the mining industry is used on private roads and mine sites, rather than public road networks.
“Diesel excise is collected from public road users, including industry, to support the repair and maintenance of the public road network,” Pearce said.
“Industries that use diesel but not on public roads still pay the excise and then receive it back through the Diesel Fuel Tax Credit scheme.”
The MCA also warned that abolishing or reducing the scheme would have broader economic consequences.
“If fuel tax credits are scrapped, some of Australia’s most remote communities would face financial hardship, and all Australians would face higher prices, job losses and weaker local businesses,” the MCA said.
Subscribe to Australian Mining and receive the latest news on product announcements, industry developments, commodities and more.