THE Federal Government has backed down on its proposed changes to the Fuel Tax Credit Scheme after farming groups made an urgent call to rule them out.
Melbourne-based public policy ‘think-tank’ the Grattan Insitute has released a report stating that the $8 billion a year in fuel tax credits given to businesses should be cut in half, to help repair the budget and reduce carbon emissions.
However National Farmers Federation president Fiona Simson has warned that slashing the scheme would be “economically disastrous”, and would “light the fuse on a multi-billion dollar tax bomb” that would send a cost of living shockwave down the supply chain.
“Farmers are already battling a cost of farming crisis, with fuel, fertiliser and other inputs at historically high levels. We’re seeing this reflected in the food price inflation causing pain for families at the supermarket checkout.
“Levelling billions in new taxes on the supply chain is a recipe for further inflation,” Ms Simson said.
The Grattan Institute report saidwinding back the credits could reduce the structural budget deficit by about 10 per cent, or $4 billion a year.
It would also help Australia hit its target of net-zero emissions by 2050, because burning diesel contributes about 17 per cent of Australia’s total carbon emissions.
“There is no business reason why larger vehicles should pay less than smaller vehicles – in fact quite the reverse, since heavy vehicles do far more damage to roads,” the Institute states.
Prime Minister confirms no changes
Anthony Albanese yesterday confirmed no changes will be made to the scheme, with the decision welcomed by NFF CEO Tony Mahar.
“This is a huge relief to farmers who would otherwise have seen a significant spike in their costs. Farmers are already battling skyrocketing costs on too many fronts. It would be devastating to see government add to that by increasing our tax burden at the same time,” Mr Mahar said.
“The decision by the Prime Minister is an economically sensible call. Increasing costs on the food supply chain would do nothing but fuel the cost of living crisis for consumers. It would also defy logic by levying a road tax on off-road fuel use.
“It’s disappointing to see that there are still a number of representatives in the Federal Parliament who choose to ignore these basic facts.
“We’ll continue to reach out to politicians of all persuasions to correct misinformation regarding Fuel Tax Credits and explain the important role they play in farm business.”
- For more on the concerns raised click here
Source: NFF
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